The Five-Category ROI Framework
Most business cases capture Category 1 only. The full model is 2-3x larger.
CAT 01Labour Hours Recovered40-55% of ROI
(Hours before - Hours after) x Burdened FTE cost/hr x 12
Use fully loaded cost including benefits and overhead. Include standard transaction time and exception handling time separately.
Benchmarks: AP clerk $35-50/hr, Procurement $50-65/hr, IT admin $65-90/hr
CAT 02Error Cost Elimination20-30% of ROI
Volume x Error rate (before) x Cost per error x Error reduction x 12
Include rework time, supplier queries, and duplicate payment risk. Manual AP error rates are 3-5%; automation reduces to 0.2-0.5%.
Benchmarks: Invoice error $25-50, PO error $40-80, Expense report $30-60
CAT 03Cycle Time Value15-25% of ROI
Monthly spend x Discount rate x Capture improvement x 12 (AP)
Early payment discounts are real cash on the P&L. A 65% improvement on $400K/month at 1.5% equals $78K/year.
Benchmarks: AP discount 1-2% on 50-70% of spend
CAT 04Compliance Risk Reduction5-15% of ROI
Audit hours eliminated x Cost/hr x Audits/year + Breach risk x Expected cost x Reduction
Automated audit trail reduces preparation time 40-60%. Offboarding automation reduces lingering access breach risk.
Benchmarks: HIPAA violation $100K-$1.9M, Audit prep reduction 40-60%
CAT 05Revenue Impact5-20% of ROI
SLA penalty avoidance + Revenue enabled from faster processing cycle
Amazon/Walmart SLA compliance protects channel revenue. Faster quote-to-cash enables deal acceleration.
Benchmarks: Amazon LSR above 4% triggers account review
CFO Presentation Checklist
✓Cost of doing nothing: what happens if you do not automate?
✓Five-category ROI with conservative sensitivity analysis
✓Payback period in months, not years
✓3-year NPV model: benefits grow with volume, platform cost stays flat
✓Non-financial benefits: audit trail, compliance certification, employee satisfaction