Find the Pain

One of the biggest mistakes I see made with test automation is that people don't step back and determine where their manual testers are spending lots of their time. Instead, they just purchase a UI automation tool and then begin automating tests. In some cases, they may get lucky and automate a test that is a time saver. Other times, they may just take a test can be run manually in 5 minutes, and turn it into a 3 minute automated test. While there is a time savings there, it's going to take a lot of runs in order for that 2 minute savings to really add up.

UI automation tools have their place, but before you consider doing any type of automation, take a good look at where your manual testers are spending their time. Do they spend time populating databases with test data? Do they spend time reading through log files for error messages? Are they spending time manually comparing file names and version versions numbers when doing an install test? These are good candidates for automation. SQL scripts can be created to populate databases, perl or python (or whatever your language of choice is) can be used to parse log files for certain strings, and can be used to query file info as well.

In short, significant time savings can be achieved if you incorporate automation all parts of your test activities, not just the running of the tests themselves.