Calculating and maximizing ROI

The basic formula, no trickery

Annual ROI = (Annual gains - Annual costs) / Annual costs.

The whole thing must be calculated on the same annual basis, with no bias. If you compare 12-month costs to 6-month gains extrapolated upward, you’re cheating yourself.

Real costs (often forgotten)

Four lines to include:

1. Vendor licenses (the visible part).
2. Internal scoping time: 5 to 15 person-days in year one for the project lead, the DPO, the business champion.
3. Documentation prep: 3 to 10 person-days for audit, triage, initial cleanup.
4. User training: 2 hours per user, plus 1 hour of refresher training per quarter.

For a 50-person SMB with 20 users: count on EUR 800 to 1,200 per month in licenses plus 8 to 12 person-days in year one. In year two, only the license line stays material.

Measurable gains

Four categories, to value separately:

• Time saved on search (FTE equivalent x fully loaded hourly cost).
• Additional sales capacity (percent of time freed x revenue per sales rep).
• Support offload (requests handled without a human x cost per ticket).
• Error reduction (in accounting firms: fewer client complaints; in public sector: fewer reworked files).

The honest method: only count gains actually measured in routine use, not the ones hoped for at kickoff.

Typical ranges observed

These median ratios come from 40 deployments. They assume rigorous scoping and a well-chosen pilot. On a poorly scoped deployment, ROI can stay negative for the first year.

Four estimation mistakes to avoid

1. Counting hours saved as FTEs eliminated. Unless you actually reduce headcount cost (rare), they translate into additional capacity — useful, but not cash on the income statement.
2. Ignoring managerial attention cost. The time managers spend tracking the project is not free.
3. Annualizing peak gains. Months 2 and 3 often show exceptional gains that normalize afterward.
4. Underestimating documentation maintenance. 0.5 to 1 person-day per month minimum to keep the corpus current.

How to maximize ROI

• Choose the right pilot (a case where gains are concentrated on a small number of heavy users).
• Limit the initial scope and expand gradually, measuring at each step.
• Invest in documentation before the AI, not during. Corpus quality drives 80 percent of the result.
• Measure continuously the six KPIs (see Measuring effectiveness) so you can adjust fast.

To estimate ROI on your case, see the calculator on the pricing page.