How to Measure the ROI of the test automation initiative

By Aarti Sharma July 18, 2017 Blog

roi-test-automationThe last few years have been witness to the downfall of some major companies because of poorly and insufficiently tested software. The bankruptcy of Mt. Gox and Tri Valley Growers and the drop in the equity and the subsequent acquisition of global financial company Knight Frank are just a few examples of the huge financial impact poorly tested software can have on the future of an organization. It has been estimated that the cost of software defects amount to over USD $60 billion annually in the U.S alone – this is more than the valuation of Rupert Murdoch’s News Corp!

Clearly, bugs and software defects have no place in today’s competitive business environment. Owing to this, and also due to the rise of agile development methodologies, businesses are increasing their focus on software testing so that they can release bug-free software that performs optimally. Testing initiatives, especially test automation, have assumed a large role in the software development process. Having said that, test automation has been linked with high upfront costs and as with everything else, organizations want to realize the ROI (Return on Investment) of their testing initiatives almost immediately. So, while you can Google and access many ROI calculators, you need to look beyond the traditional definition of ROI to measure the true impact of your test automation initiatives.

In this blog, we take a look at how to measure the true ROI of test automation

Information value
The value of information can be hard to measure tangibly, but can add to the returns of the test automation investment substantially. With test automation, testers and developers can not only catch bugs but can gain deeper insights and information regarding the software being developed. They can get ideas for new features and identify ways to add more power to the features by coupling or decoupling them to provide greater benefits to the users, make a more robust and error-free product faster and drive down developmental and support costs.

Time value
Manual testing takes time and owing to its nature cannot be as comprehensive in nature. With test automation, an organization can increase the scope of testing, test faster and implement test results with greater speed – all of which contribute to the ROI. Test automation increases testing effectiveness and testing efficiency by increasing the average number of tests that can be run in an hour of the testers’ time. This increased effectiveness and efficiency drives down product development time and costs and improves the company bottom line and eventually the company top line by increasing customer satisfaction and building loyalty.

Resource Value
With test automation, the value of testing can be amplified. One space where this rings true is in increasing resource value. While manual testing cannot be written off completely, with test automation, more testing can be done faster, tests can be repeated multiple times with test scenarios remaining the same with repeated input and run times. The same tests can also be run on different systems or scenarios to gauge the robustness of the software without eating into resource time. Since test objects can be saved and re-run, organizations can perform regression tests easily and ensure that software enhancements, configurations, and other changes do not negatively impact software performance. Test automation, especially scriptless test automation, also eliminates the need for finding good, trained and experienced testing resources which are a challenge that many organizations face and thus, indirectly impacts the ROI.

Opportunity value
Those not in favor of test automation contend that building a test automation suite takes time and that the cost of test automation tools is significantly high. They say that the time to build a test automation suite, testing the product and then releasing the product can lead to opportunity costs thus decreasing the value of the test automation initiatives. Having said this it is important to note that while test automation suites might take a little time investment, they can be reused and rerun at will, thus reducing the incremental costs accrued during retesting. Additionally, scriptless test automation tools make it easier to build and deploy test automation initiatives as the testers do not have to write even a single line of code. Tests can be built easily using code assets in Scriptless Test Automation and thus provides developers and testers the flexibility to scale up or down, ensure timely deliveries and build opportunity value by enabling a faster time-to-market.

Software Testing and Test Automation, is an investment to ensure that a quality product gets to the market. Like all investment decisions – there is a need to review the effectiveness of the investment that has been made. Our hope is this post will help you when you go about trying to make that determination!