Whitepaper · roi digital work instructions
The business case for digital work instructions: ROI method, assumptions and ranges
How the ActARion ROI calculator works: four savings formulas, the finance model behind payback, ROI and NPV, a worked example and how to defend the numbers in front of finance
The business case for digital work instructions
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Key takeaways
- Every euro in the business case traces back to one of four transparent formulas: training, quality, downtime and expert visits.
- The finance model phases adoption at 60%, 80% and 100% over three years and discounts net cash flow at 8%.
- With default inputs: €75,260 savings per year, payback in 15 months, 3-year ROI of 61% and NPV of about €53k.
- The impact level matters more than any single input: conservative assumptions do not pay back within three years with the default investment, ambitious ones in 10 months.
- Finance trusts a business case built on your own baseline data and confirmed by a measured pilot, not on vendor benchmarks.
Chapters
01 · What should a business case for digital work instructions answer?
A business case must show where savings come from, when the investment pays back and how sure you can be. That means transparent formulas, your own baseline data, a phased adoption curve and a range rather than one number.
02 · Where do the savings come from? Four formulas
Savings come from four sources: shorter training, fewer errors and less scrap, less downtime caused by procedure errors, and fewer on-site expert visits. Each has its own formula, so every euro can be traced and challenged.
03 · How are payback, 3-year ROI and NPV calculated?
Annual savings at full adoption are phased in at 60%, 80% and 100% over three years. Annual costs are deducted each year, the one-time cost at the start, and net cash flow is discounted at 8% for the NPV.
04 · What does the worked example with default values show?
With the default inputs (Other manufacturing, typical impact, investment example values), savings at full adoption are €75,260 a year. Payback comes after 15 months, 3-year ROI is 61% and NPV is about €53k.
05 · How sensitive is the result to the assumptions?
The impact level has the largest effect: with default inputs, annual savings range from €46,100 (conservative) to €99,700 (ambitious). Error rate, cost per error and cost per downtime hour are the inputs that move the result most.
06 · How do you collect reliable baseline data?
Collect two to four weeks of baseline data for the process you plan to pilot, using definitions you will reuse after go-live. Most inputs already exist in MES, CMMS, quality and HR systems; the rest can be measured with simple time studies.
07 · How do you present the business case to finance?
Present the business case as a range with transparent assumptions, a phased adoption curve and a pilot that will verify the critical inputs. Finance accepts uncertainty; it does not accept hidden assumptions.
Frequently asked questions
How is the ROI of digital work instructions calculated?
As 3-year ROI: savings over three years minus costs over three years, divided by costs over three years. Savings are phased in at 60%, 80% and 100% adoption.
What is a realistic payback period?
With the calculator's default inputs and example investment values, 15 months at typical impact and 10 months at ambitious impact. At conservative impact the default case does not pay back within 36 months. Your own data decides.
Are the investment figures in the calculator a price?
No. €29,000 per year and €25,000 one-time are adjustable example assumptions. Replace them with your actual offer.
Why is downtime limited to SOP errors?
Because digital work instructions only influence downtime caused by procedure errors or uncertainty. Counting all unplanned downtime would overstate the case.
Can we use our own discount rate?
Yes. The calculator uses 8%. In your business case, use the hurdle rate or WACC that your finance department applies.
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