operations as a strategic weapon

Operations is a Strategic Weapon

Saturday, September 24, 2011

Gene’s talk was teaching you about what you should be doing... I’m going to be talking about another part of career advancement (or preservation in some cases) getting the business to understand why what we do is important and why they should fund these projects

IT Operations has been suddenly thrust into the spotlight with the rise of web and now the cloud... or as Theo Schlossnagel says the “Web changed everything... cloud made us realize it”... so now that the business is aware we exist... are we going to seize the moment or get passed by those who do?

Spock ScottyLittle bit weird

Sits closer to the bossThinks too hard

Pulls levers & turns knobsEasily excitedYells a lot in emergencies

John Allspaw and Paul Hammond, Velocity 2009


DTO Solutions


We do process improvement and automated infrastructure for companies who build and operate revenue producing services... e-commerce, financial services, gamingWe started asking ourselves some questions about our clients and our work for them

When did they call?


When did they call?

A. First signs of issues brewing

B. Initial negative impact felt by some

C. Heads are on fire


When did they call?

A. First signs of issues brewing

B. Initial negative impact felt by some

C. Heads are on fire65%

30%

10%


Why did they wait?

#1 Answer:


Aside from human nature to procrastinate?translation... “you and or the problem you are telling me about isn’t worth the money”

Why did they wait?

#1 Answer:

“Couldn’t get budget approval or business support”


Aside from human nature to procrastinate?translation... “you and or the problem you are telling me about isn’t worth the money”

Operations has a perception problem



Necessary Cost

Business View



Necessary Cost

Business View

vs

Strategic Weapon

Ops View


What does this have to do with you?


Ok so the biz folks don’t appreciate us.. so what else is new... why should I care?We’ll unless this is hobby... it has everything to do with you?Especially considering that larger portions of companies budget is going to IT... especially for anywhere that the people in this room would work.

First Law of Business Spending

Things that cost you money

Things that make you money


Make no mistake about it... someone is spending money on you... and they are asking themselves... do I cut it, outsource it, or spend more on it.

Change the Perception of Ops

Necessary Cost

vs

Strategic Weapon


Textbook definition of operations:

“Operations is all of the activities that a firm conducts in order to deliver value to its customers.

It's the set of processes that transforms either materials or information into a product or service.”

-David UptonChair of Operations ManagementOxford University


Sounds important... necessary... but is it strategic weapon? can you use it offensively to beat your competition?Language is important so lets see what business describes as operations.Delivering valuetransforming ideas into services that make you moneywrite all the software you want... have all the ideas you want... you don’t deliver it through a working service you have no business

Operations becomes a strategic weapon


If we are going to make the business case that operations is a strategic weapon... and we need to do it in language that they understand.Business care about innovation (ideas that resonnate with customers) and getting the best return on their money... Let’s look at the first point... continuously increasing velocity of innovation


When you are continuously...




1. Increasing velocity of innovation






2. Increasing return on investment




Ah-ha!

Result


Core process of any business

Ah-ha!Ka-ching!


Now of course you hope that result is one that resonates with customers

Ah-ha!


But for many reasons it more often than not goes the other way

Day 0 Day n

Velocity of Innovation...

Ah-ha!Ka-ching!


That cycle time... getting from idea to result is one of the most critical metrics for both a startup and an established service. And the bulk of this time is spent in the application lifecycle across dev, QA, and operations.

Companies were able to achieve somewhat defensible positions based on technology...


Companies were able to achieve somewhat defensible positions based on technology... then came the web


Then along came this thing called the web and screwed it all up... now your customers are coming to you through a standard interface --the browser-- over standard published protocols. You competition is only a few keystrokes away. The even applies in newer distribution channels like mobile apps and their app stores.

How do we compete now?


So how do we compete in this commoditized world? 1. Scale... scale of users, scale of data, scale of compute power2. Velocity of innovation... how fast can you react to and execute on new market forces or opportunities.

Scaling is the most straight forward problem to solve. It’s a known problem with a lot of known solutions to borrow from. Hire smart architects... let them follow best practices... throw a big pile of cash at it and there aren’t many scaling problems you can’t solve. Obviously that’s somewhat of a simplification... but I’ll let someone else’s presentation get into the details

1. Scale





1. Scale

2. Velocity of Innovation





Ah-ha!Ka-ching!

Ah-ha!

Innovation is really a numbers game...


The global innovation success rate across all geographies and industries

4%*

94%*

*Study by Doblin Innovation Consultants

Ah-ha!Ka-ching!

Ah-ha!

Innovation is really a numbers game...


The global innovation success rate across all geographies and industries

Ah-ha!

Ah-ha!

Result

Result

Ah-ha!

Result

Ah-ha!

Result

Ah-ha!

Result

How to win a numbers game...

Company A

Company B


Put it this way... if in the time it takes you to get through one cycle, your competitor can get through 4... who do you think will be more competitive??

Ah-ha!

Ah-ha!

Result

Result

Ah-ha!

Result

Ah-ha!

Result

Ah-ha!

Result

How to win a numbers game...

Company A

Company B


This is why the notion of a “burn rate” is a meaningless statistic. Say you have enough cash in the bank to pay for x number of months. That doesn’t tell you anything... do you have 10 shots at making customers happy or just 1? Think about it like a carnival game. If you have ten balls to throw at the target and someone else only has 1... who has a better probability of success?

How fast can ops move?

• Production deployment every 11.6 seconds (weekday)

• 1,079 deployments in one hour (record)

• ~0.001% of deployments actually cause an outage

http://news.ycombinator.com/item?id=2971521


Jon Jenkins at VelocityOps is amazon’s strategic weapon... their books aren’t better, their storage isn’t better, their hypervisor isn’t better.Everyone copies them but their just keep rolling out features and lowering costs faster than their competitors can do either



Business is already thinking about this...

Customer Development Model


But can the biz move fast enough? They already are wanting to do soCustomer Development



2. Improving return on investment




Return on investment is different than just reducing costBut what about for enterprises... 70% is spent on maintaining existing services... only 30% on new project

Anti-patterns to success...

• Misalignment of incentives

• Latent demand that’s not being met

• Overlooked non-functional requirements

• Mismatched processes

• Mismatched tooling

• Lacking metrics about process

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Warning signs...

• Bottlenecks

• Wait time

• Unreliable procedures

• Conflict (active or passive)

• Limited visibility or measurement

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@damonedwards

[email protected]

Let’s Talk....


We do this stuff all day long for a lot of large and cutting edge clients... and we love talking about DevOps so drop me a line anytime if you want to talk

mailto:[email protected]


@damonedwards dev2ops.org

[email protected]

Let’s Talk....


We do this stuff all day long for a lot of large and cutting edge clients... and we love talking about DevOps so drop me a line anytime if you want to talk



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I also do a podcast with the famous cloud and IT management guru john willis.Interview based series where we talk to all kinds of movers and shakers across the development and operation spectrum.

Between DTO and doing the devops cafe content I get to talk to a lot of companies and see what’s working and what isn’t working.

operations as a strategic weapon

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