What is ROI from DevOps and how do you measure it? 30 Jan 2024
The fast pace at which software development takes place in a rapidly changing digital world determines an organization’s success. Numerous IT organizations have undergone modifications in response to technological trends and sophisticated software delivery processes.
On the edge of development, DevOps outgrew expectations and began to provide several benefits to the organization’s business activities.
DevOps has become increasingly popular among enterprises because it combines an intuitive work culture. Hiring DevOps for your firm is a crucial procedure that involves several interconnected stages.
This includes completing software development, testing, deployment, and other related procedures in a timely, reliable, and consistent manner.
DevOps has not only accelerated the software delivery process, but it has also improved the customer experience, failure detection, cost savings, and recovery time.
Aside from the benefits described above, there is one problem that requires enterprises to be cautious during the DevOps transformation path. How do you calculate the ROI of DevOps? Let us have a look at the parts that go into greater detail on these topics.
DevOps for Business: A Brief Overview
The DevOps technique begins with the success of your internal organization. Companies leverage sophisticated open-source solutions, such as Github actions for DevOps, to automate software development processes. The main thing to understand about DevOps is that it is a blend of developers and operations.
DevOps is an integrated process—with improved communication between your team, operational goals, and developer goals, your organization will:
- Quickly resolve incidents
- Quickly release new features
- Reduce risks with process automation
- Increase developer and customer happiness
According to the IDC analysis, the worldwide value of the DevOps market will increase significantly from $2.9 billion to $8 billion by 2022. Many IT teams use DevOps technology to power their businesses and internal operations.
DevOps allows you to keep up with the latest developments and best practices. With DevOps, you may devise the ideal strategy for your organization, not only to improve automation but also to accelerate business growth for high scalability.
Why should you calculate DevOps ROI?
Return on Investment (ROI) is a performance metric used to determine the amount of return on a certain investment.
Here’s the basic ROI calculation formula, which you presumably already know.
Return on Investment (percentage) = (existing value of investment – investment cost) / investment cost * 100.
Simply explained, ROI, or Return on Investment, is the ratio of net profit to the cost of investment for any organization.
However, why should we measure ROI? ROI emphasizes the measurement of the investment’s effectiveness in terms of profitability.
Before you begin a new project, ROI calculation is an important stage that allows you to plan the project, predict the costs, and establish the objectives for building successful initiatives.
Calculating ROI allows you to see if the project is feasible and understand how to get started. Furthermore, it adds value when sourcing the budget from senior management.
Before presenting your ideas to the board, it is helpful to have numbers to back up your concept.
You should be able to demonstrate to the corporation that the project you want to initiate adds more value than the initial investment.
Though some projects make calculating ROI easier, others, such as DevOps, complicate the process. As a result, you should employ metrics that allow you to analyze ROI and establish corporate goals.
The Impact of DevOps on ROI
Software releases do not last in a non-DevOps world; they can include features, changes, and the most recent upgrades that development teams have created since the previous release. Every piece of code that the developer produces but does not ship adds no value to your business.
Developers, like Just-In-Time manufacturers, can generate value and accelerate the rate at which code is delivered and completes the process.
In today’s digital transformation, DevOps engineers must rely on the best DevOps tools to release innovative features and promptly fix problems in comparison to competitors.
DevOps aims to make software releases continuous, regular, and automated. Once you can deploy software multiple times per day, it is not difficult to push an individual into production.
Conventional releases necessitate a large number of hands on deck, time-consuming processes, operations teams working late into the night and on weekends to resolve issues, etc.
Isn’t it beneficial to the organization to have a relaxed, joyful, and contented operations team to proactively fix problems? Isn’t it an advantage rather than becoming concerned over the regularly botched deployment?
How to Measure ROI from DevOps
How do I determine the best ROI metric for calculating business cases for DevOps practices? It all depends on what’s important for your business.
As the digital transformation continues, improved business models and new ways to communicate with customers have altered value in every area.
It is critical to recognize the unique value your company gives to users and connect the metrics to achieve success.
Whether it’s lowering the time customers spend to achieve their goals or maximizing revenue per user, you should tie it directly to the investment you make in DevOps to improve important business KPIs.
Here are the steps to effectively estimate ROI for DevOps:
- Software Development Cost Calculation
Knowing the existing costs allows you to understand the savings. The process begins with an analysis of the hourly cost of developing software. The general calculation comprises multiplying a software developer’s average annual income by employer costs and benefits. Finally, increase the value by the number of working hours per year.
- Process Initiation Cost Calculation
In this computation, you assess the costs that arise during the start of the procedures. It encompasses the development process, CI/CD pipeline, data security, and, eventually, protection. With powerful automation technologies, this becomes a simple operation. To determine the genuine investment, add the costs of achieving the new automation levels using the new tools to the actual cost of these products.
- Time-Saving Calculations
The next stage is to assess the time savings that DevOps tool installation provides to enterprises. This precise computation can assist firms in determining the exact financial benefits of their business.
- Calculating Profit
This final stage will help you understand the financial benefits or monetary value of ROI from DevOps adoption. To quantify profitability, compare the time saved with the cost of implementing this technique. The annual computations result in savings for the current year as well as long-term realizations for future years.
To determine ROI percentages, use the following formula:
[(Total savings per hour – Process introduction cost) divided by Process Introduction Cost] * 100
Is There a Quick Way to Determine ROI?
Imagine you don’t have time to relax and examine all of these ROI values on your own! Since you already have the best DevOps technologies on the market to automate software development processes, you can utilize a similar method to calculate ROI.
A marketing ROI calculator will help you determine the target ROI % for DevOps. If you don’t have enough time in the day for manual computations, this new technology makes them simple and accurate. It can eliminate human errors and takes no time to recalculate or identify errors.
When your firm goes digital and beyond conventional, the complete procedure becomes faultless. DevOps provides speedier, more automated business operations to help maximize returns.
As previously noted, not every DevOps action succeeds on the first try. It is critical to inspect, measure, compare, and evaluate numbers. When you calculate ROI, you can determine whether you need to adjust your DevOps approach or plans.
If you want to spend less time learning new DevOps tools and technologies, Velan has you covered. Our services also allow you to engage skilled DevOps engineers to implement the DevOps ecosystem that you want to include in your business.