{"id":11295,"date":"2022-01-18T19:10:11","date_gmt":"2022-01-19T01:10:11","guid":{"rendered":"https:\/\/threecloud.wpengine.com\/?p=11295"},"modified":"2023-11-22T08:55:11","modified_gmt":"2023-11-22T16:55:11","slug":"getting-real-roi-return-on-investment-on-alm","status":"publish","type":"post","link":"https:\/\/3cloudsolutions.com\/resources\/getting-real-roi-return-on-investment-on-alm\/","title":{"rendered":"Getting Real ROI (return on investment) on ALM"},"content":{"rendered":"<p>As you come into work on a Monday, you find your team is about to start down a path whereby they are going to commit to significant architectural refactoring of the application. You talk to the senior developer and ask \u201cwhy?\u201d The answer you hear back is unsatisfying as it is obscure. Phrases such as \u201cseparations of concerns\u201d and \u201csingle responsibility principal\u201d are mentioned faster than you can actually drink your first cup of coffee. Scenarios like this happen every day. How do you validate that this is the right thing to do or not?<\/p>\n<p>We founded 3Cloud because we were (and still are very) passionate about making the IT landscape a better place. We help our customers by providing advice, implementation, and knowledge transfer on the principals that help an IT team\/organization be successful. As part of that process, we like to listen to our customers and truly understand how they are getting their work done before we set out to help any change. For us, we call that the \u201cAssessment.\u201d<\/p>\n<p>An ALM Assessment is meant to (1) understand the current situation (2) identify any really good practices that can be built upon (3) find out any areas of investment that may result in increased maturity\/success for that team(s). As part of the results, which do vary based upon immediate and longer-term needs \u2013 a roadmap can be created which consist of modifications to process, tools, and practices\/people which should improve things. Most carefully, managers should take those assessments and apply an ROI paradigm to them. Questions like \u201cWhich of the following improvements should have a real positive ROI?\u201d or \u201cWhich ones have the highest?\u201d come to mind, and they should.<\/p>\n<p>As an example, if it\u2019s recommended that the team should adopt automated build or deployments, <em>how much<\/em> will this improve my team? As a suggestion, I\u2019d recommend consider what the ROI on automated deployment might actually be. To get there, you can take a high level view on what the ROI should be \u2013 and then just like good computer scientists, divide-and-conquer that problem.<\/p>\n<ul>\n<li>ROI = (Gain from Investment \u2013 Cost of Investment) \/ Cost of Investment<\/li>\n<\/ul>\n<p>Implementing automated build and deployment can be estimated and priced. The gain from doing so is more difficult because it represents the removal of the cost of doing it the \u201cold way.\u201d<\/p>\n<ul>\n<li>Gain = <span style=\"color: red;\">Cost of Manually Building Today <\/span>+ <span style=\"color: #0070c0;\">Cost of Outages from Manual Process<\/span><\/li>\n<li>Gain = <span style=\"color: red;\">Cost of Single Manual Build * Frequency <\/span>+ <span style=\"color: #0070c0;\">Cost of Outages<\/span><\/li>\n<li>Gain = <span style=\"color: red;\">Hourly Salary * Duration of Single Manual Build * Frequency <\/span>+ <span style=\"color: #0070c0;\">Lost Revenue * Probability of Outages<\/span><\/li>\n<\/ul>\n<p>An example of ROI over simplified \u2013 for a single year.<\/p>\n<ul>\n<li>ROI = (40K \u2013 10K) \/ 10K = 3.0<\/li>\n<\/ul>\n<p>If we spend 10K to remove 40K of costs to our company. This is a win. Should we do this first?<\/p>\n<p>Maybe \u2013 it depends where this stacks up against other initiatives within the IT organization. Perhaps better requirement analysis or superior unit testing might have significant gains to the organization. <em>One major point here<\/em> is \u2013 it is very hard to feel like this is an exact science because some of the practices mentioned within this article are tough to quantify benefits. When doing an exercise such as this, keep in mind that no matter what \u2013 this is an estimate and not actual. So the first challenge is figuring out what your variables are, and then putting in <em>assumptions<\/em> in for them.<\/p>\n<p>This exercise, I believe, is an important one. Unfortunately, few think about this in real practical terms. Phrases that truly are poor substitutes for this are that we all hear: \u201cIt\u2019s faster\u201d \u201cIt\u2019s newer\u201d \u201cIt\u2019s more integrated.\u201d They are good positioning statements, but ROI in your organization should start with these, not end with these.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As you come into work on a Monday, you find your team is about to&mldr;<\/p>\n","protected":false},"author":21,"featured_media":11333,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[381,292],"tags":[385],"class_list":["post-11295","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-app-experience","category-app-innovation","tag-devops","topics-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/posts\/11295","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/comments?post=11295"}],"version-history":[{"count":0,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/posts\/11295\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/media\/11333"}],"wp:attachment":[{"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/media?parent=11295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/categories?post=11295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/tags?post=11295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}