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Value is only created when the product or feature reaches the customer side.
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Economic concept: “A dollar today is worth more than a dollar tomorrow.”
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Focus on rapid Value creation so that You can offer customers Value as quickly as possible.
Everyone is talking about DevOps. What organisation doesn’t want to develop software more efficiently? So what exactly is the business case for DevOps?
A business case examines the profitability of a venture. It weighs the benefits and opportunities against the costs and risks, and analyses when Return on Investment (ROI) will be achieved.
Where is value created?
A development process starts with an idea, which is defined as a user story and then developed, deployed and released. This process chain is known as the value stream. It is important to understand that no value is being created during the whole process. Value is only created when the product or feature reaches the customer side.
How do you invest in DevOps?
Customers only pay for that value once the product or feature is effectively available. The company can then invest this earned money in new ideas, which then flow through the value stream of definition, development, deployment and release. Investment in DevOps works when some of the money is used for improving the value stream, rather than investing in more new ideas.
Time value of money (TVM)
To understand the DevOps business case, it is crucial to understand the economic concept of the time value of money. A dollar today is worth more than a dollar tomorrow. This means that money available at the present moment is worth more than an identical sum of money in the future, due to its potential earning capacity.
ROI without DevOps
These days, the release cycles of large companies are three months or longer. This means that development takes at least a quarter, and customers receive new products or features approximately every twelve weeks. No value is created during the three-month development period. So, in this example, it takes at least five months to achieve ROI.
ROI with DevOps
A consistent DevOps approach allows for shorter release cycles, meaning that new products or features can be made available to customers more quickly. This reduces development time and means that ROI is achieved sooner. With that, businesses can invest the money back into new ideas, or into further improvements of the value stream.
The DevOps business case
The first step in a DevOps transformation aims to improve the value stream so that products and features can be delivered more quickly through shorter releases.
It is crucial for modern businesses to focus on rapid value creation so that they can offer customers value as quickly as possible. That is the business case for DevOps.
