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How to calculate the ROI of test automation?

Disha Thakkar
February 25, 2021

While transitioning from manual to test automation or introducing test automation to your manual testing efforts – one common concern on the enterprise radar is justifying the value of test automation. Will investing in test automation show noticeable benefits? How much time before you can break even with the investment cost of test automation?

One common mistake that organizations make when adopting test automation is not analyzing the value or ROI of test automation for their specific needs. Whether you are a beginner or an expert at test automation, using automation for the sake of it will not realize its optimum potential.

To understand when to use manual testing and when to use test automation, download this infographic.

In this blog, I will list down the three most important parameters to consider for the ROI calculation of your test automation implementation.

  • Speed
  • Quality
  • Cost

Speed

Manual testers can work 8 hours a day and execute test cases manually. Whereas test automation tools can practically work 24 hours and execute test cases automatically. You can run a significantly large number of test cases in a short time.

The earlier you find a defect, the easier, cheaper, and quicker it is to fix it. Test automation enables instant detection and remediation leading to a tighter feedback loop. Teams can set up automation execution to run as soon as the code is ready.

So practically, you are investing less time on testing while increasing your test coverage substantially.

The key benefit of this speed is not only faster readiness of your product but also a high-quality output with fewer bugs in production.

Quality

Test automation helps you minimize defect leakages from start to finish in the product development cycle. It has been proven that product quality increases by 25% when you align test automation with the right type of testing.

To err is human. Test automation significantly reduces the risks of manual errors and oversights. It is easy to miss critical bugs during manual testing phases only to find them in the final product review at the customer end. With test automation, you can discover bugs in the early stage of development where they are easier and cheaper to fix.

Also, test automation increases test coverage as more testing can be done frequently.

Cost

Frankly, test automation looks costlier than manual testing until you achieve the breakeven. This is mainly because of 2 things –

  • Automation engineers are costlier than manual testers
  • Investment in automation tools adds up to the test automation infrastructure costs

It is important to note that the high infrastructure cost is a one-time investment, making test automation the cheaper and more viable option in the longer run.

Other factors that make test automation more cost efficient include defect leakages and the scope of test coverage. When you factor in these benefits, manual testing is certainly the more expensive choice in the long run.

The cost of test automation reduces eventually as the tool implements test execution on its own. Your investment in manual test execution and human resources reduces considerably. The savings are not only monetary but also in terms of time and effort required to release a successful product.

Why calculate ROI for test automation?

All enterprises, small, medium, and large must undertake this exercise of evaluating the ROI of test automation.

  • Before adopting automation:
    • This exercise should be done before you adopt test automation or decide to increase your investment in it. This helps you measure and understand the ROI benefits in terms of speed, quality and costs.
  • Already having test automation:
    • If an enterprise has already invested in test automation, measuring and calculating the payoffs enables them to assess whether the investment and effort is worth it.
    • Using an ROI calculator, they can optimize their existing resources and efforts in the right direction by adjusting parameters in the calculator. This will give the teams a brief understanding of how many automation engineers are needed and what tool can be used to achieve the ROI faster.

Want to try ROI calculator for test automation? Click here

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