3 Ways To Measure ROI For Test Automation

Ways to Measure ROI for Test Automation
07Dec, 2021

Automation testing has a significant number of benefits over manual testing, the major benefits are faster and accurate tests leading to faster product delivery.  Transition from manual testing to automation testing is evident but it is important to justify the value of test automation.

It is a known fact that it is not possible to automate all the test scenarios, which is why enterprises follow a mix of manual testing and automation testing strategy. Though automation testing takes precedence over manual testing (wherever applicable), it is important to keep a watchful eye on the short-term & long-term savings of test automation.

Needless to mention that enterprises should have a few KPIs (Key Performance Indicators) to keep a timely check on the ROI of automation testing. Some of the KPIs like savings in man hours, faster execution cycles, etc. cannot be measured in monetary terms but they definitely expedite the time to market.

Irrespective of the web automation framework (e.g. Selenium, Cypress, PlayWright, etc.); enterprises should measure ROI of test automation activities on a regular basis. This principle applies for automation testing across desktops, mobile devices, and more. Enterprises can also leverage the expertise of mobile automation testing services company to make the most out of automation testing!

Formula to measure ‘ROI of Test Automation’

Before we deep dive into the different ways to measure ROI of test automation, let’s first look at how to calculate the ROI. Irrespective of the size and scale of test automation, the overall formula still remains the same.

ROI (Return On Investment) = Savings / Investment

  • Savings: Amount of man hours being saved after transitioning from manual testing to automation testing (along with other non-tangible benefits)
  • Investment: Costs involved in setting up the automation infrastructure (or costs incurred on a cloud-based testing infrastructure)

As seen in the above formula, savings can bring direct $ benefits or it could result in time savings (or resource savings). Whether tests are performed on a local testing infrastructure or cloud-based testing infrastructure, it still results in an expenditure (or Cost to Company). These expenses can be categorized as ‘Investments’ that are expected to yield results on a short-term and long-term basis.

A positive ROI is considered if an investment in a faster test infrastructure results in enormous time savings, thereby resulting in a faster product delivery. Test Flakiness and False Positives are not new in the world of automation testing! Though tests written with modern test automation frameworks like Cypress are less flaky, you still need a scalable, reliable, and secure infrastructure to run Cypress tests at scale!

On the whole; factors like test flakiness, false positives, test re-runs (due to infrastructure or test suite issues), etc. can delay the goal of attaining positive ROI (or break even) with automation testing.

Manual Testing

Key Ways To Measure ROI in Test Automation

Now that we have looked into the formula for calculating ROI in test automation and factors that impact the ROI; let’s deep dive into the key KPIs that can be used to measure the ROI.

The three major parameters that must be considered when measuring ROI in test automation are:

1. Cost

A number of factors like test automation framework, test infrastructure, test suite (or test bed) design, etc. have a direct impact on the overall outcome of web automation testing. The tricky part about the returns on automation testing is that a majority of the monetary returns (or benefits) are not evident straightaway.

The intangible benefits (e.g. savings of critical man hours, savings on recursive investments on in-house infrastructure, etc.) directly results in huge cost savings. A majority of these cost savings can be observed after investing (or building) in a reliable, secure, and scalable test infrastructure.

Consider an example where an enterprise has a team of QA engineers scattered across different geographies. In such a scenario, investing in a local in-house infrastructure results in recursive investments since the infrastructure will need constant maintenance and upgradation. This is where migration of automation tests to a cloud can result in huge savings on multiple fronts like time, cost, and more.

When investing in automation testing, the most critical decision revolves around the investment in test infrastructure. A conscious decision has to be taken if automation testing has to be done locally or on the cloud. The intent should be to shed off the recursive infrastructure costs (by moving to the cloud), thereby ensuring that a secure and scalable infrastructure is always available to run tests (agnostic of the tester’s location)!

Infra costs is the major chunk of investment in automation testing and a correct decision on that front can lead to huge savings with automation tests in the long run!

Also Read – Difference Between Manual Testing and Automation Testing

2. Quality

Machines can never lie 🙂 It is this fact that also increases the trust in test automation. Test Coverage is one of the biggest indicators of the quality of test automation scripts. Higher the test coverage, better is the probability of catching bugs (or improving the overall product quality).

This is the reason why effort should be put in aligning the test automation with the best-suited type of testing. Automation testing when coupled with meaningful integrations like product management tools, bug tracking tools, CI/CD tools, etc.; helps in expediting the process of bug discovery, issue tracking, and issue closure.

All these factors are instrumental in building a better quality product. Enterprises looking to leverage automation testing can consider execution speeds, test reporting, and other such factors in the automation ROI calculation matrix. Though some of the mentioned factors do not result in direct monetary benefits, they do result in huge time savings – a factor that impacts the overall timeline of product delivery.

Regression Testing

3. Speed

It is a known fact that automated tests are more accurate than manually executed tests. Apart from high accuracy, automated tests can be executed at a much faster pace when compared to manual tests.

Keeping these pointers aside, the time incurred in running rigorous test cycles can result in recurring time savings. Automation testing on a scalable and reliable test infrastructure can be leveraged to run:

  • Same tests in parallel on multiple test combinations
  • A number of tests in parallel on same test combinations
  • A number of tests in parallel on multiple test combinations

Integration with CI/CD tools helps in making the most out of automation testing and continuous testing! The result is faster product readiness and top-notch product quality.

Also Read – A Complete Guide to Dos and Don’ts of Test Automation


To summarize, factors like test infrastructure costs, time savings & cost savings (due to automated testing), and overall impact on CAPEX (Capital Expenditure) & OPEX (Operating Expense) should be considered when deriving the long-term impact (or ROI) of test automation.

There is no magic wand to reap the benefits of automation testing, since the overall testing strategy depends on a number of factors – some of which can be controlled by choosing the right test automation provider. Partnering with a proven global QA vendor like KiwiQA that provides test automation services can prove useful in faster execution of your test automation strategy.

Lastly, achieving a break even in test automation requires patience! Eventually, enterprises with the best test automation approach have a higher likelihood of attaining positive ROI.

Avatar for Mit Thakkar
About The Author
Digital Marketer at KiwiQA: Software Testing Service Provider Company Worldwide.

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