What do you think about automated testing ROI?

Automated tests have many advantages.

ROI, or return on investment, is a ratio used to calculate the efficiency of an investment. In our case, we are talking about test automation. Currently, competition is getting more demanding and more challenging. To stay in the race, many companies are working to do as much as possible with less time and cost. You can achieve this goal by automating test scenarios. Even though automating tests initially incur higher prices, these will decrease as the process progresses.

Manual vs. automated test expenses per development cycle.

So your company is about to embark on a new project? You are thinking about implementing automation, and you may wonder if implementing automation will help your project in the long run. This article will show you how to calculate ROI before implementing test automation. We will go over the need to calculate ROI, the process, and some advanced techniques and best practices for these calculations.

Why do we need an ROI calculation?

So why do so many companies rely on automated testing? First of all, automation increases test coverage, and you can run many test cases quickly. It also reduces costs in the long run, minimizes the risk of errors, and identifies bugs earlier.

Just consider automating your test cases if they are repetitive tasks. Typically, automated testing is five times faster (maybe more, depending on the test scenario) and more efficient than manual testing. For example, you automate the development cycle test cases; later, it would take little time and effort to test them again in the next cycle.

Automated testing is a one-time investment, and once you configure the process correctly, it will pay off for your business in the long run. And what's the best way to measure whether your business or project needs automation testing? The answer is simple. Calculate ROI.

Phases of the testing process with a significant influence on ROI

The three pink stages of the test process (see image below), test case development, execution, and test case maintenance, significantly impact return on investment (ROI) when automating testing.

Test stages with high/low impact on ROI

• Test planning: Includes planning the tests and providing the test environment, which is identical to manual and automated tests.
• Test case specification: For manual and automated tests, you need the analysis and description of the test cases.
• Development: For manual tests, you must create instructions for the testers to maintain consistency elaborately. Implementing the test cases with the tool requires time, money, and resources; therefore, the initial investment must be amortized over the test cycles.
• Documentation: The test plan correlates with the test instructions in manual testing. Automated documentation can be quickly created from the test cases.
• Test case management: In the manual or automated test strategy, the documents for each case must be managed.
• Test execution: Test execution is the significant cost driver here, namely hardware and personnel cause it. Careless errors are also possible. The test tool is very reliable in test execution. It makes optimal use of the hardware.
• Management of results: Manually, the results must be entered by hand. The advantage is the automatic report generation, which affects the report's quality.
• Test case maintenance: In manual testing, one would adjust the test instructions only after fundamental changes. Of course, the test cases must be adjusted in the GUI, and this causes maintenance effort. However, the advantage of a test tool is that you only have to change them once in the GUI. In addition, modularization and sound recognition of the components are possible.

Metrics required when calculating ROI for automated testing

ROI is a powerful way to test the effectiveness of test automation. It also helps in evaluating the overall quality of the product. When calculating ROI, focus on more than just cost. Keep an eye on other parameters as well. These parameters include late releases, lack of quality, unnoticed errors, etc.

Some of the essential metrics when calculating the automated tests' ROI are the following:

• The speed of test execution. For example, the test duration and the percentage of automated and manual tests.
• Measurement of the quality of the product. For example, identifying unnoticed defects, mean time to detection of defects (MTTD), and overall build quality.
• Cost analysis. For example, the software and hardware costs and the cost of defects are ranked by severity, as well as the cost of ownership.
• Resource analysis. Such as the need for new resources, the cost of training, billing, etc.

So now that we have learned about metrics, let us discuss the most critical topic — calculating ROI.

How to Calculate Automated Testing ROI

Although the process sounds complicated, in reality, it's straightforward. Calculating ROI is dividing the net gain from the transition by the total investment required. The resources, tools used, and framework setup cost fall under the investment category. Calculate ROI using the following equation:

ROI for testing automation = (Investment value — Investment cost) / investment cost

Now, let's discuss the parameters required while executing this calculation.

Automate the latest tests

To automate new tests, you need to estimate the cost and time required to develop, run, and maintain the test. In this step, you should also decide which tests to automate and which to run manually. Also, consider the hourly rate for each team member involved in the execution, and this will help you determine the total cost of automating the new test cases.

Automation of older tests

Regression testing ensures that new changes to the software do not cause new bugs in the existing modules. Therefore, it is necessary to calculate the cost of automating the old test cases. To do this, follow the procedure we discussed in the previous section.

