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The ROI of a business tool compares yearly gains (time saved, errors avoided, subscriptions canceled) with the total cost: development ($6,800 to $22,400 (€6,000–€20,000)excl. VAT for a focused app), hosting and maintenance. A well-targeted project should aim to pay for itself in under 18 months.
A business tool is justified by what it earns or saves, not by what it can do. To convince a finance team, you need a simple calculation, conservative assumptions and measurable indicators. Here is the method I suggest, with a worked example to replace with your own data.
The formula, plainly
Two indicators are enough in most cases:
- payback period: upfront cost ÷ net monthly gain. This is the number of months before the tool has “paid for itself”;
- 3-year ROI: (gains over 3 years − costs over 3 years) ÷ costs over 3 years.
Total cost includes development, hosting, maintenance and your team’s time during the project. The cost lines to include are detailed in the 3-year total cost of SaaS versus custom software.
The gains to count
| Type of gain | How to measure it | Level of certainty |
|---|---|---|
| Time saved | Minutes per task × number of tasks × fully loaded hourly cost | High if measured before the project |
| Duplicate data entry removed | Number of double entries per week | High |
| Errors avoided | Average cost of an error (credit note, dispute, return) × frequency | Medium |
| Subscriptions canceled | Invoices of the tools being replaced | Very high |
| Additional revenue | More orders handled, better follow-ups | Low to medium |
| Better decisions | Indicators available in real time | Hard to quantify |
I recommend building the main calculation on the first three lines and the canceled subscriptions, because they can be measured. Additional revenue and better decisions are real benefits, but they belong in the supporting arguments, not the foundation.
A worked example to adapt
An illustrative example, with made-up amounts to replace with your own. Eight people process orders and re-enter the same information in a spreadsheet, an invoicing tool and emails. A business app brings it all together.
| Assumption | Value |
|---|---|
| Time saved per person | 30 minutes a day |
| Working days per year | 210 |
| Fully loaded hourly cost | €35 |
| Yearly time savings (8 × 0.5 h × 210 × €35) | €29,400 |
| Subscriptions canceled | €2,400 a year |
| Cost of the app | $16,800 (€15,000)excl. VAT |
| Hosting and maintenance | €3,000 a year |
Net yearly gain: €29,400 + €2,400 − €3,000 = €28,800, or €2,400 a month. Payback period: €15,000 ÷ €2,400 ≈ 6 months. Over 3 years, gains reach €95,400 for €24,000 in costs, an ROI of roughly 300%.
That result looks impressive, which is exactly why it needs a stress test: cut the time savings in half. If the project is still profitable at half the expected gains, it is solid. In this example, the payback period rises to about 13 months, which is still easy to defend.
To estimate the cost of your own tool, the estimator gives you a range in one minute.
Mistakes that skew the calculation
- Estimating time saved without measuring it. Time the tasks for a week before the project. Everything else is built on that.
- Forgetting adoption. A tool the team only half uses delivers only half the gains. Change management is covered in getting your teams to adopt a new tool.
- Counting all the gains from the first month. Allow two to three months for the ramp-up.
- Ignoring recurring costs. Hosting, maintenance and new features belong in the calculation, every year.
- Adding up overlapping gains. Removing a duplicate entry and the time saved on that same task only count once.
When the numbers do not justify the project
I would rather say it before quoting: some projects do not pay off, and it is useful to know early.
- The process involves two people, a few hours a month: the gain will not cover the cost, even a small one.
- An off-the-shelf product already covers 90% of the need for a reasonable subscription: configure it instead.
- The process is about to change deeply within the year (reorganization, acquisition): wait until it settles.
- Your available budget is below $6,800 (€6,000)excl. VAT, the floor for a business app that can run in production.
In those cases, a well-structured spreadsheet or a better-configured existing tool is still the best answer. The guide turning an Excel file into an app helps you find that threshold.
Where to start
- Pick a process that costs you time every day.
- Measure the current situation for one to two weeks: time, volumes, errors.
- Put numbers on the gains using the conservative assumptions above.
- Ask for a fixed quote on a limited scope, and compare.
During the free 30-minute discovery call, I can review your calculation and tell you whether the project holds up. The full price list is on the pricing page.
Frequently asked questions
How do you value an hour of work saved?
Use the fully loaded cost of an employee (gross salary, employer contributions, share of overhead), divided by the hours actually worked in a year. Your payroll team or accountant can give you this figure for each type of role.
Is time saved a real gain if nobody is let go?
Yes, as long as you know what it will be used for: handling more orders without hiring, following up with customers better, cutting overtime. If you cannot say, count that gain cautiously.
What payback period is reasonable?
There is no universal rule. Many finance teams expect an internal tool to pay back within 12 to 24 months. Beyond 3 years, the project rests mainly on strategic benefits, which then need to be argued differently.
Should ROI be measured after go-live?
Yes, it is the only way to know whether the calculation was right. Measure the same indicators as before the project, three to six months after the production launch, so you compare like with like.