What a manual process really costs: a worksheet

A process that runs on spreadsheets and email looks free, because nobody sends you an invoice for it. It isn't free. You pay for it in staff hours, in mistakes, and in work that slips. This post is a worksheet: you fill in your own numbers, and at the end you have a yearly figure to compare with what software would cost. We don't fill in numbers for you, because only you know them.

Step 1: list everyone who touches the process

Write down every person who enters, copies, checks, chases or reports on the data. Include the manager who rebuilds the Monday report and the person who answers "where is my booking?" emails. People forget the chasing and checking, and that is often the biggest part.

Step 2: hours per week, per person

For each person, estimate the hours a week they spend on the process. Better still, ask them to note it for one normal week. Count the time spent retyping the same data, looking for the latest version of a file, and answering questions the system could answer itself.

Step 3: what an hour costs

For each person, take their yearly salary plus the costs on top of it (bonus, insurance, pension, office), and divide by the hours they work in a year. Your finance team will have this figure, or something close.

Step 4: turn it into a year

Multiply the weekly cost by the number of working weeks in your year. That is what the process costs in time alone.

Step 5: add the mistakes

Think back over the last few months. How often did a wrong number, a missed message or an old version of a file cause a problem? For each kind of mistake, estimate how often it happens in a year and what it costs each time: the hours to fix it, a refund or discount, a missed job, an unhappy client. Add those up.

Step 6: add what you can't do

Some costs don't show up as hours. Work you turn down because the team is full. A new location you put off because the process wouldn't survive it. A key person who is the only one who understands the spreadsheet. You may not be able to put a number on these, but write them down next to the total. They are often the real reason to change.

Step 7: compare it with software

You now have a yearly cost for the current process. Set it against what replacing it would cost. With us, that is:

• A Discovery Sprint of 2 to 4 weeks, credited in full to the build or team if you go ahead.
• A fixed-price build, or a Dedicated Team.
• Running it afterwards: a Support plan, or a Managed App instead of a build.

The figures for each are on our pricing page.

Software won't remove every hour in your total. People still do the work; they stop retyping, chasing and checking. A fair test is to ask which of the hours in your table are spent moving data around rather than doing the job itself. Those are the hours software takes away.

If the yearly figure is bigger than you expected, our post on replacing spreadsheets and email covers what to do next, and how much custom business software costs sets out the build side. Bring your worksheet to a call and we will go through it with you.