General

This spreadsheet provides a model to estimate the economic costs and benefits of software testing.
For an explanation of its use, please see "What's my Testing ROI?"
http://www.sourceforge.org/ta-roi/Whats-My-Testing-ROI.pdf
An estimate of costs and benefits over a two year period is calculated from
the values you enter for parameters on each tab.
Gold boxes indicate where you enter a value.
Enter zero for any parameter which is not applicable in your situation.
Parameters
Enter values as indicated. Select the cell for what to enter.
Total ROI
Company
Project
Start Date

Enter an organization name to be used in the report

Enter a project name to be used in the report
Enter the date for the start of the project

Tooling Costs
Vendor
Product
URL
Base License
Additional Seats
Additional Virtual Users
Other

Vendor name
Test Automation product name
Vendor URL
Cost of software license
Incremental cost of seat or other capacity
Incremental cost of virtual user or other capacity
Conversion, support, training, etc.

Test Automation ROI Estimate

Parameter
Test Investment Parameters
Number of Testers
Hourly cost, each tester
Existing Manual Test Procedures
Unique configurations to be tested
Number of releases per year
Existing manual test duration
Scope Growth
Test Scenario Volatility
Cost of Capital

Assumption

Test Productivity Parameters

Test Scenario Design work
Test Procedure Conversion work
Test Object Coding work
Test Object Run work
Test Procedure Run work
Test Procedure Maintenance work
Test Object Maintenance work
Test Effectiveness Parameters
Test effectiveness improvement
Baseline bad fix ratio
Baseline annual outage hours
Average outage cost, $ per hour
Baseline annual incident reports
Average Incident cost, $ each

Units

Definition

1 persons Number of developers and testers to support

1.00
dollars
Average fully burdened hourly cost per tester
1 procedures Number of existing manual test procedures
1 platforms Number of different platforms on which tests are repeated
1.0 releases Number of releases per year
180
days
Average manual testing duration
10%
rate
Average net add/drop application scope
33%
rate
Average percent of test scenarios changed per release
15%
percent
Average cost of capital for discounted cash flow

11.6
4.0
7.9
0.2
3.9
2.0
4.0

Parameters

hours
hours
hours
hours
hours
hours
hours

Average time to design a new test scenario

Average time to convert a procedure to a test object
Average work to code a test scenario in a test object
Average time to run a test object
Average time to manually run a test scenario
Average work to change a manual test procedure
Average work to change a test object

2
factor
Expected improvement in bug removal rate
7%
percent
Observed percent of fixes that cause new bugs
0
hours
Observed outage hours, annualized
1,000 dollars/hour Average cost/loss of one hour of unscheduled downtime
1 incidents Observed production/field incidents, annualized
1,000 dollars each Average cost/loss of one production or field bug report

Time-To-Market Parameters
Note: Enter zeros in this section if your company does not offer commercial software products
Total market for product
$
dollars
Addressable total market for your product, per release
Maximum market share
0.0%
percent
Market share, earliest possible release
Overhead rate
$
dollars
Average daily overhead cost

Prepared 07/21/2015

Page 2 of 12

Test Automation ROI Estimate

Tooling Costs

Test Investment Parameters

Number of Supported Testers

Initial Test Automation Costs

Note: Conversion costs estimated on Productivity worksheet
Data Entry Instructions
1 Enter your assumption for each parameter in the gold boxes, or just use the default.
2 Enter zero for any parameter which is not applicable in your situation.
Test Automation Software
Vendor
Product

Acme Widget
Widget Master

URL
Unit Cost
Base License
Additional Seats
Additional Virtual Users

$
$
$

Other
Total Test Automation Software

Training
Equipment

$
$

Other

Unit

25,000
Site
2,500
Person
500 Virtual User
-

2,500
-

Session

Other
Total Annual Cost

Prepared 07/21/2015

$
$

0
-

Cost

License

Frequency

1 $
4 $
500 $

25,000
10,000
250,000

Once
Once
Once

0 $
$

285,000

Once

1 $
0 $

2,500
-

Once
Once

0 $

Total Initial Cost

Recurring Test Automation Costs

Annual Support

Quantity

Once

287,500

Once

1 $

57,000

Annual

0 $
$

Annual

57,000

Page 3 of 12

Test Automation ROI Estimate

Company
Project
Start Date

Total ROI

My Company
My Product
Start Date

Estimated ROI for Automation of Manual Testing

Time Frame, Months
Total Costs
Total Benefits
Net Cash Flow

$
$
$

344,500
502
(343,998)

