Whether you’re considering investing in test automation or you’ve already purchased a tool, understanding the value it brings is fundamental - not just for your team but also to the wider organization. In this blog post, we’ll cover how you can measure business value and calculate Return on Investment (ROI) of test automation in order to get support from management and budget holders.
Why should we invest in test automation?
Asking this question at the offset of your test automation tool evaluation and implementation is crucial. By uncovering the ‘why’ at an early stage, you’re laying the tracks for successful test automation adoption in your organization. Not just to get support for the investment in the first place, but to make sure management will continue putting budget towards it, and support further scaling.
To lay these tracks, you should start by asking three foundational questions:
In the following, we’ll take a closer look at answering each of these. Make sure to watch our webinar Best Practices: Measuring the Business Value of Test Automation to learn more and to get practical examples of how businesses are estimating value that you can apply to your own case.
It all starts at the root of the problem. If you are the one advocating for an investment in test automation within your organization, you probably already have a clear idea of what challenges you’re facing or which issues you’re trying to resolve. Mapping these out is the first step in calculating value.
For many teams, the challenge starts with manual testing. Manual testing is resource-heavy and time-consuming, particularly the repetitive types of testing such as regression testing. This has implications for the QA team and the wider business.
For the QA team, it steals time away from important, higher-value work. This means bottlenecks emerge, and it’s hard to keep pace with development and release cycles. Testers get worn down from highly repetitive work, which increases the risk that they’ll overlook something important.
For the business, overworked testers mean errors can slip into the production environment and have negative implications on the product quality. Slow, repetitive testing prohibits agility and the ability to innovate. Bottlenecks mean slow responsiveness to changes in customer demand and the inability to compete in the market. To some businesses, buggy functionality could mean disruptions to internal and external processes; an employee might not be able to log in to a platform and do their job (disrupting productivity), and a customer might not be able to check out items in their basket (disrupting revenue).
These challenges and their implications may vary from business to business, so make sure to map out the ones specific to your case.
See an example below of how this can be visualized:
The next step in estimating value and calculating the ROI of test automation is uncovering the desired state. Considering what success looks like based on solving the core challenges will help you identify desired outcomes, and later, metrics to measure those outcomes.
The desired state may be a combination of the following points:
These points can then be translated into desired outcomes:
The last step in measuring the value of test automation is aligning the desired outcomes to measurable metrics.
Remember that success isn’t just measured within the QA team, but across the organization too. If, for example, job satisfaction increases as a result of minimizing testers’ repetitive, tedious work, this can be measured in internal surveys and bump up employee satisfaction averages across the organization. Or similarly, if the product quality increases as a result of smoother development cycles, this can be measured through customer satisfaction surveys and help improve product trust and NPS scores.
Equally important is that savings in hours or skilled resources doesn’t have to mean a reduction in headcount. On the contrary, repurposing hours to other disciplines that can bring more value is often a more desirable state, not just for the employees, but for the business. Making this clear in your automation metrics visualization process is key.
In general, when it comes to calculating metrics, it’s key that these are ‘translatable’ as value-drivers for the wider business. Although the meaning may be the same, speaking the language of senior management can be the defining factor that will secure you the budget for your test automation tool investment.
See below how the outcomes outlined above translate into metrics for the QA team and for business management.
Metrics related to costs and hours can be further translated into ROI calculations. Compare the costs of the tool and resources required to implement and use it to the costs you’re saving doing manual testing. When will you break even?
You can use dashboards fed with continuous data to keep track of these metrics in a way that will enable you to see and forecast developments over time.
Dashboards are a good way to visualize positive impact, and keep track of metrics that aren’t moving in the direction you want them to. When this is the case, you can more easily pinpoint the root of the cause with visual insights that show you when and where undesired spikes occurred.
Measuring value should be a core part of any investment. That’s why we’ve hosted a webinar on this topic, as a part of our best practice webinar series: Measuring the Business Value of Test Automation. Watch it to learn much more about how to identify relevant metrics based on your business’ objectives, and how to turn these into value realization dashboards.