The pace of software development and delivery is where the organization’s success lies in the ever-evolving, speed-driven digital world. a
Many IT organizations have been transforming over the period to leverage the technological trends for enhanced software delivery process.
At this very juncture, DevOps has evolved on a larger scale and rendered a host of benefits to the organizations by being part and parcel of every business function.
There has been a tremendous rise in organizational preference for DevOps as it can facilitate a collaborative working culture in which software development, testing, and deployment can occur swiftly, reliably and constantly.
DevOps has not only accelerated the pace of software delivery but also provided many other benefits including improved customer experience, cost savings, quick failure detection, and faster recovery, among others.
Despite the aforementioned benefits, there’s one thing that continues to perturb the organizations in their DevOps journey — How to Measure Return on Investment (ROI) of DevOps?
Before we answer this question, let us know Why to Measure DevOps ROI?
Calculating ROI is the first and foremost step before initiating a new technology transformation.
Measuring the ROI of DevOps helps in tracking the progress that comes from the new collaborative efforts. It helps the business entrepreneurs in accelerating their DevOps plans across the organization, whether they’re just beginning with DevOps or well along in the transformation.
If the organizations are falling behind in their DevOps journey, the DevOps ROI guides them to shift course, transform and drift towards the IT future.
Even if the organizations have already embraced the cultural transformation, realizing the DevOps ROI lets them know if they are on the right path and helps in upgrading their efforts.
Also Read: How DevOps Helps ‘Startups’? An Overview!
Measuring ROI from DevOps
Return on Investment (ROI) is a performance measure to know the amount of return on a particular investment.
(Current value of Investment — Cost of Investment)
ROI (%) = — — — — — — — — — — — — — — — — — — — — — — — X 100
Cost of Investment
The below four steps are followed in order to calculate the ROI from DevOps
1) Calculating Software Development Costs: Knowing the existing costs helps in understanding the savings. It starts by finding the hourly cost of software development. The general formula for it is as follows:
2) Calculating Process Initiation Costs: The second step involves calculating the costs incurred during the introduction of processes. It ranges from development practices to CI/CD pipeline, and data security and protection.
The new automation tools play a prominent role in every step. So, to know the true investment, the costs of reaching the new level of automation with the new tools should be added to the original cost of the tools.
3) Calculating Time Savings: The third step is to calculate the time savings gained by the successful implementation of DevOps tools across the business. This should be precise and accurate to realize the actual financial benefits to the business.
4) Calculating Profits: This is the final step to realize the financial benefits or ROI monetary value of successful DevOps implementation. It is calculated by comparing the time savings and the cost of introducing the process.
The calculations over a one-year period give the savings realized in that particular year, and three years and over gives long term realization.
The DevOps ROI percentage can be calculated by:
(Total Savings Per Hr X Cost Per Hr) — (Cost of Process)
— — — — — — — — — — — — —— — — — — — — — — — X 100
Cost of Process Introduction
In a bid to achieve a competitive edge in the speed-driven digital world, organizations are increasingly adopting DevOps culture. But to drive a robust ROI and offer optimal value to the customer, the organizations should see where they stand in their DevOps journey.
Realize DevOps Customer Satisfaction, ROI and Stay ahead!