Return on Investment (RoI) of Test Automation

How far do we need to go?

Typically, customers planning to go in for Test Automation would like to ascertain the RoI for such projects, before giving the go ahead. The computation of RoI, resting as it does on a number of assumptions, can put Test Automation initiatives on a sticky wicket. Many a time, the vendor is asked to work the RoI which requires specific customer data. The need to seek RoI is typically influenced by the following factors.

Need to Assess RoI

• The high price of branded Test Automation Tools both in terms of licenses and recurring AMC
• The cost of effort to automate which is determined by the complexity of the product, tool and availability of right talent
• The notion that idle time / spare time of the internal team could be deployed towards automation.

RoI may not cut ice

There are instances when RoI is not in tune with expectations. The reasons are given below:

• Very limited availability of budget
• Tendency to view Product Quality as an operational item rather than as a value item
• Flawed assumptions about product maturity, test coverage and in-house talent availability
• Case History, where Tools bought became just shelf-ware
• The psychological fear of “Tester” attrition
• A notion that outsourcing has to be a “cheaper” alternative
• Personal agendas like preference for a tool which may not necessarily suit

Going beyond RoI

Test Automation initiatives should rest on fair grounds and must be viewed with a broader mindset. There are qualitative questions which need to be asked.

• What is the cost of product failure and attendant loss of brand image?
• Does it help to fulfill comprehensive test coverage on a sustainable and repetitive basis?
• Does it improve Go-to-Market speed?
• Does it eliminate human errors induced by the test regimen?
• Does it help to free technical resource time for taking up key product development?
• Does it reduce the dependence on a Tester?

RoI calculation should be viewed as just one component, while carrying out an evaluation for a Test Automation initiative, not this alone.

The RoI Calculator here is a “Do-it-Yourself” tool for a quick appraisal. It has been developed based on Indium’s extensive experience in dealing with Test Automation for a variety of software products for global customers. It looks at benefit from the perspectives of Time, Cost and Regression Capacity.