The Return on Investment (ROI) for automation can be evaluated by comparing the benefits gained from reduced execution time against the total costs incurred in creating automation scripts.
Benefits
Benefits are primarily derived from time saved during test execution. They can be calculated by:
- Multiplying the execution time saved by the resource cost per unit time
Benefits = Execution Time Saved × Resource Cost
Total Costs
Total costs represent the effort spent on automation development, calculated by:
- Multiplying the time required to generate automation scripts by the resource cost per unit time
Total Costs = Script Development Time × Resource Cost
ROI Formula
Once benefits and costs are known, ROI can be calculated using the following formula:
ROI = ((Benefits − Total Costs) / Total Costs) × 100
Key Insight
A positive ROI indicates that automation provides financial value by reducing execution effort beyond the cost of script development, while a negative ROI suggests that automation may not yet be cost-effective.