What is ROI in Test Automation Explain With an Example

What is the value of my automated test?

In the age of Agile software development, automated testing is now a must to have to become a crucial part of delivering quality software at a rapid pace.

Most business decision-makers are in agreement that testing automation is a great idea, however, they may be hesitant to allocate the appropriate resources. Uncertainty over the cost of establishing and managing a test automation framework in particular when deadlines and budgets are tight, could result in questions about the value it can bring.

For many stakeholders, a thorough description of how the increasing amount test manuals per sprint eventually put a sway on the team's ability to provide is enough to justify investing in automated testing. For others, specifically those is not part of the technology department an explanation in numbers could help to convince them to join.

In this article, I'll show you a method for you and your team to convey the benefits of automation for testing to decision-makers who are fiscally minded.

They will appreciate that even though there are ongoing and upfront costs, the benefit by replacing manual regression testing over time will be worth the investment over the long term. In this article you will know about roi test automation.

The Value of Test Automation:

A large portion of the value of testing automation is derived from running automated tests several times1.

If tests are run only for a couple of times, it might be cheaper and faster to complete all tests manually instead of spending the initial cost of buying a test automation program or creating an entire framework from scratch and writing tests.

But, when automated tests are repeatedly run against new builds, a break-even threshold is attained. From then on every subsequent run will result in an ever-growing positive ROI, and frequently more test capacity and coverage (that refers to the capability to conduct tests that previously might not have the time to do manually).

In the case below the break-even point is reached after 25 runs of test automation at the 50th test it's reached an ROI of approximately 1.75 which means that test automation has delivered 75 percent more value than what was invested in it.

Efficiency ROI calculation:

It is important to consider the ROI calculation for automated testing must be calculated in terms of days as automated tests are able to continuous for 24 hours instead of the 8 hours which is the standard as manual testing. But, 18 hours seem more sensible since there are times when tests are interrupted and are not running for the full 24 hours.

The formula that forms the foundation of ROI calculation is :

(a) Test script development times for automation is (Hourly automated time for test * number of test cases that are automated) (8

(b) Time for execution of test scripts that are automated (b) Automated test script execution time = (Automated testing time * of automated test cases*Period ROI) 18

(c)Automated Test Analysis Time (c)Automated test analysis time = (Test Analyse time * ROI Period) * 8

(d) Automated maintenance for test period is (Maintenance time * ROI period) 8

(e) Manuel Execution Times (e) Manual Execution Time = (Manual Test execution time * number of manual test cases * Time of ROI) 8

Notes: The duration in ROI is the amount of weeks during the ROI to be determined. Divided by 8 can be done whenever manual effort is required. Divided by 18 is performed whenever automation is used.

In this approach, time investments are considered more than financial gains. After the gains and costs of investment have been calculated, we are able to add the value for these factors into the equation to determine the total efficiency ROI.

When using the Efficiency ROI calculation method used in testing automation, the emphasis is on the effectiveness of the system and not just on the cost factor. This method doesn't require any sensitive information like how much time a tester works or the rate of pay for the tester. But, this method is based on some assumptions like automated test cases completely replacing manual test scenarios (but in actuality, some automated test cases might require the intervention of a human) and that manual testing only counts one tester who is manual.

Risk Reduction ROI:

With the risk reduction ROI calculations process to automate testing, automated benefits are calculated independently so that ROI issues are addressed which were not addressed in the previous method. If automated testing is implemented the resources will be released to perform more productive tasks like the time-consuming analysis of applications testing, exclusive negative and random testing, design and development of tests as well as other tasks.

When automated testing is used greater coverage is achieved. But, if manual testing is the sole source of it, it can result in not being able to identify bugs in the application and bugs that are fixed after delivery. As a result, the quality of the testing process and product can be reduced, placing the company at risk of having to pay the cost or incur a loss. This loss needs to be considered in the ROI formula for test automation so as to calculate the gain in terms of money if a bug is discovered post-delivery/implementation.

So, the investment cost stays the same, however gains are derived from the financial loss the business could confront if automation tests are not put into place. The results will be included in the same formula that will provide the ROI. The benefit of using ROI calculations for automated testing is that the issues in the method above are addressed, and it is able to deal with the positive effects of coverage. There is however a certain inherent ambiguity in this method, and a significant amount of risk analysis is needed along with the difficulty of calculating losses from not performing tests with automation.

Conclusion:

There are a variety of aspects that impact the test's ROI calculation automation, it is recommended to improve the overall automation testing process by creating efficient tools for automation of testing as well as spending more time on the initial stage and utilizing better reporting methods and so on.

There is also no one exact method to calculate ROI for automated testing. It is up to the tester's/management's discretion to use the method that suits their needs and situation the best.