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Test Automation ROI calculation

February 26, 2016

10:01 am

Test Automation ROI calculation is difficult. There are so many unquantifiable benefits to test automation. It is almost impossible to map these benefits to direct dollar savings. However, in order to make a business decision, it is important to know the test automation ROI.

ROI is calculated by taking the benefits from the business decision and then dividing it with the cost of implementing that decision. Test Automation ROI can similarly be considered as a ratio between the benefits of testing and the cost of testing. The cost of testing is inversely correlated with the extent of automation. But this cost-saving happens over the years. In the interim, automation actually adds to the cost.

The Test Automation ROI calculation formula is:

(Saving on manual testing + Benefits from Test Automation)/ (Cost of implementing Automation)

 Saving on manual testing can be calculated by using:

  1. The volume of Test Cases– The number of manual test cases that can be moved to automation has a direct impact on time saved by automation. This also has a direct impact on test coverage.
  2. Number Releases per year – Each time a product version is released, there is a substantial manual effort in testing the product. This can be cut down by using automation.
  3. Regression cycle per year– Regression tests are the ideal candidates for automation and are vital in calculating ROI
  4. Number of browsers, devices (mobile, tablets) and configurations
  5. Cost of manual tester

Cost of Implementing Automation can be calculated from

  1. Tool cost– Not all tools are free. Some like Selenium, Protractor, etc are open source, but a tool like Test Complete, UFT add substantially to the cost of implementing automation.
  2. The initial setup cost includes time spent on developing the automation frameworks, reusable components, and batch scripts.
  3. Cost of Automation Tester

Benefits from Test Automation are the most unquantifiable. In order to calculate them the following should be kept in mind:

  1. To really understand the benefits of test automation, we need to see how and where all the automated tests can be utilized. It could be part of the verification process used by developers to ensure they have not introduced regression issues; integrated with the build tool as a post-build job to trigger the automation test runs on every build; besides obviously being used by the QA team as part of their testing for every release.
  2. Understanding the focus of automation with respect to maximizing test coverage, reduction in testing cycle time, reaching the market faster, etc
  3. The strategic direction of the organization

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