Learn how QA Automation ROI is calculated


Are you curious as to how businesses calculate ROI for automation testing? Since test automation is expensive, the decision of whether to invest in automated testing tools or continue with manual testing can be challenging to make. Let’s break it down for you and simplify the various ROI calculation formulas on test automation and help you make an educated decision.

QA automation ROI

Usually, the primary type of calculation is a simple ROI calculation, but in this blog, we will delve into advanced calculation techniques.

Efficiency ROI calculationIt needs to be done in terms of days since automated tests can be run continuously as compared to the 8 hours calculated for manual testing. We calculate this with an average of 18 hours as test cases are usually interrupted and do not always run for 24 hours. The formula, then for efficiency ROI calculation on test automation is:

Key: Automated Test = AT, Execution Time = ET, Maintenance Time = MT, Manual Test = MaT, Period = P

AT script development time = (Hourly automation time per test * Number of AT cases)/8

AT script ET = (AT ET per test * Number of AT cases*P of ROI)/18

AT analysis time = (Test analysis time * P of ROI)/8

AT MT = (MT * P of ROI)/8

MaT ET = (MaT ET * No. of MaT cases * P of ROI)/8

Notes: The period of ROI = number of weeks for which ROI needs to be calculated. Divided by 8 for manual automation and divided by 18 for system automation.

To calculate efficiency ROI, rather than monetary factor, we consider time investment profits. We input the values of the respective variables in the formula and arrive at the answer. Although you are not required to disclose the cost to the company for hiring a tester or other such sensitive information, this method makes plenty of assumptions instead. Even though you automate test cases, you may still need manual intervention at times.

Risk Reduction ROIIn this ROI calculation method, automation benefits are calculated separately while addressing concerns that arose from the approach mentioned above. When you adopt automated testing, resources become more available to do other productive tasks like in-depth time analysis, independent negative/random testing, design/development of the tests, etc. It increases coverage, and you can discover bugs in your application and fix post-delivery errors. If any bugs are overlooked, then the consequent loss needs to be factored into this ROI formula. Any gain in terms of money, if errors post-delivery or implementation are found and fixed, will directly impact the calculation. Values are inserted in the same formulas, and then you can calculate the ROI. Even though the investment cost is similar, the biggest gain is the monetary loss that the company would save itself from if automation testing is implemented. The advantage here is that it deals with the positive effect of test coverage, a high level of risk analysis because this method is subjective.

Several factors affect ROI calculation for automation testing, so you should be advised by a reputable ​automation testing services company​. Add efficient testing automation tools, invest more time in the initial phase, and use better reporting mechanisms to introduce improvements to your automation testing. There is no singular method to calculate ROI for automation testing, so it is best to hire a t​est automation services company​ like Codoid. A consolidated decision between your testers and management will lead to the best automation testing method installed in your business that is sure to bring forth profits and help you achieve your goals quicker.


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