DevOps ROI: Why it Matters & How to Measure

DevOps return on investment (ROI) refers to the extra value that DevOps creates, after implementation costs have been deducted. It measures the actual impact DevOps is having on your organization in business terms.

To understand ROI, think about what happens if you start paying for many new CI/CD, IaC, and observability tools. Not only will each subscription incur a monthly bill, but it’ll also require developer time to configure and maintain the solution. 

If those platforms are not used on a daily basis, or they don’t have the expected effects on your development process, you’re just spending money on shiny tools. This delivers poor ROI.

Conversely, high-performing DevOps strategies exhibit excellent ROI. From a relatively small initial investment, they contribute lasting real-world improvements to your software delivery workflow. 

For instance, taking a week to implement an IaC pipeline could let you eliminate manual infrastructure provisioning tasks. In turn, this may free up ops teams to fulfill other roles, allow developers to self-serve their own environments, and help reduce downtime due to misconfigured infrastructure. 

Over time, the payoff from that one week of upfront work accumulates to create a hugely positive ROI on DevOps investments.

Factors affecting DevOps ROI

Your own DevOps ROI will always be influenced by many different factors. These vary from team to team, but some of the main influences include:

• The cost of implementing DevOps processes: Systems that are complex to implement or that require expensive commercial software licences will take longer to produce a positive ROI.
• Your ability to increase deployment frequency: DevOps systems that increase deployment frequency are more likely to improve ROI because you can then ship value to your customers more quickly.
• The impact of any customer satisfaction improvements: Changes that affect customer outcomes, such as enhancing software quality through increased use of automated testing, may improve your user retention and acquisition rates, boosting business growth.
• The effects of reduced downtime and quicker incident recovery: Introducing automated systems that prevent errors and enable faster incident response lets you avoid costly failures in production. This leads to a healthy ROI.
• Whether DevOps reduces your time-to-market: DevOps is ultimately intended to reduce the time it takes to deliver changes, helping you get to market faster. This can give you a crucial competitive edge. Investing in DevOps systems that let you outperform your competitors can yield substantial = returns, compared with retaining cheaper legacy processes that leave you behind the curve.

Each of these factors links to a common theme: Achieving good DevOps ROI requires changes to the toolchain, processes, and culture to exhibit meaningful improvements in your organization. 

If DevOps systems don’t help you meet your business KPIs, then your ROI will inevitably be poor. Beyond this basic requirement, maximizing ROI also requires selecting the most cost-effective DevOps solutions that are easy to configure and maintain.

Measuring ROI involves DevOps performance metrics, including deployment frequency, and business KPIs, such as growth in active users. 

Linking changes in these values enables you to understand how DevOps is affecting business outcomes, allowing you to determine whether the return on investment is positive.

Mathematically, net DevOps ROI is the value of the total gain from DevOps minus the cost of achieving that gain:

Net gain = gain − cost

To calculate DevOps ROI relative to the investment, use:

ROI = (gain − cost) ÷ cost

You can also express ROI in percentage terms:

ROI (%) = ((gain − cost) / cost) × 100 

Note that “gain” typically refers to the measurable value delivered (e.g., increased revenue, cost savings), and “cost” includes all implementation, tool, and personnel expenses.

For example, you may spend $50,000 implementing new DevOps processes that let you improve your development efficiency. If you then save $150,000 in costs over the next year, your DevOps ROI is $100,000. This is a 200% return on your initial investment.

In practice, DevOps ROI is rarely determined using a purely mathematical calculation. Most teams struggle to quantify exactly how much value they receive from DevOps. 

However, you can usually get somewhere close to your actual ROI by estimating how much development time your DevOps systems save. You can then layer in other measurable business outcomes, such as the impact of any extra sales made by reducing your change lead time or increasing deployment frequency.

Nonetheless, DevOps also creates qualitative workflow improvements that cannot be directly measured. 

Modern tools, improved training, and perceived productivity improvements can help increase developer satisfaction, for example. This effect may not be directly reflected in your metrics, but it should still be acknowledged when considering the overall return on your investment. Happier, well-equipped devs will generally create better results down the line.

To summarize, the main steps towards measuring DevOps ROI are as follows:

Step 1: Understand your current position: Identify the metrics you’ll use to measure ROI, then establish your current performance baseline.

