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How to calculate ROI for test automation?

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ROI (Return on Investment) measures the efficiency of an investment, such as test automation, by evaluating its benefits compared to its costs. It’s a widely used metric due to its simplicity and versatility. An Automation ROI calculator helps estimate the cost savings achieved by implementing automation. Here are the steps to Calculate Automation ROI:

  1. Calculate Manual Execution Time: Determine how long manual testing takes for each test case.
  2. Time Saved by Automation: Time Saved = Manual Execution 

 Time Saved = Manual Execution Time − Automation Execution Time

  1.   Automation ROI Formula:

Automation ROI = Time Saved by AutomationInvestment

Example:

If manual testing takes 100 hours, automated testing reduces it to 40 hours, and the total investment in automation is $5,000:

  • Time saved = 100 – 40 = 60 hours
  • ROI = (60 hours / $5,000) = 12%

Calculating and showcasing automation ROI provides clear quantitative insights into the value of test automation, helping organizations justify and optimize their investment.

What are the factors for determining ROI?

The factors for determining ROI are:

  1. Savings from manual hours saved.
  2. Savings from error reduction.
  3. Savings from productivity improvements.
  4. Savings from business agility.
  5. Benefits from customer satisfaction and brand development.
  6. Savings from improved compliance and data governance.

How to calculate automation test coverage?

To calculate the automation coverage percentage, use the formula:

Automation Coverage Percentage = (Total Number of Test CasesNumber of Automated Test Cases​) x 100

This percentage reflects the proportion of your testing process covered by automation. It provides a clear metric for evaluating how much of the testing workload has shifted from manual to automated testing.

For example:
 If you have 200 automated test cases out of a total of 500 test cases:

Automation Coverage Percentage = (500200​) x 100 = 40%

This means 40% of your testing efforts are automated, giving insight into the efficiency of your automation strategy and identifying areas for improvement.

How does QA Touch enhance calculating ROI for test automation?

QA Touch enhances calculating ROI for test automation by providing integrated tools and features that streamline the process. With QA Touch, teams can track key metrics such as manual execution time, automation execution time, and test case status, enabling them to calculate time saved and overall cost benefits accurately. Its detailed reporting and analytics capabilities help visualize savings from productivity gains, error reduction, and compliance improvements. Additionally, the tool supports continuous tracking of expected and actual ROI, allowing teams to identify gaps and optimize their test automation strategies for better returns over time.

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Sridhar K

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