Do you need a DevOps platform but don’t know how to build a business case for it?
I have had the pleasure to be surrounded with some of the brightest DevOps professionals there is - some of which I have also interviewed at depth in our DevOps Sauna podcast. Having now been a Chief Marketing Officer at Eficode for a little over a year, I blend the deep DevOps insight with my long experience in the tech industry. In this blog post I will give you a recipe for how to build a convincing business case for investing in a DevOps platform. A business case that speaks to people that have decision-making power but little or no DevOps knowledge. In a language that will help win their hearts and minds, we will unpack the positive financial impacts of using a DevOps platform. We will also cover using a business case calculator to support your case.
What do you do when investing in technology makes sense to you, but not to anyone else?
As an IT or software development professional, you might have been in a situation where you have done a technology review and are delightfully convinced about the technology and the benefits it could bring to your team.
Unfortunately, once you start making the case for it, you may run into a predicament: while the benefits might be obvious to you (maybe even a no-brainer), how do you convert that obvious value into numbers? More importantly, how do you convert it into numbers that will win the hearts and minds of the decision-makers in your organization?
Explaining the value of a DevOps platform to others
When it comes to investing in a DevOps platform, it’s all very well to understand how this investment could generate value for your business. But you also need to be able to explain the value of DevOps platforms and the toolchain to someone who doesn’t know a thing about DevOps, but holds the key to the gold treasure vault.
The main challenge here is that, when organizations have multiple projects they could finance, it’s not enough to explain the investments benefits and financial value to senior stakeholders. You also have to be able to argue that this investment is a better one than something else they have in mind.
It comes back down to understanding how your decision-maker thinks about investments, and how to build your story using their language.
That’s why we will now go through the secret of how to build a business case for your DevOps platform by doing the following:
- Explaining the four key terms that decision-makers understand (in layman’s terms)
- Unpacking the DevOps platform financial impacts, using different metrics
- Considering what to expect from investing in this business case
How finance decision-makers think
You might be convinced that the benefits of DevOps can easily be calculated and the ROI is obvious (it can, and it is – as you will know if you use our DevOps business case calculator or toolchain maintenance and support cost guide). But convincing decision-makers is an art, as well as a science. Rather than just focusing on your team, your projects or what an investment in a DevOps platform means to you, it’s important to use the right language for your audience.
When you use these four key terms it will be clear to those who hold the purse strings that you’ve done your homework. It will also help them compare the benefits of the solution you propose in numerical terms, with any other projects that might be competing for the same pot of money.
Four key terms to use when discussing your DevOps business case with non-DevOps-literate decision-makers
Decision-makers want to know how an investment in your project compares against other alternatives. You need to be able to answer this unspoken question: “If I have a thousand euros, and I have to make a choice, where should I put the money?”
Obviously, you’ll need to have done the calculations first, to work out whether there is a good business case for using DevOps platform (we’ll go into this detail a bit later). Fortunately, you don’t have to work it all out yourself, or even source the raw data to use for calculations. You can start by using an existing business case calculator.
Then, once you have the numbers ready, it’s important to use the right language.
These are the four key terms to use when building any business case:
1. Net Present Value
To calculate Net Present Value (often just referred to as NPV), consider all the costs and all the benefits over the period of the business case, and estimate how much the investment would be worth if it all happened here and now, instead of over a period of time.
2. Payback time
Answer how long it would take for you to recover the amount of money you’ve invested before it starts to generate profit or net savings.
3. Return on investment
Often just referred to as ROI, the return on investment is a numerical calculation that demonstrates the following: if you invest one euro for this solution, how many euros will you get back?
This looks at how well you’ve been able to estimate all costs and benefits. Consider how much the business case would change if there were a 10% increase in costs, or a 10% decrease in benefits.
Four key benefits of investing in a DevOps platform
You have done the calculations. You’ve worked out the NPV, ROI, payback time and sensitivity – and you’ve been able to use the right terminology to explain the financial benefits of investing in a DevOps solution. It’s also important to consider the benefits.
At this point, it’s good to get really specific and match up the benefits that are so obvious to you and your team (which you have already demonstrated, in financial terms) with the real-life benefits.
As we explain in more detail in our guide on How to estimate DevOps toolchain maintenance and support costs, four key benefits stand out the most.
1. A DevOps platform helps you reduce non-productive time and improve development productivity
When software development experts spend their precious time on maintaining and tinkering with individual solutions in the toolchain, it means they’re not spending it on writing code. Decision-makers like to use the phrase ‘opportunity cost’ (the loss or benefit that could have been experienced if the best alternative was chosen).
The opportunity cost of playing an “acting role as an IT specialist”, rather than a software developer, has a negative business implication. However, when software development experts can focus solely on getting more and better software done, this prevents disruption to multiple people involved in the software development pipeline.
The alternative, always-available and up-to-date software development tools enable successful and on-time builds, tests, and deployments. Because requirements become deployable code more quickly, your teams are able to deliver more features and address more technical debt in the same time.
2. A DevOps platform helps your employees transition to higher value-adding work – and reduces cycle times
In the book Accelerate, Nicole Forsgren defines cycle time as, “The time from code starting to be worked on by development, to code in a deployable state”.
In any organization, someone has to make sure the software development toolchain is continuously maintained and improved. Usually this falls to individuals who take on these tasks in addition to other roles. Rather than being allowed to focus on value-adding tasks, these people become ‘chief cooks and bottle washers’ - they do anything and everything. So, rather than using their specialized skills to create great software, their efforts are dispersed. As a result, they don’t always have the capacity to focus on the higher level work they are qualified to do, as these lower-level duties take up so much of their time.