Step 2: Implement DevOps changes: Introduce new DevOps tools and processes to improve your workflows.

Step 3: Use metrics to assess your quantitative ROI: Metrics such as deployment frequency, error rates, change lead time, and infrastructure spending allow you to quantify the ROI your DevOps systems creates. You can usually map these values back to cost savings, but remember to deduct the cost of implementing your DevOps improvements.

Step 4: Account for qualitative DevOps enhancements: Consult with developers to discover the hidden benefits of DevOps, such as more reliable day-to-day workflows or improved ability to focus on meaningful tasks.

With the basic components of DevOps ROI now established, let’s take a closer look at some of the metrics that can reveal your performance.

How to improve DevOps ROI: Key DevOps performance metrics

As discussed above, accurate quantitative metrics play an essential role in enabling you to measure DevOps ROI. While the metrics to use should be based on your own business priorities, several popular benchmarks are common to most organizations. 

The four DORA metrics are often good indicators of DevOps ROI:

DORA is a popular standard for measuring DevOps performance, but there are plenty more metrics that also reveal your ROI. Here are a few others to consider:

You can find more suggestions in our guide to DevOps metrics. But it’s important to recognize that ROI is ultimately about business outcomes, so you must link development activity to your organization’s KPIs. 

Whether you prioritize sales targets, user growth, or uptime, achieving a good DevOps ROI depends on your ability to drive improvements to these values. It’s important to consider a comprehensive range of metrics holistically, so you can accurately determine whether changes are due to DevOps improvements or to other factors.

From the sections above, you should see that DevOps performance metrics provide the foundation for assessing ROI. However, many teams struggle to accurately assess ROI in practice. The effects of DevOps systems aren’t always directly apparent on your financial balance sheet, while the impacts of large changes can take time to appear.

Here are some of the challenges you may face when measuring your DevOps ROI:

• Missing or incomplete data: The bane of any DevOps monitoring strategy, incomplete data can mask your true ROI and lead to incorrect conclusions. Before attempting to measure ROI,ensure you can track your KPIs and DevOps objectives using discrete metrics such as deployment frequency, change lead time, or application availability.
• Time lag before new changes generate positive ROI: ROI is a value that changes over time: the longer a system is used, the higher its ROI will be. You’re getting a greater return from the same initial investment.
  
  This effect means you’ll inevitably collect inaccurate data if you try to measure ROI too soon after introducing new changes. The true picture only emerges once the system’s settled into a pattern of long-term usage.
• Inaccurately crediting DevOps for business improvements: It’s not always clear whether DevOps is actually responsible for the changes in your business KPIs. A reduction in errors could be due to other factors, such as reduced user activity or fixing a specific long-running infrastructure issue, for example.
  
  Similarly, increased development output might be due to team members simply gaining experience, rather than being specifically linked to DevOps. To identify which it is, you need to holistically assess your data across DevOps performance, productivity, and ROI, as well as human factors, such as how motivated team members are feeling.
• Difficulty accounting for the intangible effects of DevOps: High-performing DevOps teams often state their true return on investment is more than just KPI improvements. For instance, developers usually find tasks become easier and more fulfilling when they’re not grappling with manual processes.
  
  Relatively small changes may not produce a transformative ROI on paper, but they can have huge benefits for developer well-being. This aspect shouldn’t be forgotten when deciding whether DevOps is worth pursuing.

To address these issues, ensure you’ve clearly defined your business KPIs and DevOps aims. For instance, if user growth is your top KPI, then positive ROI ultimately depends on DevOps optimizations attracting new users to your platform.

Once you know what you’re aiming for, you can identify the specific metrics for measuring success. 

For the example above, you’d want to examine how user growth changes in your platform after you make changes to your software delivery workflows. But, because the effects may take time to appear, you should always make assessments over an extended time period — think weeks or months, rather than days. This allows you to see whether jumps in the data are merely flukes or established trends that began after you made the change.

Ready to begin measuring your DevOps ROI? Here are five best practices to keep in mind as you get started. These tips will increase your ROI and improve measurement accuracy.

1. Be clear about your DevOps and business aims

ROI is the impact DevOps has on your business. If you don’t know what your business is aiming for, then attempts to measure ROI will be meaningless. Using KPIs such as deployment frequency, customer acquisition rates, and DevOps spending is key to making accurate ROI assessments.

