To set the role to “Automation” in Microsoft Test Manager (MTM), you need to setup the lab environment first.
To setup lab environment, you have to have Test Controller installed (download Test Controller).
To install and config Test Controller on virtual machine, you have to config the Lab Management from TFS Admin Console (there is an Lab Management update for TFS).
To Config Lab Management, you have to install “System Center Virtual Machine Manager 2008 R2 Admin Console” on TFS server.
To install “System Center Virtual Machine Manager 2008 R2 Admin Console“, you can run “Virtual Machine Manager Configuration Analyzer” to analyze the prerequisites.
Then you need to raise the “Domain Functional Level” to at least “1”.