How to Estimate the ROI for CD Transformation
A CD transformation is an effective strategy to make an organization future-proof. Revolutionized CD ecosystems bolster innovation, enhance productivity, reduce failures and deliver a much better customer experience. In addition, it dramatically reduces the burden on SRE’s and improves confidence of the development team.
Before taking this plunge, we need to understand and assess our current situation. Evaluating one’s journey will throw light on an organization’s current bearings. In addition, it opens the possibility of potential areas for improvement. Read more on our blog titled Is your DevOps Journey heading the right way? On how you could assess if your DevOps journey is on the right path.
The importance of CD ROI metrics
As organizations rely heavily on their ability or delivery software and services to stay competitive and improve CSAT, measuring metrics on these critical outcomes becomes crucial. Furthermore, these metrics are essential to make a convincing case for transforming a CD platform as it offers a significant improvement qualitatively and quantitatively on business outcomes.
Selecting the parameters that matter
As per a 2019 DORA report, the metrics that capture the effectiveness of the development and delivery process can be summarized in terms of throughput and stability. Throughput of the software delivery process is measured using lead times of code changes from check-in to release along with deployment frequency. Stability is measured using time to restore—the time it takes from detecting a user-impacting incident to having it remediated— and change fail rate, a measure of the quality of the release process.
Parameters for ROI
Measuring ROI for CD transformation: Where to start?
ROI is the measure of effectiveness of an investment in terms of profitability. So before we jump into estimating ROI, we need to anticipate the costs that we will incur and the Delta that we will witness in terms of our benefits.
So ROI can be simply defined by this formula.
ROI = (Gain – Cost) / Cost
Measuring costs :
First, we need to estimate the cost of this transformation. Costs need to be estimated with a broad scope. For example, when organizations are going through a transformation, there arises a need to educate employees. In addition to that, there is the cost of the platform and many other unforeseen costs. Broadly these costs can be classified into four categories.
1. Development and Testing cost
Unlike platforms like SAP and Oracle, the development and implementation costs associated with CD transformation are comparatively low. In addition, most of the modern CD platforms are also available as a service and are very scalable. So it makes sense to start small and then, after realizing benefits, quickly scale up as needed.
OpsMx has set up a well-defined modern CD ecosystem in less than a month for multiple clients. This timeline is significantly less than other contemporary technologies, and OpsMx helps you release your ROI much faster. Read about one of our customers where we transformed their software delivery process within 10 days.
However, choosing between developing and implementing a CD platform solution in-house or having it custom-developed by an expert can significantly improve your journey experience and set up timelines. Reach out to us if you would like to experience a demo.
2. Recurring costs
Apart from the initial development & implementation costs, there can be recurring costs associated with CD setup. These can be time spent by experts, licensing, and management. Therefore, it is pivotal that the companies optimize and monitor these costs to ensure that they maximize the return on their modernization initiatives.
3. The cost associated with change
There are always three facets of any change. They are People Process and Technology. With new innovations, these three facets need to adapt for any business to ensure that they’re making the most of the change. These costs must be taken into account to make this change happen, as these are crucial critical paths of a successful CD transformation.
4. Compliance and security
The cost of a compliance and security failure is challenging to estimate. Every organization is trying to work within the security and policy frameworks. But code vulnerabilities may sometimes lead to data theft and may cause irreversible damage to an organization’s brand. Though difficult to estimate, it is an indispensable part of any risk calculation.
Measuring Benefits
With a modern CD platform, organizations will deliver features, enhancements, and fixes much faster than they used to do earlier. A faster release without compromising quality allows organizations to respond more quickly to market demands and gain a competitive advantage. Innovation further enhances revenues.
With a better deployment frequency, modern CDs boast of a vast reduction in failure rates. For example, organizations with a trained workforce in DevOps and a successful CD can see up to a 70% drop in failure rates.
ROI realization is seen through the pipeline of the software delivery ecosystem. From onboarding to production, it is feasible to estimate how much one stands to gain. Do connect with us for a free assessment.
We will help you calculate your estimated savings from these stages in your pipeline.
- Onboarding time (one time)
- Dev stage per release
- Test stage / release
- Staging stage / release
- Deploy stage/ release
- Production / release
Getting the estimate
ROI = ( cost of failed deliveries + productivity gain ) – ( Solution cost + overhead cost + training cost ) / ( Solution cost + overhead cost + training cost )
Once we have estimated our costs and benefits, we need to fit them into the simple equation. This will give us a glimpse into the future.
Conclusion: The cost of not doing
A puppet lab study has found that organizations with modern Cd platforms can deliver code multiple times faster than those who are not.
The cost of not going through a transformation can be found in the multiple case studies taught in business schools. The journey is not easy. But the cost of not doing it will prove catastrophic to organizations. A CD ecosystem guarantees the promise of speed. And we believe not taking this journey is not an option.
