Stage 3 · Cost, ROI and implementation

Automation investment: cost breakdown, ROI method and procurement checklist

By the Global B2B Group project team · Published 16 October 2026 · Editorial guidance, not engineering, legal or financial advice

Short answer: Count the full installed cost (not just the machine), base savings on your own measured labour, scrap and uptime data, test a pessimistic case, and procure against a written URS with defined FAT and SAT acceptance criteria.

Simple payback: total installed investment divided by the expected net annual saving or margin gain; it ignores the time value of money, so pair it with NPV or IRR for approval.

Cost breakdown — what to include

Cost components; shares vary widely by project and are not given here
Component	Typical content	Often missed?
Equipment	Machines, robots, conveyors, controls	Rarely
Integration & software	PLC/SCADA, MES/ERP links (ISA-95 level interfaces), safety systems	Often
Installation	Mechanical, electrical, rigging, site supervision	Sometimes
Utilities & civil	Power, compressed air, foundations, layout changes	Often
Logistics	Freight, insurance, import duties, local taxes	Often
Commissioning & ramp-up	FAT/SAT, trials, lost output during ramp-up	Often
Lifecycle	Spares, service contracts, training, software licences	Often

ROI method with transparent assumptions

Baseline: measure current labour hours, scrap rate, availability and output for at least several weeks.
Benefit: estimate change in each metric from the supplier's offer, then discount it to what you can verify at SAT.
Annual net benefit = labour saved + scrap avoided + margin on extra output − added maintenance and licence costs.
Payback = total installed cost ÷ annual net benefit; also calculate NPV at your company discount rate.
Sensitivity: rerun with lower volume and slower ramp-up. If the case only works in the best case, phase the project.

No example figures are given because results depend entirely on your data. Use the calculators linked below with your own inputs.

Procurement checklist — URS to SAT

User requirement specification (URS): product, capacity, formats, utilities, interfaces, safety and hygiene rules.
Scope boundaries and contract model: equipment-only, line integrator or turnkey.
RFQ to at least three suppliers with the same URS and a standard price breakdown.
Bid levelling: normalise currency, Incoterms, exclusions, warranty and payment terms.
Supplier due diligence: references, service presence, financial stability.
Contract: performance criteria, liquidated damages, retention, spare-parts list.
FAT at supplier site and SAT on your site against written acceptance criteria (see IEC 62381 for automation systems).
Handover: documentation, training, and a performance check after ramp-up.

Turn this into a comparable RFQ

For industrial projects from about USD 250,000, our project team prepares the requirement, contacts suppliers on your behalf and structures comparable quotations. Free for buyers; no savings or outcomes are guaranteed.

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Frequently asked questions

Should ROI use the supplier's claimed speed?: Use it as an upper bound only. Base the case on what will be written into acceptance criteria and verified at SAT.
Is OEE a good basis for automation savings?: Yes, when measured consistently — ISO 22400 defines OEE and related KPIs, which helps compare before and after.
Who should write the URS?: The buyer's operations and engineering team, optionally supported by a consultant. Suppliers can comment, but should not write it for you.