What sits behind “amortised in five months”

The number usually sits on slide seven: “amortised in five to ten months”. It is set large, it is rounded, and it almost never comes from your company. It is nevertheless often the only figure that stays with anyone after a presentation — and the only one that later makes it into the request to the management board.

Such figures are rarely invented. They are simply calculated for a different company than yours. To know what is left of one for your own operation, you have to keep three things apart: where the number comes from, what it counts, and what it leaves out.

Where such numbers come from

The most common origin is a study the vendor commissioned itself. How it is built is disclosed rather than hidden: an analyst house interviews a handful of customers and forms a composite model company from them, on which the calculation is demonstrated (Forrester 2022). That model company does not exist. It is an average of businesses you do not know, with wages, volumes and pre-systems you do not have.

The second origin is surveys in which companies report their own results. That is legitimate too, but it carries a known lean: whoever stopped a project after four months rarely fills in the questionnaire about it. What remains are the cases that worked — and an average that looks better than the reality it came from.

What they count

The arithmetic behind them is almost always the same: hours saved times an hourly cost, sometimes topped up with fewer errors or an earlier close. That is clean arithmetic. It hangs on just two assumptions, which are rarely printed next to the result — which hourly rate was used, and whether the saved hours are actually freed up.

The second point is the more important one. Saved hours are not automatically saved costs. If accounting gains two hours a week, no invoice gets smaller — two hours appear and flow into other work. That is a real gain: it is called capacity, not saving, and it often counts for more. It is simply written up differently. Anyone who puts it into a request as a franc amount will get questions at the latest next year, when nobody has left the payroll.

What they leave out

The figure in the offer generally sets the build against the saving. What comes up alongside it in your own house rarely appears:

• Your own build time. Somebody has to explain the workflow, supply examples, check results and approve them. Those hours come out of the very department that is meant to be relieved — and they come first.
• The exceptions. A workflow is seldom a hundred per cent rule-based. Whatever is left over stays manual, and in the vendor's calculation it is often set to zero.
• The month something changes. A new chart of accounts, an altered tax rate, a bank switching its export format: each of those changes costs an adjustment.
• Running it afterwards. With a subscription the fee continues for as long as you use the system. With a system you own it stops — adjustments when things change are still due. Both are defensible, but they are two different calculations.
• The ramp-up. The figure in the offer usually assumes full effect from the first month. In practice the new workflow runs alongside the old one for a while, until everyone trusts it.

That projects turn out more expensive than planned is not, in any case, a suspicion. An analysis of 1,471 IT projects found an average cost overrun of 27 per cent — and, more importantly, that one project in six ran far off the rails: on average 200 per cent over budget and almost 70 per cent over schedule (Flyvbjerg and Budzier 2013). Those were large projects, not the automation of one reconciliation. The lesson still carries over, and it is not “budget for the average” but: keep the scope small enough that an outlier cannot knock you over.

«Saved hours are not yet saved money. What happens to them afterwards decides that.»

A calculation that holds up

You can get a defensible number in an afternoon, and you need no vendor for it. Five steps are enough:

• One process, not a department. Cost out a specific workflow — the monthly reconciliation, preparing the report, the filing. “The finance department” cannot be amortised.
• Measure the volumes, do not estimate them. Write down for one week how often the workflow runs and how long it takes. Estimated durations are almost always too low, because the searching, the chasing and the correcting do not stay in anyone's memory.
• Use your own hourly cost. Not the gross wage but the loaded cost: wage plus employer contributions, divided by the hours actually worked. At the Swiss median wage of CHF 7,024 gross a month (BFS 2025), an internal hour lands roughly between 50 and 60 francs, and higher in specialist finance roles.
• Deduct what remains. After automation, checking, approving and the exceptions are still there. Take those hours off before you multiply by the hourly cost.
• Count a full year. Build plus ramp-up plus running costs across twelve months — not just the price on the first page of the offer.

An example, with figures you should replace with your own. A reconciliation costs eight hours a month today. After automation two are left, for checking and approving. Six saved hours at 70 francs come to 420 francs a month. If the build costs, say, CHF 20,000, payback takes around four years. That is not a good deal.

If the same reconciliation runs weekly rather than monthly, it is around twelve months. Nothing changed in the technology, and nothing in the effort of building it — only the frequency. That is exactly why frequency decides the benefit, and not the question of which workflow annoys people most.

What does not belong in the calculation

Part of the benefit cannot honestly be put into francs, and trying harms the calculation more than it helps: that an analysis is ready on the second working day rather than the twelfth. That an overlooked error does not run all the way to the audit. That the workflow no longer hangs on a single person, who is also away for two weeks now and then.

Those are real reasons, and they belong in the request — as sentences, not as amounts. A calculation in which every soft benefit has been converted into a figure is not more convincing, only harder to check. And it will be checked.

The question to ask the supplier

Do not ask for the number, ask for the calculation behind it: which hours are counted, and at what rate? What stays manual after the rollout? What does the second year cost? Who adjusts things when the workflow changes, and at what price? Anyone who answers those four cleanly did the calculation themselves. Anyone who points at the brochure took it over from somebody else.

We work that figure out with you in the intro call — with your volumes, your hours and your hourly cost. Sometimes a short payback comes out at the end. Sometimes what comes out is that the workflow does not pay and a good checklist is cheaper. Both are usable results, and only the second one costs you nothing.