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Thread: ROI Charts

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    ROI Charts

    Hi All,
    I am not sure whether i have posted this on the right forum or not. My delivery manager has asked me how will the automation help the company and to provide him with the ROI Charts.....As i m not a management guy yet....can anybody brief me what exactly is ROI charts and how should i go on creating it.

    Regards,
    Tahir
    Test 2 Break!!!!

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    Re: ROI Charts

    Tahir

    You may have to do a number of calculations on the cost like cost of the tools, cost of testing effort before automation, effort saved due to automation to calculate the ROI.ROI is Net Quantifiable Benefit from the use of X resources as a percentage of the Net Cost of those resources
    ROI = NQB x 100%/NC.

    You will find number of articles on ROI calculation in the net.

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    Re: ROI Charts

    Tahir do some browsing in the Automation forum there have been several threads within the last year which pertain to your question and should provide you with good information.
    Lynne

    I have not failed. I've just found 10,000 ways that won't work" --Thomas Edison

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    Re: ROI Charts

    Do you know the priorities of your company / delivery manager?
    Is it time, budget or quality?
    Yury
    Testing, Performance Testing, Performance Engineering

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    Re: ROI Charts

    Hi Yury,
    As my company is a product based company the priorites of my company is definately time. I would like to add that we already initated the automation by using TestComplete licence and many of our modules has been automated.
    As most of the modules is still to be automated i have to give valid and strong points to continue automating as it will help the production support team. But how should i tell him all this through ROI charts?
    Also is there any template for such kind of charts.
    Test 2 Break!!!!

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    Re: ROI Charts

    You would need to collect some data first. I hope you have all necessory details. Then I suggest putting together a small presentation to your delivery manager. Key concepts to be showcased in the presentation would be -

    <ul type="square">[*]Give a automation snapshot -
    • Systems automated
    • No of test cases automated till date etc

    [*]What are the sequential gains? Something like -
    <ul type="square">[*]Comprehensive increase in execution efficiency with increased number of test cases automated. Increase in efficiency of XX% noted over a period of 6 months[*]Considerable time savings due to automation testing. As a result, average time savings been at XX% for the past YY months[*]Reduced maintenance time and faster deployment of the product[/list]
    [*]Component Reusability
    <ul type="square">[*]Addition of new test cases to an existing automation project takes less time than the time taken to automate originally[*]The time saved results in greater efficiency for the entire project test execution.[/list]
    [*]ROI (Time)
    <ul type="square">[*]XX% of time saved as a result of automation of YY test cases[*]ROI achieved in lesser iteration with each added implementation[/list]

    Put down a ROI chart showcasing Manual effort, 1st implementation inclusive of Automation Development Effort, 2nd-3rd sub-sequent implementations
    [*]ROI(Cost)
    <ul type="square">[*]XX% cost saved over a period of YY months due to automation[*]Significant reduction in costs in terms of lesser requirement of manual resources[*]Reduced cost justify the investment in automation tools (licenses +maintenance)[/list]

    I hope this helps.

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    Re: ROI Charts

    Just be careful with this. Automation is not always better. Make sure that you ask to automate only the tests\processes that will benefit if automated. When you give a ROI chart you basically sign off on an automation plan (time, resources, budget), and you will be checked against it.
    Make sure to check the following:
    - How often the test\process that is a candidate for automation is being done?
    - How long it takes to do it manually?
    - How long it takes to automate?
    - Is this feature may have often changes?
    - Is it going to be an automated script\app that will require a lot of maintenance?
    - The resources that you need for the automation are going to be taken from some other tasks. Unless these are the same people who do the automation and the manual tests you have to make sure that you are not going to.

    Another point: Automation can be very valuable when accuracy is important (like finance). These are actually of the strongest candidates for automation. What you can save here? What about mistakes of many $$$ to your customers (and to your company)?

    Ofer

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    Re: ROI Charts

    You may also want to add some info for additional benefits of test automation.

    Defects found before release During manual testing
    Defects found after release during manual Testing

    Some firms assume that number of defects found in automated testing before release is 5 times more than in Manual testing ,due to enhanced test coverage.

    Assigning costs to the above is an important part of ROI calculations

    Regards,
    Johnzy

 

 

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