2. Implement robust observability tools

ROI measurements depend on precise metrics that let you chart your DevOps results. Embed observability tools within your workflows to capture this data as you work. For instance, you could use GitHub’s repository insights to monitor development output, or use Prometheus and Spacelift to track your infrastructure deployments.

3. Make DevOps ROI measurements easily accessible

Data’s only useful when it’s accessible, so you should ensure your metrics are readily available to your stakeholders. ROI data may feel like it’s only relevant to business execs, but in fact it’s often helpful to open access to all stakeholder groups. 

This allows developers, operators, and other teams to evaluate the impact of DevOps adoption on the business. It can improve morale and encourage team members to accept the new processes being used.

4. Discontinue unsuccessful DevOps tools and processes

Not every DevOps system will necessarily succeed. It makes sense to first try iterating on tools and processes that aren’t working, but sometimes this goes too far. 

Trying to fix a failing change can become a waste of time, money, and energy. It erodes your DevOps ROI by not adding anything useful to your business. Knowing when to stop using these inefficient systems is a crucial part of ROI optimization.

5. Regularly review your DevOps metrics to drive ROI improvements

DevOps ROI doesn’t stand still. If your DevOps processes are running optimally, then ROI should improve over time. But it’s more likely there’ll be ups and downs as you change your development processes and reassess priorities. 

Keeping an eye on DevOps metrics and business KPIs allows you to check that ROI is heading in the right direction. For instance, you may find new changes actually reduce productivity and increase change lead times. This would harm your ROI if left unchecked.

Spacelift is an IaC management platform that helps you implement DevOps best practices. Spacelift provides a dependable CI/CD layer for infrastructure tools, including OpenTofu, Terraform, Pulumi, Kubernetes, Ansible, and more, letting you automate your IaC delivery workflows.

The platform enhances collaboration among DevOps teams, streamlines workflow management, and enforces governance across all infrastructure deployments. Spacelift’s dashboard provides visibility into the state of your infrastructure, enabling real-time monitoring and decision-making, and it can also detect and remediate drift.

You can leverage your favorite VCS (GitHub/GitLab/Bitbucket/Azure DevOps), and executing multi-IaC workflows is a question of simply implementing dependencies and sharing outputs between your configurations.

With Spacelift, you get:

• Policies to control what kind of resources engineers can create, what parameters they can have, how many approvals you need for a run, what kind of task you execute, what happens when a pull request is open, and where to send your notifications
• Stack dependencies to build multi-infrastructure automation workflows with dependencies, having the ability to build a workflow that, for example, generates your EC2 instances using Terraform and combines it with Ansible to configure them
• Self-service infrastructure via Blueprints, enabling your developers to do what matters – developing application code while not sacrificing control
• Creature comforts such as contexts (reusable containers for your environment variables, files, and hooks), and the ability to run arbitrary code
• Drift detection and optional remediation

Do you plan to implement DevOps in your organization? Or maybe you are seeking ways to improve your processes? Book a demo with our engineering team to discuss your options in more detail.

Your DevOps return on investment (ROI) is the impact that your DevOps initiatives have on your organization, after accounting for the additional costs they create. 

An effective DevOps implementation should deliver positive ROI compared with your historical performance. It means your investment in new tools, processes, and training is paying off in improved business outcomes, such as faster time-to-market or increased customer satisfaction.

Regularly measuring your DevOps ROI allows you to keep your DevOps strategy on target. Tracking the metrics and KPIs we’ve discussed in this article enables you to verify your DevOps systems are actually contributing to your organization. 

You can then iterate on any weaknesses to optimize your ROI. Don’t be afraid to abandon things that aren’t working: continuing to invest in projects that aren’t helping you achieve your business aims will hinder productivity and reduce your returns.

Finally, remember that DevOps ROI is closely coupled with your overall DevOps maturity. If you’re just starting out with DevOps, your ROI could be relatively low as you experiment with new ways of working. This is normal in the early stages, but you should closely monitor your metrics to check you’re on track. You can then iterate on your strategy to gradually improve your ROI. One of the features of ROI is its ability to compound over time: If you stick with your strategy long enough, it will generate ever-increasing returns from your initial investment.