You should weigh many factors keeping in mind that linear calculation is not enough.
For example, you estimate how many hours a manual tester needs 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.
Calculating the ROI for manual testing that you will use as the baseline, you need to realize that the costs will go up with time. A manual tester starts piling repetitive tasks but gains more experience with time, which leads to a price increase.
Unlike manual testing, test automation activities will require considerable investments from the start. You have to purchase the software and programmers well-versed in the QA and testing field
. Besides, automating test cases will consume time. Be ready for a time period when you will have to pay 100% costs and receive no immediate return.
The breaking point is the moment of having your automation code polished enough to start working smoothly, saving you manual testing time. At that moment, you can start thinking about the ROI of your test automation project.