Test Automation and Calculating ROI: Automated Tests’ Role in Improving the Return of Investments
Calculating ROI (Return of Investment) is important for business owners. It judges how well an investment has performed and evaluates the efficiency of the overall project.
Amongst its many purposes, QA (Quality Assurance) has to do with increasing the ROI for clients. And relying on better means of testing asserts this benefit, including many other financial gains.
In this article, we will discuss how test automation is helping business owners increase their ROI levels and our role at Q-pros to increase and satisfy our clients’ ROI.
Test Automation as a Cost-effective Tool
Limiting the dependency on manual means is a top priority for any company looking to save on project budgets. Working with automated tools not only results in more accurate findings but also cuts a substantial amount of cost compared to manual processes.
Take for example Regression testing. If you were to consider doing regression testing manually, you would have to bear in mind the large amount of data to be tested each time a change occurred internally. This results in more labor- hence more time and cost – and a higher chance of inaccuracy.
With all the benefits that automated testing carries over manual testing, manual testing is far from being completely canceled. The need for hands-on procedures is necessary. Because at the end of the day, applications will eventually be used by humans! and for that reason, testing phases adopt many manual testing methods to verify defects and ensure quality.
Calculating Automated Testing ROI
As mentioned, not only does automation testing cut time and cost, but it also guarantees better results, improving the overall quality of the product.
Manual testing will always carry the risk of missing specific defects and causing the quality to go down or simply requiring more tests and more time.
cumulated costs over time – Source: methodsandtools.com
Significant metrics to calculate automated testing ROI include:
- Measuring the quality of the product (e.g., improving MTTD (Mean Time to Detection)
- Cost analysis. cutting back on hardware and software costs by unifying the work through singular or lesser channels
- The speed of test execution. Limiting test duration and manual tests.
Software testing is constantly evolving. Automated testing tools are getting better and better at doing their job. This means that calculating ROI could hold more in its criteria than what it does now.
How to Calculate ROI (ROI Formula)
ROI is the ratio between the net income and the initial investment. The higher the ROI, the better. It means the investment has compared favorably to the costs. ROI is a great metric to evaluate the efficiency of the investment in comparison to other different several investments.
To calculate Automated testing ROI, we rely on the following formula:
ROI = Savings ÷ Investment
- Savings: The amount accumulated by replacing manual tests with automated tests.
Savings = (time to run one manual test case – time to run one automated test case) * number of tests * number of runs
- Investment: The costs piped into setting up test automation channels.
Investment = time to build framework + (time to code one automated test * number of tests) + maintenance costs
(Maintenance costs include the cost it takes to fix failed tests and false positive tests)
ROI is a solid identifier for the success of a project. By relying on automated testing, you not only increase the ROI and save on costs, but you also ensure better quality for the product.
There is more than one way to recognize the actual benefit of automated testing, one is calculating the ROI concerning the actual amount of investment and in comparison, with manual methods.