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Show me the money! How you can see returns up to $259M with a DevOps transformation

How to Measure ROI of DevOps Transformation. This white paper is backed with scientific studies conducted by DevOps Research and Assessment, DORA, with 31,000 professionals worldwide over 6 years to provide clear guidance based on impartial industry data. We found the financial savings of DevOps transformation varies from from $10M to $259M a year.

Looking beyond cost to value

The most innovative companies undertake their technology transformations with a focus on the value they can deliver to their customers. Hence, in addition to measuring cost savings, we show how DevOps done right can be a value driver and innovation engine. Let’s look deeper into how we quantify the cost and value-generating power of DevOps. 

Cost-driven category

Here, we focus on quantifying the cost savings and efficiencies realized by implementing DevOps—for example, how an investment in DevOps reduces costs by cutting the time it takes to resolve outages and avoiding downtime as much as possible. 

However, focusing solely on reducing costs can rarely yield systemic, long-term gains; thereby increasing the importance of going beyond cost-driven strategies. The cost savings achieved in year one “no longer count” beyond year two as the organization adjusts to a new baseline of costs and performance. Worse, only focusing on cost savings signals to technical staff their job is potentially at risk due to automation rather than being liberated from drudge work to better drive business growth. This leads to negative effects on morale and productivity. 

Value-driven category

There are two value drivers in a DevOps transformation, (1) improved efficiency through the reduction of unnecessary rework, and (2) the potential revenue gained by reinvesting the time saved in new offer capabilities.

Adding these cost and value driven categories together, IT and business decision makers can get an estimate of the potential value their organizations can expect to gain from a DevOps transformation. This helps justify the investment needed to implement the required changes. To quantify the impact, we leverage industry benchmark data across low, medium, high, and elite DevOps teams, as described by DORA in its annual Accelerate: State of DevOps report

Combining cost and value

As an example, let’s consider the impact of a DevOps transformation on a large organization with 8,500 technical staff and a medium IT performer. Using the data gained from the DevOps report, we can calculate both the cost and value driven categories along with total impact. 

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2020 challenged some of the best laid plans by enterprises. With nearly everything moving online, Covid-19 pushed forward years of digital transformation. DevOps was at the heart of this transformation journey. After all, delivering software quickly, reliably, and safely to meet the changing needs of customers was crucial to adapt to this new normal.

It is unlikely that the pace of modernization will slow down in 2021. As IT and business leaders further drive digital adoption within their organizations via DevOps, the need to quantify the business benefit from a digital transformation remains top of mind. A reliable model is imperative to drive the right level of investments and measure the returns. This is precisely why we wrote How to Measure ROI of DevOps Transformation. This white paper is backed with scientific studies conducted by DevOps Research and Assessment, DORA, with 31,000 professionals worldwide over 6 years to provide clear guidance based on impartial industry data. We found the financial savings of DevOps transformation varies from from $10M to $259M a year.

Looking beyond cost to value

The most innovative companies undertake their technology transformations with a focus on the value they can deliver to their customers. Hence, in addition to measuring cost savings, we show how DevOps done right can be a value driver and innovation engine. Let’s look deeper into how we quantify the cost and value-generating power of DevOps. 

Cost-driven category

Here, we focus on quantifying the cost savings and efficiencies realized by implementing DevOps—for example, how an investment in DevOps reduces costs by cutting the time it takes to resolve outages and avoiding downtime as much as possible. 

However, focusing solely on reducing costs can rarely yield systemic, long-term gains; thereby increasing the importance of going beyond cost-driven strategies. The cost savings achieved in year one “no longer count” beyond year two as the organization adjusts to a new baseline of costs and performance. Worse, only focusing on cost savings signals to technical staff their job is potentially at risk due to automation rather than being liberated from drudge work to better drive business growth. This leads to negative effects on morale and productivity. 

Value-driven category

There are two value drivers in a DevOps transformation, (1) improved efficiency through the reduction of unnecessary rework, and (2) the potential revenue gained by reinvesting the time saved in new offer capabilities.

Adding these cost and value driven categories together, IT and business decision makers can get an estimate of the potential value their organizations can expect to gain from a DevOps transformation. This helps justify the investment needed to implement the required changes. To quantify the impact, we leverage industry benchmark data across low, medium, high, and elite DevOps teams, as described by DORA in its annual Accelerate: State of DevOps report

Combining cost and value

As an example, let’s consider the impact of a DevOps transformation on a large organization with 8,500 technical staff and a medium IT performer. Using the data gained from the DevOps report, we can calculate both the cost and value driven categories along with total impact. 

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