Dealing with all environments

Make sure that the developed product works in different environments. If the end user can use your product only on a particular platform, the chance of the product's success is lower. When calculating ROI, consider the cost of setting up environments. For example, let us say you are testing a website and calculating the cost of setting up devices and browsers for cross-browser testing.

Reduce defect leakage

Defect leakage is the number of defects in production because they were not handled properly during the development phase. This results in various problems, such as the cost of leakage, a poor environment, etc. There is a straightforward formula for calculating the cost of defect leakage:

Leakage cost = (X / Y — Z) * 100

Here is a breakdown of that formula:

X is the number of defects detected by the customer.
Y is the number of defects detected by the tester before deployment.
Z is the number of invalid errors. This includes duplicate errors and known issues.

Test reusability

The main goal of tracking test reusability is to avoid duplicate efforts. Why create a new test if you can reuse tests you have already created? Calculate the time and effort saved by using reusable test cases.

Minimize knowledge leakage

To implement a long-term ROI in test automation, calculating the cost of knowledge loss is critical. Let us say an experienced test engineer leaves your organization. The knowledge and experience related to the testing framework or process must be recovered. Even if you hire a new tester, it does not matter how efficient he is; it will take some time for him to learn how the testing process works in your organization. To prevent this, ensure you have documented test processes, setup guides, etc.

Common errors in calculating ROI

Even a supercomputer makes mistakes, and humans are no exception. Test or QA managers tend to make common mistakes when calculating ROI, some of which are as follows.

Considering only automated tests

Many scenarios require only manual test cases, meaning you must create, develop and maintain the manual and automation tests. Visual UI testing is one of these scenarios.

No proper synchronization between the team and the automation tool

Simply switching to automation will not work. Check if your team is ready for the switch. Does it have the required knowledge? If you do, your efforts and budget will do little good. Train them on the latest test automation frameworks and familiarize them with best practices.

No proper test maintenance

Once tests are created and executed, you need to monitor, update and maintain those tests continuously. Maintenance is critical to ensure the tests are still usable after a few months or years.

No long-term ROI planning

When planning the transition to automation, focus on more than just the short-term benefits and investments. Also, analyze how it will impact the business and the team in the long term.

Best practices to improve ROI for automated testing

Do you have the "how" figured out? Then let us now talk about fine-tuning the ROI calculation. Below are some best practices for building a strong ROI:

• You don't need to automate everything. A few things are better done manually. Start with simple and repetitive tests instead of time-consuming and complex tests.
• Only try to automate a stable application.
• Will you be running both automated and manual test cases? Calculate the time it will take team members to create and run all tests.
• When calculating ROI, remember that each test case will be a regression test in the future. It is better to integrate the newer test cases with the existing ones.
• Testing the application in different environments and on other platforms takes time. Use parallel testing.
• Run tests in parallel to complete most of the tests quickly.
• The earlier you start testing, the earlier you can catch the bugs. In the traditional waterfall model, where testing and development are done in separate phases, test automation might be complex early in SDLC. Even developers can test in the latest "shift left" process. The overall goal of this approach is to minimize costs by detecting defects earlier, saving an impressive amount of time and money.
• Use test case management tools to identify redundant test cases faster.
• Maintain proper documentation so the next engineer can build the system efficiently if a resource is lost.

Conclusion

While automated tests can run for 24 hours, manual tests can only be run when the tester is on the system, reducing the average cost of testing hours. Due to continuous development cycles, more functionalities must be tested, and the increasing test effort can be easily handled with test automation. Over time, an extensive test base is created, and for maximum test coverage, more tests are gradually recorded as new functionality is added. In agile software development, there are many iterations; therefore, test automation is a necessity — in addition to unit tests and individual manual tests.

New features/tests in an agile project

Automated testing has many advantages over manual testing. However, it is optional to automate everything. Computerized tests are helpful in testing regression scenarios, and this is because regression testing requires testers to work with large data sets. Automated testing ROI helps determine if it is worth switching to automation. Just think about the time it takes to set up and test cases with manual labor. Then compare that time to the time it takes to set up the same difficulty using an automation tool. Finally, check the ROI in both cases.

Several factors come into play when calculating the cost of automated testing ROI. Choose your testing tool wisely. Also, spend more time on the initial testing phase and use better reporting methods. There is no specific method for calculating automated testing, and the testers or companies must choose a way that suits their needs.