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Measuring Test Automation ROI for Digital Testing

How You Can Accurately Evaluate ROI of Test Automation for Digital Experience Testing

May 24, 2023
Rohan SinghRohan Singh
Rohan Singh

Digital experience testing enables organizations to validate the quality of user experience in their software products, leading to increased conversions and revenue. Gartner predicted that by 2025, approximately 70% of organizations would adopt digital adoption platforms to address insufficient application user experiences. In today's fast-paced environment, adopting automated testing can be a strategic approach to efficiently managing time and costs associated with product development and QA operations.

Implementing a test automation framework may entail high costs, making it crucial to substantiate the potential return on investment (ROI) to justify the decision to investors or stakeholders. Obtaining reliable evidence in the form of quantifiable ROI from automated digital experience testing can be instrumental in assessing the value of a business's testing strategy. However, many organizations encounter challenges in accurately quantifying the ROI of their test automation efforts, making it imperative to seek assistance to make informed decisions about the efficacy of their testing approach.

This blog examines the ROI concept and explores various approaches to calculating the test automation ROI. Additionally, we highlight key factors to consider when determining the ROI of test automation efforts.

The Importance of Calculating ROI for Digital Testing: Understanding the Value of Testing Investments

Measuring the ROI of digital testing is crucial for informed decision-making, resource allocation, and improving customer experience. Quantifying ROI enables organizations to understand the financial impact of their testing efforts, driving data-driven decisions for business growth.

● Informed Decision-making 

Measuring ROI in digital testing informs decision-making by assessing the financial impact of testing, including costs and benefits. Organizations can prioritize resource allocation, process improvements, and initiatives by comparing costs and benefits. ROI analysis identifies tests and modifications with the highest impact, guiding future efforts for improved ROI. Informed decisions based on ROI data ensure digital testing initiatives deliver tangible business value and contribute to bottom-line success.

● ROI Justification for Investments

Measuring the ROI of digital testing validates the value of time and resources invested while showcasing the benefits of testing to stakeholders. Positive results, such as improved customer satisfaction, higher conversion rates, and increased revenue, provide compelling evidence for continued investment in testing. This data-driven approach can persuade executives and investors to prioritize and support ongoing digital testing initiatives.

Read: Calculation of ROI in Mobile App Automation Testing

● Optimized Performance

Measuring ROI on digital testing helps identify high-impact testing activities that drive customer experience and business outcomes. This data enables organizations to improve and optimize their testing process, directing resources to initiatives with the greatest impact. For example, if ROI analysis reveals that certain tests significantly increase conversion rates, the organization can focus its testing efforts on that area for ongoing performance improvements. Additionally, ROI assessment assists in prioritizing testing efforts based on financial impact, allowing organizations to allocate resources strategically and drive overall performance and business growth.

Organizations can leverage ROI in testing to continually enhance the effectiveness of their digital testing efforts, optimizing their impact on customer experience and business outcomes.

Track performance-related issues throughout the mobile app lifecycle. Know more.

What Is the Significance of Measuring ROI for Automated Testing?

Return on investment (ROI) is a valuable metric that provides a numerical representation of the potential return from embedding an automation strategy into your QA workflows. 

Calculating ROI can be instrumental in several ways:

  • Financial Impact: ROI helps you assess the financial impact, whether positive or negative, of investing in automation on your business.
  • Timeframe for Payoff: ROI allows you to estimate when to expect a return on your investment, helping you plan and set realistic expectations.
  • Potential Gains and Losses: ROI provides a clear understanding of the potential gains and losses associated with the investment, enabling informed decision-making.
  • Investor Presentation: ROI empowers your business presentation in front of potential investors, demonstrating the value and potential of your automation plans.

By determining your test automation ROI, you can assess the viability of automation and understand the timeline for achieving a return on your investment. This information is invaluable in making informed decisions about your testing strategies and securing stakeholder support.

Learn more: Calculation of ROI in Mobile App Automation Testing

Critical Metrics for Evaluating Test Automation ROI

When calculating ROI for automation testing, several key metrics should be considered to provide a comprehensive evaluation:

1. Coverage

This metric assesses the percentage of test cases that are automated out of the total test cases and the percentage of automatable test cases that are not currently automated. While higher automation coverage generally correlates with better ROI, it's crucial also to evaluate the test execution capabilities of the automated testing process, such as parallel testing capabilities, connectivity, and integration with standard frameworks.

2. Time Gained

Automation testing can save time compared to manual testing, but it also requires time for setup, which translates to cost. Long-term time savings can be quantified as a return or translated into monetary value based on working hours. Factors like authoring test time, ease of use, script reusability, and time saved in test maintenance due to simplicity must be considered.

Learn more: Why Digital Experience is a Key Priority for CXOs to Achieve Business Goals

3. Bugs

The number of bugs returned is a significant quality indicator. It reflects the effectiveness of the test result analysis and the efficiency of the automated testing process.

As we can see, the ROI of test automation can be reflected in various outcomes, including financial, time-saving, and quality-based aspects. However, obtaining a specific ROI figure requires careful consideration of these metrics and their impact on the overall testing process.

How Can You Calculate the ROI of Automating Digital Experience Testing?

In today's digital landscape, where digital experience monitoring is critical in ensuring software quality, calculating ROI for automation testing can provide valuable insights and inform strategic decisions.

Here's a step-by-step breakdown of calculating the ROI of automating digital experience testing.

Step 1: Identify and itemize the benefits of your investment

  • Consider hours saved in testing, money from not paying manual testers or avoidable expenses such as post-release bug fixes caught by automated tests.