Net Present Value

(324,130)

Project ROI
Months to Breakeven

Vendor Recommendation
Company
Product
Number of Base Licenses
Number of Seats
Number of Virtual Users

Prepared 07/21/2015

24

-100%
0

Acme Widget
Widget Master
1
4
500

Page 4 of 12

Test Automation ROI Estimate

Quarterly ROI

Project
Totals
Test Automation Benefits
Productivity
Initial Productivity Effects
Recurring Productivity Effect

$
$

(0)
3

Effectiveness
Outage Cost Reduction
Incident Cost Reduction
Bad Fix Cost Reduction
Total Effectiveness

$
$
$
$

500
500

Cycle Time Reduction

Initial Cycle Time Effects
Recurring Cycle Time Effects

$
$

Benefit Totals
Quarterly
Cumulative

$
$

502
502

Tool License
Annual Tool Support
Training
New Equipment
Other

$
$
$
$
$

285,000
57,000
2,500
-

Cost Totals
Quarterly
Cumulative

$
$

344,500
344,500

$
$

(343,998)
(343,998)

Test Automation Costs

Cash Flow Analysis

Net Cash Flow, Quarterly
Net Cash Flow, Cumulative
ROI, Quarterly
Net Present Value

-100%
($324,130)

Breakeven Month

Time Frame, Months

24

Prepared 07/21/2015

Page 5 of 12

Test Automation ROI Estimate

Quarterly ROI
YEAR 1

1Q

2Q

3Q

4Q

Test Automation Benefits

Productivity
Initial Productivity Effects
Recurring Productivity Effect

$
$

(0) $
- $

(0) $
- $

(0) $
- $

(0)
-

Effectiveness
Outage Cost Reduction
Incident Cost Reduction
Bad Fix Cost Reduction
Total Effectiveness

$
$
$
$

$
$
$
$

$
$
$
$

$
$
$
$

Cycle Time Reduction

Initial Cycle Time Effects
Recurring Cycle Time Effects

$
$

$
$

$
$

$
$

Benefit Totals
Quarterly
Cumulative

$
$

(0) $
(0) $

(0) $
(0) $

(0) $
(0) $

(0)
(0)

Test Automation Costs

Tool License
Annual Tool Support
Training
New Equipment
Other
Cost Totals
Quarterly
Cumulative

285,000

$
$
$

2,500
- $

$
$

287,500 $
287,500 $

- $
287,500 $

- $
287,500 $

287,500

$
$

(287,500) $
(287,500) $

(0) $
(287,500) $

(0) $
(287,500) $

(0)
(287,500)

Cash Flow Analysis

Net Cash Flow, Quarterly
Net Cash Flow, Cumulative
ROI, Quarterly

-100%

-100%

-100%

-100%

Net Present Value

Breakeven Month
Time Frame, Months

Prepared 07/21/2015

Page 6 of 12

Test Automation ROI Estimate

Quarterly ROI
YEAR 2

1Q

2Q

3Q

4Q

Test Automation Benefits

Productivity
Initial Productivity Effects
Recurring Productivity Effect

$
$

Effectiveness
Outage Cost Reduction
Incident Cost Reduction
Bad Fix Cost Reduction
Total Effectiveness

$
$
$
$

125
125

$
$
$
$

125
125

$
$
$
$

125
125

$
$
$
$

125
125

Cycle Time Reduction

Initial Cycle Time Effects
Recurring Cycle Time Effects

$
$

$
$

$
$

$
$

Benefit Totals
Quarterly
Cumulative

$
$

- $
1 $

- $
1 $

126 $
125 $

- $
1 $

126 $
251 $

126 $
377 $

126
502

Test Automation Costs

Tool License
Annual Tool Support
Training
New Equipment
Other
Cost Totals
Quarterly
Cumulative

57,000

$
$

57,000 $
344,500 $

- $
344,500 $

- $
344,500 $

344,500

$
$

(56,874) $
(344,375) $

126 $
(344,249) $

126 $
(344,123) $

126
(343,998)

Cash Flow Analysis

Net Cash Flow, Quarterly
Net Cash Flow, Cumulative
ROI, Quarterly

-100%

-100%

-100%

-100%

Net Present Value

Breakeven Month
Time Frame, Months

Prepared 07/21/2015

Page 7 of 12

Test Automation ROI Estimate

Effectiveness

Effectiveness Parameters
Test Effectiveness Improvement
Average Outage cost, $ per hour
Baseline Outage hours, annual
Average Incident cost, $ each
Baseline incidents, annual
Bad Fix Rate

