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Salesforce Testing
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Calculating ROI for test automation is not a simple task. Investing in automation can be expensive, and success depends on many factors that are highly related to your specific business and QA requirements.
Everyone agrees that test automation brings proven benefits. Test automation can help to:
So if the benefits are clear, what's the issue? Challenges can arise when you submit a budget request for test automation software or service as the budget owner will consider every cost, including yours, based on how much money it will make or save the company.
Calculating ROI for your test automation strategy is fundamental to figuring out if this transition is worth the change and to comparing the suitable solution providers on the market. Before executing, or even thinking of building out an automation strategy, the very first thing you have to do is to calculate the net gain you’ll see from transitioning.
Copado (formerly Qualibrate) has helped QA organizations implement automated software testing for over ten years. This decade has shown that test automation can provide a relevant return on investment (ROI), as well as how to quantify the ROI to help present an effective business case for automation.
This article will guide you through the calculation of this figure to, eventually, provide an accurate result for your own business. You’ll gain an understanding of what ROI is, common mistakes QA managers fall into when calculating ROI, and the factors you need to take into consideration when calculating your ROI.
Return on Investment (ROI) is a measure of profitability that evaluates the performance of an initiative by dividing net benefits by net investment. Test automation ROI formula
As ROI is measured as a percentage, it can be easily compared with returns from other investments, allowing you to measure a variety of types of investments against one another.
The Copado ROI calculator makes it easy to calculate ROI. All you need to do is fill in the form with your own input and you will receive a full report with:
If you want to understand how this calculator was created, keep reading to learn every single factor to take into consideration and how it affects the final result.
Before analyzing the components of cost and investments, let’s look at the common mistakes people make when calculating ROI:
Let’s see, in practice, how to calculate the savings:
Regression testing is fundamental for the success of your QA activity, as it will help you ensure that your application is bug-free and that previously validated product features continue to work properly.
Over time, the number of test cases to run will grow and take longer to execute. By implementing test automation, you will save time spent testing. With Copado, releases take hours instead of weeks, as you can see here in this business case.
To come up with how much you save, you need to consider the following key variables unique to your organization before getting started:
All you have to do is apply the formula to the current scenario, the cost for manual testing, and take off the cost for test automation.
The time to create and maintain an automated test case highly depends on your business process and on the tool you are using. If you want to create a proper test case, which requires low maintenance, it will usually take the same time as creating it manually. What you’ll save is maintenance time, which will be pretty low, and the entire time for execution, as the test will run automatically.
Don’t forget to take into consideration that not all your business processes will be automated. Make sure you only apply test automation to the percentage of desired coverage.
Don’t forget that you can benefit from implementing test automation tools in other, often underestimated, time-consuming activities. That’s the case with Copado: while recording your business processes, user actions and input data in the cloud, you can use the stored information to create business process documentation and end-user training.
To calculate how much you save you will need to know the:
You can apply the same formula used for testing. For documentation and training, you will only need to consider the time to create and the time to maintain.
The biggest ROI of automated testing is the reduction of risk and remediation costs.
With test automation, you will be able to hit a test coverage close to 100% and lower the risk of introducing a defect in the production environment. You will be able to find hidden defects earlier in the life cycle that you otherwise would have only found in production, causing business disruption.
Business disruption means a loss. This loss needs to be considered in the ROI formula for test automation: we will calculate the gain in terms of money if a bug is discovered post-delivery/implementation. So, in this case, the gain is the loss the company could face if automation testing was not implemented.
As you can imagine this is a figure that highly depends on your own business. Think of Amazon, or Booking: what would happen if their systems were not working, even for a few minutes, and people from all over the world were not able to buy anything on these two platforms? And how about banks, financial institutions, cryptocurrency trading platforms, or ad networks? Introducing bugs into production would mean a big loss of money and, most of all, credibility and trust.
Reaching a test coverage of nearly 100% with test automation means that you significantly lower the risk that this happens. How do we calculate this “loss” gain then? These are the questions you have to reply to first:
The license cost is the most impactful investment. The vendors have different subscription plans. Make sure you don’t submit a long-life subscription. There is an increasing number of automated testing tools available on the market today, and choosing the one that is right for you can be difficult: check this guide we created to help you choose.
When comparing the tools, make sure you are also aware of the time required for installation. There are some well-known solutions on the market requiring huge downloads and frequent updates.
Another important factor to be considered as an investment is the learning curve. How long does it take for your team to get familiar with the tool? How long will it take your team to fully ramp up and be comfortable executing tests with the product? Is it an easy-to-use tool for everyone, or will some team members need additional training?
Some automated testing tools rely heavily on scripting tests. Copado is not a complex solution. All you have to do is to log in with your credentials to be able to automate a business process in minutes with Copado’s friendly, no-code UI. Using Copado, a customer in New Zealand was able to execute their first end-to-end regression cycle only after 3 weeks of starting from scratch.
To summarize, let’s see the initial formula again.
Where:
It’s crucial to calculate ROI for your test automation strategy. If you are not sure about the result you came up with, you can still double-check it by filling out our calculator or contacting us. We will be more than happy to help you and share with you our expertise.
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