Calculating Return On Investment for any Test Automation

Kritika Vohra
4 min readOct 10, 2023

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.

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