Guide
AI ROI: capacity value is not cash savings
AI ROI is honest only when capacity and cash are kept separate. Capacity value is the hours an AI-assisted process returns multiplied by what those hours cost. It becomes cash only when you reassign the time, avoid a hire or grow without adding people. Revenue effects belong in a separate, clearly labelled scenario.
Updated
The three numbers to keep apart
- Capacity value: hours returned × loaded hourly cost. Real, but not cash.
- Cash effect: spend that actually stops (overtime, contractors, an avoided hire), minus tool and running costs.
- Revenue scenario: a conditional estimate, e.g. faster lead response × your conversion rate × customer value. It is a what-if, not a forecast.
Use ranges and ceilings, not point estimates
Only part of a task is usually addressable. State the addressable share as a range and treat the top of the range as a ceiling. Subtract review time: if every output needs checking, the net gain can be small or even negative.
Illustrative example · not a benchmark
Invoice processing, worked through
| Current load | 312 hrs/yr at your rates ≈ $17K capacity |
|---|---|
| Addressable share | 35–55% |
| Capacity returned | ≈ 110–170 hrs/yr |
| Cash effect | Only if the time is redeployed or spend avoided |
Illustrative arithmetic on example inputs. Not a benchmark or guarantee.
When AI is not worth it
- When net hours after review are near zero or negative.
- When the business case depends on blending capacity and revenue into one figure.
- When running costs exceed the realistic cash effect and capacity isn't needed.
Compare your own opportunities
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Questions
- How do you calculate AI ROI for a workflow?
- Multiply weekly hours by people and weeks to get annual hours. Apply an addressable-share range, subtract review time, and value the result at the loaded hourly cost. Report that as capacity, and model cash separately.
- Why doesn't WhereAI show one ROI number?
- One number hides whether the value is time, cash or a revenue scenario. Showing them separately keeps the decision honest.