How to calculate ROI for Test Automation

How to calculate ROI for test automation
By Leo Prada, Technical Project Manager

The simplest way to calculate ROI for your test automation project is by estimating how many manual QA hours it saves and how many resources it frees up for other testing tasks that a computer program can’t handle, like usability tests. 

In this article, I’ll tell you how to understand and analyze the ROI of test automation dynamics and explain the benefits that ROI calculation can bring you.

What ROI is in Test Automation

ROI, or Return on Investment, is a simple formula to calculate and understand whether something you decide to implement will create more economic benefits than the cost.

No matter how large or small your business is, it’s vital to evaluate ROI. Knowing the test automation ROI metrics will help you make better business decisions, and you can also adjust your investment strategy in case you see a performance that’s worse than what was planned.

Let’s take a look at some of the possible approaches to calculating ROI in a test automation framework.

Ways to calculate ROI for Test Automation

Test Automation ROI illustration

You should weigh many factors while keeping in mind that mere linear calculation alone is not always sufficient to achieve your desired results. For example, you estimate how many hours a manual tester requires to execute a regression test. Then, you let test automation engineers do the automation of the regression suite and compare the amount of time invested into the same operation in each case.

You will get a direct linear result: 1 hour of manual testing is automated in 1.5 or 2 hours.

For some test automation implementation cases, the analysis and calculation of ROI will be a bit more complex.

To calculate the ROI for manual testing that you will use as the baseline, you need to realize that the cost will go up with time. A manual tester starts piling up repetitive tasks but gains more experience with time, which leads to a price increase.

Unlike manual testing, test automation activities will require considerable up-front investments. You have to purchase the necessary software, and you will need programmers that are well-versed in the QA and testing field. Also, the process of automating test cases will be time-consuming. Also, be aware of the fact that at the beginning of the implementation process, you’ll have to pay all of the up-front costs without any immediate return.

The break-even point is when you have your automation code polished enough to start working smoothly, which saves you manual-testing-time costs. At this point, you can start thinking about the ROI of your test automation project.

Common mistakes when calculating Test Automation ROI

Businesses often make some common mistakes when calculating test automation ROI. Continue reading to discover more details about each mistake, as well as the ways to help avoid or prevent them in your future software development project.  

Focusing too much on cutting costs

The most common mistake you can make when thinking about how to calculate ROI for test automation is focusing erroneously on how to cut costs compared to manual testing alone. Instead, look at the big picture: will test automation prevent probable expensive defects from happening, which will contribute to the project’s overall success?

Gartner has estimated that the average cost of IT downtime is $5,600 per minute. Test automation can help you save thousands of dollars in the long run by reducing or eliminating downtime. Thus, pay close attention to this metric when you calculate the ROI for your software development project.

The sooner your test engineers catch a defect, the better. Automation testing will allow your team to detect and fix errors as quickly as possible, and it can help avoid production software breaking, resulting in long periods of downtime.

Not considering training time

Your manual and automation teams should know your project’s functionality inside and out first in order to test it correctly. To achieve the right comfort level on a project, plan to allocate enough training time that is needed for the QA engineers. Make sure your ROI calculations take into account the costs of finding and training people to write tests that match a particular project’s needs.

Patricio Farrell, an engineering manager at one of the key fintech players in Argentina, believes that testers will get a much better understanding of the product and demonstrate better results if they are trained properly.

He also refers to test automation as a vital tool for improving the quality of deliveries. In his view, it’s essential that a QA team should be involved right from the beginning of a project.

Having a test strategy in place will allow your automation engineers to identify the best ways to optimize the testing effort. As a result, fewer test cases will be needed to cover a large portion of a product.

Automation testers need time to evaluate the best ways to test one or more project parts. During the planning period, there might be no visible initial productivity gains, but it’s imperative to bring the overall test strategy up to its full potential.

Maximize your ROI with Automation Software

When analyzing how to calculate the ROI of a project for test automation, don’t get biased by limiting everything to merely just comparing the amount of manual to automated testing. Automated tests are not something engineers write once and run forever. They have to maintain the code hand in hand with the development and modification of features. That process is very dynamic.

There is an impact of test automation that is hard to measure empirically. Consider the morale of your manual testers once you rid them of their mundane, repetitive regression tasks.

You should also factor in the value and usability of the automation software your team is using. I recommend Zebrunner automation reporting tool. It will help your team monitor a project’s automation status and facilitate analyzing the ROI.

The best path to increased ROI of test automation is through comprehension of the testing needs. Accurately define sections of the code that is ripe for automation, plan how automation can provide the broadest coverage, keep your test case suite up-to-date, and regularly assign to your employees challenging tasks that a computer can’t do on its own.

Maximizing ROI with Automation Software


If you know the test automation ROI metrics of your project, you will understand the number of hours of manual testing you can save and the human resources you can free up for tasks where human involvement is mandatory.

To get reliable results from your calculation, you should consider several factors: the length of the training period for test automation engineers, a team’s early involvement in the project and its morale, costs of test automation tools, and capacities automation testing offers for preventing software downtime.

The size of your business doesn’t matter. By calculating the ROI of your software development project, you can enhance your decision-making, plan investments wisely, and maintain and foster a healthy work environment due to improved time and resource allocation.

Leo Prada
Leo Prada
Technical Project Manager
Leo Prada is passionate about leading distributed teams and has vast team management experience across 10 different time zones. An avid traveler, he has spent many winters in the backwoods of Maine and some in Croatia, reclaiming his inspiration to work productively.

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