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How do Parameterization and Data-Driving relate to each other in QTP?

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To data-driven, we have to parameterize. i.e. we have to make the constant value as a parameter so that in each interaction(cycle) it takes a value that is supplied in a run-time data table.

Through parameterization only we can drive a transaction (action) with different sets of data. You know running the script with the same set of data several times is not suggested, and it's also of no use.

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