Most managers seem to believe that if you automate every manual test, then you reach "Zero Defects." Many failed projects are due to "biting off more than you can chew." Automation projects should be designed in phases.
Phase I: Proof of product and application under test (AUT). Can you automate it? Complete Phase I first and make sure you are ready to continue down the automation path before continuing.
Phase II: Automate deeper using a AUT functional or component approach. Use a subset of tests and when they are running correctly, build on this as a foundation.
Phase III and more: Continue automating deeper, making sure the previous phase deliverables still function. Then spread the word -- show the results and reap the benefits.