Availability Effect
Unscheduled Downtime, hours per year
Availability, in "Nines"
Total Annual Outage Cost

Incident Rate Effect

Number of incidents per year
Total Annual Incident Cost

Bad Fix Effect

Expected Bad Fixes
Annual Bad Fix Cost

Total Annual Effectiveness Benefit

Prepared 07/21/2015

$
$

2
1,000
0
1,000
1
7%

Automated
Difference
0.0
0.0
0.0
100.000%
100.000%
0.000%
- $
- $
-

Manual

1
1,000 $

1
500 $

0
$

-1
(500)

0
$

0
$

500 $

(500)

Page 8 of 12

Test Automation ROI Estimate

Productivity

Productivity Parameters
Test Scenario Design Hours

Manual

Test Object Coding Hours

Test Scenario Execution Hours
Test Scenario Revision Hours
Scope Parameters
Number of Platforms
Number of Test Scenarios
Volatility Parameters

Automated
4.0
4.0

Difference
0.0

0.0
3.9
2.0

7.9
0.2
4.0

-7.9
3.7
-2.0

1
1

1
1

0.0
0.0

1
10%
33%

1
10%
33%

0
0%
0%

4
4

4
0
4

4
(4)
0

4 $

4 $

0
4

Per Release Productivity Effects

New Test Scenarios
Design Hours
Coding Hours

0
0
-

0
0
1

Total Hours, New Scenarios

Revised Test Scenarios

Revision Hours

0
1

0
1

Total Hours, Scenario Revisions

Unchanged Test Scenarios

Total Test Scenarios

Total Execution Hours, all Scenarios

(4)

(3)

5 $

3 $

(3)

(3)

Number Releases per Year

Net Growth, Test Scenarios
Percent Changed Test Scenarios
Release Duration Parameters
Number Releases per Year

Number Quarters per Release

Number Months per Release
Test Cycle Elapsed Days

4.0
12.0
180

Initial Productivity Effects

Conversion Hours
Execution Hours
Initial Release Total Hours
Initial Release, Total Cost
Initial Release in Quarter

Total Hours, Subsequent Releases

Total Cost, Subsequent Releases
Annual Productivity Effect

Prepared 07/21/2015

8%

-49%

Page 9 of 12

Test Automation ROI Estimate

Time-To-Market Parameters
Total Market for product under test
Maximum market share
Number of Releases per Year
Typical Test Time, Manual Testing
Daily Factory Overhead
Maximum Revenue
Average Daily Opportunity Loss

Time-To-Market Effect
Initial Test Cycle
First effected quarter
Initial test effort reduction
Initial Test Cycle Time
Value of initial test cycle reduction
Subsequent Test Cycles
First effected quarter
Recurring test effort reduction
Recurring Test Cycle Time
Value of recurring test cycle reduction
Release Effect
Initial Release revenue impact
Subsequent Release revenue impact

Prepared 07/21/2015

$
$
$

Cycle Time

0.0%
1
180
-

Manual

Automated

Difference

5
8%

180

14
-

-89
-

$
$

194

9
-49%

180

91

Page 10 of 12

Test Automation ROI Estimate

Notices

The formulas and formatting in this spreadsheet are Copyright 2005, mVerify Corporation
and 2011, Robert V. Binder.
Your usage of the formulas contained in this spreadsheet (the "program" in the GNU
General Public License "GPL") is governed by the GNU GPL. This program is free software:
you can redistribute it and/or modify it under the terms of the GNU GPL as published by the
Free Software Foundation, either version 3 of the License, or (at your option) any later
version.
Please note that GNU GPL requires you to include this notice if you distribute this
spreadsheet or any derivative of it.

This program is provided in the hope that it will be useful, but WITHOUT ANY WARRANTY;
without even the implied warranty of MERCHANTABILITY or FITNESS FOR A
PARTICULAR PURPOSE. See the GNU General Public License for more details.
The full GNU General Public License may be viewed at
http://www.gnu.org/licenses/gpl.html

file:///var/www/apps/conversion/tmp/scratch_5/277101664.xlsx

07/21/2015

Version
0.8
1.0
1.1

Date
4-Sep-2005
3-Jun-2009
12-Apr-2011

Note
Initial release
Corrected reported errors, first GPL version
Add How to tab, release notes, Published on Source Forge