Step 2: Evaluate the cost of building the automation suite

  • Take into account the cost of purchasing or designing an in-house automation solution.
  • Estimate the time and maintenance costs for automating the remaining test cases.

Step 3: Gather the necessary numbers

  • Obtain accurate data on the benefits and costs identified in the previous steps.

Step 4: Use the basic ROI formula to calculate the final value

  • Apply the formula: (Benefits - Costs) / Costs * 100.
  • This will yield a percentage value that represents the ROI of your automation testing investment.

Step 5: Consider ongoing adjustments and maintenance costs

  • Software challenges evolve, and automated tests may require adjustments and maintenance.
  • Factor in these costs to obtain a more comprehensive understanding of the overall ROI.

Step 6: Consider the efficiency ROI calculation

  • Focus on time investment gains by calculating ROI in hours.
  • Consider the continuous 24-hour testing capability of automated tests compared to the typical 8-hour workday of manual testers.
  • Adjust the 24-hour timeframe to 18 or 20 hours to account for potential interruptions or pauses in test cases.

Step 7: Interpret and analyze the results

  • Review the calculated ROI value to gain insights into the financial and operational impact of automation testing in your QA workflows.
  • Consider the implications of the results for decision-making and future strategic planning.
Check: How HeadSpin Helped a Global Consumer Subscription App Load Faster?

The efficiency of ROI Calculation

  • Automated test script development time: Calculate the hourly automation time per test multiplied by the number of automated test cases divided by 8.
  • Automated test script execution time: Calculate the automated test execution time per test multiplied by the number of automated test cases and the period of ROI, divided by 18 or 20.
  • Automated test analysis time: Calculate the test analysis time multiplied by the period of ROI, divided by 8.
  • Automated test maintenance time: Calculate the maintenance time multiplied by the period of ROI, divided by 8.
  • Manual Execution Time: Calculate the manual test execution time multiplied by the number of manual test cases and the period of ROI, divided by 8.

The Period of ROI refers to the time (usually weeks) for which the ROI is being calculated. It is divided by 8 for manual effort and 18 or 20 for automation testing.

It's essential to remember that this approach makes certain assumptions, such as test automation completely replacing manual testing and only one tester being needed for manual testing. Therefore, the calculated values should be a rough guide rather than the final assessment.

Also check: Differentiating Factors That Make HeadSpin Unique

Achieving Accurate ROI Calculations for Automated Testing

Calculating ROI for test automation projects is indeed a complex task, and it's essential to be aware of subtle issues that can impact the accuracy of your calculations:

  1. Determining the monetary value of intangible benefits, such as the cost of fixing errors that are prevented by automated testing, improved website credibility, or enhanced product quality, may be challenging.
  1. Parameters like the costs of accessing simulators/emulators/real devices from third-party providers or maintaining and training a testing team can change unpredictably over time.
  1. It's crucial to remember that automated testing does not guarantee perfect accuracy, and a testing team is still necessary to operate automated tests and troubleshoot any bugs that may arise.

Manual testers may also be required occasionally. Careful consideration of these factors is vital when evaluating the ROI of test automation projects.

How Does HeadSpin's Test Automation Ensure High ROI and Perfect Digital Experience Monitoring for Businesses?

HeadSpin offers an AI-driven Platform for comprehensive digital testing and user experience monitoring. With data science-backed insights, detailed root cause analysis, and testing on real devices, HeadSpin enhances development and testing processes, leading to high-quality digital native apps and increased ROIs.

1. Performance-centric App Development

The HeadSpin Platform enables performance-centric app development by providing deep insights and continuous testing. Organizations can accelerate app performance and meet KPIs by incorporating feedback from testing teams.

2. Digital Experience Insights

HeadSpin's Platform enhances digital native app performance by proactively monitoring functional and non-functional features, providing valuable insights. With media testing, video testing, and end-user experience testing, organizations gather actionable data to perfect digital experiences. Continuous improvement is supported through insights comparison.

3. CI/CD Integration for Automated App Testing

HeadSpin provides seamless CI/CD integration for automated app testing, supporting many open frameworks. With its valuable insights into app performance regression, bug identification, and accelerated time to market, HeadSpin is the preferred choice for comprehensive app testing.

4. Global Testing

HeadSpin empowers companies with global end-to-end testing on real devices across 90+ global locations, eliminating the need to relocate teams. This unique capability enables organizations to understand app behavior in diverse environments and expand their reach effortlessly.

Wrapping Up

Calculating ROI on test automation may appear complex, as it requires thoroughly examining various aspects such as business and product specifics, testing requirements, and processes. It involves selecting the right calculation method, identifying and assessing relevant parameters, and considering additional factors impacting the results.

To address business stakeholders' concerns about automating digital experience testing, providing quantitative data on the costs and benefits of building and maintaining a test automation framework can help gain their support.

HeadSpin's Platform, integrated with the best automation testing frameworks, facilitates seamless test automation that enables businesses to perfect digital experiences and achieve faster time-to-market.

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Q1. What is the typical ROI for automation?

Ans: The average ROI for automation is around 250%, seen within six months of implementation, but actual results may vary based on monetary gains or efficiency improvements.

Q2. How is ROI typically calculated in Agile methodologies?

Ans: Calculating the ROI of a project involves dividing the income or profit by the costs incurred, but various complexities and considerations may need to be considered for accuracy.

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How You Can Accurately Evaluate ROI of Test Automation for Digital Experience Testing

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