While it might seem like a bit of maintenance here and there is no big deal, the value of focus cannot be underestimated. The key questions to address here are:
- Should they be experts in software development and delivery?
- Should they have to master the maintenance of assembly line tooling?
For most teams, the answer is clear: they should spend their time on the software itself. The software assembly line is a must-have, while teams rarely need to excel in its maintenance to be competitive in their main job. DevOps pipeline management can be outsourced to domain experts. When less time is spent on maintaining tools, people can focus on improving automation, and fewer lower-level people are required to keep things going.
3. A DevOps platform helps you accelerate revenue from software lead time
What is lead time? In case it needs explaining (don’t forget – your senior stakeholders may not be completely familiar with DevOps terminology), Nicole Forsgren says, “Lead time is the time it takes to go from a customer making a request to the request being satisfied”.
The faster deployable code reaches customers, the happier they are, the more effective your product can be, and the more revenue can be generated, faster. Better software development practices reduce lead time. Your decision-makers will see the positive implications of this statement immediately.
4. A DevOps platform can help your company recover from disruptions more quickly and reduce MTTR
When convincing senior stakeholders about the business case for a DevOps platform, one of the key points lies in the term MTTR.
What does MTTR mean? MTTR is Mean Time to Recovery. Things go wrong, even with the best intentions. But the more quickly service disruptions can be reduced, the better for everyone involved.
When failure rate is reduced, it is possible to mitigate service disruptions more quickly and minimize revenue loss due to downtime. Decision-makers will love this fact. That’s why it’s important to include this reason when demonstrating your argument for investing in a DevOps platform: when you’re using the right tools, the toolchain is always ready to go in the event of service disruption.
As a result, working time can be spent on addressing the problem in production, not dealing with toolchain issues that can be better dealt with by toolchain specialists and experts who can identify and resolve them more efficiently.
Putting it all together: combining key DevOps platform business case inputs
Now that you’re familiar with the key terms that need to be included in your business case and the benefits to articulate, it’s time to connect the dots.
It’s great to use a business case calculator, but a tool is only as valuable as its relevance to your organization. The business case calculator tool must include relevant facts about your organisation and translate these into DevOps metrics.
You’ll need to include information like:
- The fully-loaded salary costs of an individual software developer
- Your company’s total revenue
- The value your company is expecting to generate from its software R&D function
- Specific DevOps metrics, including cycle time, lead time, and MTTR
What’s more, it’s not enough to capture these facts: you need to be able to model the relationship between different inputs with the final metrics and outputs.
Building a business case on your own is possible, but it’s not easy
I would advise against trying to build one yourself. Building an investment proposal of any sort isn’t easy. Building an investment proposal calculator is harder by an order of magnitude! It’s wise to leverage existing resources developed by people who have built dozens or hundreds of business cases themselves, rather than reinventing the wheel.
Typically someone in a company – like an R&D, software or ops person – builds business cases only every so often. Leveraging a model that has been created by a solution provider who builds business cases all the time is just logical. It takes a lot of cases to ensure a model has been properly acid tested.
The good thing is, Eficode has done this a lot, and we’ve created a handy business case calculator that you can use – for free.
Our business case calculator looks at the key DevOps metrics, weighs these up, does the calculations and estimates your savings potential, revenue impact, as well as investment costs. It then presents the business case in terms of three of the metrics we discussed earlier: NPV, ROI and payback time.
So if you’d rather create a business case for the DevOps platform on your own, all you’ll need to do is pop these details in, and it will work out the calculations for you.
Consider these seven inputs to calculate a business case for a DevOps platform
- Your company revenue
- The number of software development personnel currently employed
- Current downtime per month in your software development toolchain
- The number of toolchain specialists employed, measured as full-time equivalent employees, in terms of the amount of working time taken to manage your toolchain
- Cycle time
- Lead time
- Number and length of unplanned outages of your software in production
Once these numbers have been inputted, you will get a full-fledged calculation based on our experience with other customers. We can then refine those numbers in a business value workshop later, to improve accuracy and add color to the argument.
Let DevOps platform experts help you develop the most thorough, valuable business case you can for your organization
While it is possible to create a business case on your own, using the tools we have created, I would like to invite you and any colleagues you think would benefit from being involved in building a business case for the advantages of a DevOps platform, to a business value workshop.
In this workshop you can experience the benefits, advantages and savings of using a DevOps tool. We discuss all the variables mentioned in this blog post and much more. And we’ll build a personalized business case based on your company’s unique situation and characteristics.
- You need to be able to argue your business case to financially-savvy people using familiar jargon to them, so that they can compare your business case with other business cases they have in the front of them that might be competing for the same pot of cash.
- The key terms to include in a business case are: Net Present Value, Return on Investment, and Payback time.
- The key reasons for business the case for a DevOps Platform include: R&D team productivity improvements, improved efficiency for toolchain and automation specialists, cycle time and lead time acceleration, and the mitigation of frequency and recovery time of unplanned outages.
It’s not massively complicated, but it’s not easy either. So if you’re ready to build a business case for investing in DevOps platforms that can help you improve ROI, reduce software pipeline costs and bring more efficiency (with less stress and frustration) to your R&D team, get in touch.
We’d love to help and our award-winning, one-stop shop for DevOps tools, Eficode ROOT integrates with over 40 tools so you can spend less time managing your tools and more time developing great software.