Calculating Return On Investment for any Test Automation
Return On Investment is a performance metric used to measure the efficiency as well as profitability of an investment or compare the efficiency of a number of different investments. In this blog, let us see one of the approaches on how we calculate Return on Investment for any test automation developed and how much it will benefit the project using values such as avg. number of tests per run, number of times tests run, avg. manual test time(per test), avg. automated test time(per test), Initial time to build test framework, avg. time to script automated test, % of tests requiring maintenance and avg. maintenance time per failed test.
The formula for calculating Return on Investment is
Return on Investment (ROI) = Savings / Investment
Refer below steps on how to calculate Return on Investment (ROI) for any test automation framework
Step-1: Gather the values for below data
Consider we have the following test data
Step-2: Divide this data in two parts i.e. Savings and Investment
Here, Savings would include the below data
Investment would include the below data
Step-3: Calculate Manual Execution Time
Manual Execution Time can be calculated as shown below
Manual Execution Time = Avg. number of tests per run * Number of times tests run * Avg. manual test time(per test)
= 150 * 5 * 50
= 37500 minutes
Step-4: Calculate Automation Execution Time
Automation Execution Time can be calculated as shown below
Automation Execution Time = Avg. number of tests per run * Number of times tests run * Avg. automated test time(per test)
= 150 * 50 * 1
= 7500 minutes
Step-5: Calculate Time Savings using the values of manual execution time and automation execution time derived above
Savings can be calculated as shown below
Time Savings = Manual Execution time — Automation Execution time
= 37500–7500
= 30000 minutes
Step-6: Calculate Investment
Investment can be calculated using the below formula
Investment = (Time required to build framework in weeks * 40(here 40 is no. of working days in a week(i.e. 5)* No. of hours worked each day(i.e. 8)) * 60) +
((Time taken to script automated tests(in mins)) * Avg. no of tests per run)
+ (Avg. number of tests per run * No. of times tests run * No. of tests
requiring maintenance in % * Avg.maintenance time per failed test)
= (4 * 40 * 60) + (60 * 150) + (150 * 50 * (10/100) * 15)
= 9600 + 9000 + 11250
= 29850 minutes
Step-7: Calculate Time Saved by automation using Savings Time and Investment time calculated above
Time Saved Using Automation can be calculated using the following
Time Saved = Savings Time in minutes — Investment time in minutes
= 30000–29850
= 150 minutes
Step-8: After deriving Savings and Investment values let us calculate Return on Investment
Let us calculate Return On Investment of Test Automation using the following formula
Return on Investment = Savings / Investment
= 30000 / 29850
= 1.01
This is how Return on Investment is calculated.
Image below shows the graphical view for number of automation test suite runs to break even ROI
Hence, using the above approach one can find out how much return we get on investing time in creating test automation framework as well as how much time is saved creating automation for a specific functionality. This approach would also help us to calculate the maximum efficiency of a number of different investments.