Darrell King: Why the CFO Must Care About DevOps

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Why the CFO Must Care About DevOps

Darrell King Cloud Strategist

Practitioners of DevOps, no doubt, understand well, the value that DevOps brings to an organisation. Improved operational support, faster fixes, robust processes across IT and business, automation, increased team flexibility, agility, more engaged teams, collaborative working etc. But most pertinently, DevOps, in the trenches, allows to keep the infrastructure automated and allows for code to be pushed out with a regular cadence.

DevOps teams well and truly understand the value of DevOps. But for DevOps to garner organisation-wide support, it requires executive support. In particular, it requires support from the Chief Financial Officer (CFO). If you are a DevOps practitioner, here are a few questions for you … “Does your CFO understand the value of your work?”, “Does your CFO see DevOps as a cost or an investment?”, “Are you speaking to your CFO, in financial and business language or are you speaking in DevOps speak?”.

Most pertinently, for the CFO to care about DevOps, the CFO must understand the value of DevOps, and for that the CFO needs to understand the benefits of DevOps. The language of the CFO is business-centric and finance-centric. The conversation must have a heavy focus on the wallet. The salient point here is that a DevOps practitioner must speak in the CFO’s language, and not that of DevOps. Bits and Bytes do not make the case to a CFO. Dollars and cents do. This is similar to the need for the IT function to engage with the C-Suite through leveraging business language and speak rather than IT language and speak. But just as IT professionals, and sometimes IT executives struggle to converse fluently in business-speak, so too, CFOs and financial leaders struggle to talk in IT (or DevOps) speak. Even though CFOs vary in their level of comfort with IT or DevOps speak, all CFOs care about certain matters, strongly.

In order to ensure that the CFO understands DevOps and the value it brings, leaders and practitioners in the DevOps sphere must understand deeply the role and priorities of today’s CFO.

The role of today’s CFO is significantly different from even a decade ago. CFOs are under pressure to grow revenue while cutting costs. Market pressures, a hyper-competitive environment, economic uncertainty, regulatory requirements, increased investor scrutiny etc. are putting excessive pressure on the CFOs role.

Deloitte research indicates that the CFO of today plays four rather diverse and challenging roles.

Two of the more traditional roles are that of:

  • Steward; focused on preserving the assets of the organisation by minimising risk and getting the financial books right
  • Operator; running a tight finance operation that is efficient and effective.

The evolving roles of the CFO are:

  • Strategist; Helping to shape overall strategy and direction.
  • Catalyst; Instilling a financial approach and mindset throughout the organisation to help other parts of the business perform better.

These varied roles make a CFO’s job more complex than ever.


Source: The Four Faces of the CFO, Deloitte

Regardless of the evolving role, most CFOs have one thing in common. Money. Where is it coming from? Where is it going? How is it being deployed? How much of it is being converted to resources? What is the return on it?

When it comes to DevOps, your CFO will sit in one of two frames of mind:

  • Either your CFO will understand the why of DevOps and the value it provides to your business. As such, she/he will support the DevOps play in the organisation.
  • Or, your CFO will not appreciate why DevOps is required or the value that it provides. As such, she/he will stifle even the best, most productive programs.

The questions that a DevOps practitioner must ask is “How do I explain clearly the ‘why’ of DevOps to my CFO?” And “How do I get the CFO to become a champion rather than an adversary?

The answer lies in the DevOps team’s ability to educate the CFO regarding the value that DevOps provides. And this must be done in a manner that the CFO can relate with. For this, the DevOps professionals must speak to CFO priorities, such as:

Growth

CFOs of yesteryears focused on revenue, costs and profit. The modern CFO is focused on growth; in the all-encompassing sense. Growing revenue is still a priority. Keeping costs in check, and contained, is still a priority. But how the organisation will grow, in all aspects, has now become a C-Suite mandate. So how can DevOps help with the growth mandate? How can it assist the business in a growth trajectory? Growth primarily comes from an increase in sales of existing products/services or from introducing new products/services/solutions to the market. Building better products are at the core of the DevOps mission. DevOps helps an organisation iterate rapidly to find what customers need and, in the process, selling more products in alignment with market demand. By becoming DevOps centric, organisations find what customers need and develop products/services/solutions in line with the need. It can be confidently stated that DevOps increases the probability of achieving product/market fit.

Time to Market

To compete effectively in today’s hyper-competitive market, organisations must go to market with products/services/solutions as soon as possible. They must beat the competition to market and then refine their offerings to remain relevant in the market and maintain/grow market share. To achieve this fast-paced delivery externally, businesses must deploy rapidly within, and outside their firewalls.[1] The goal is to deliver small changes rapidly so that it does not affect the entire being. DevOps enables businesses to deploy faster, and with DevOps, companies can deploy new applications, novel processes and new systems rapidly. DevOps deployment enables business operations to become more efficient. DevOps makes the process of development and deployment highly efficient and helps deliver internally in lesser time with high degrees of collaboration. It also helps reduce error rate of delivery in non-prod and prod environments. This is highly advantageous from a business perspective. It allows an improvement in timing of delivery and an improvement in delivering results. Improved time to market and improved business results is a language that all members of the C-Suite are well versed with, and ones they value.

Generating cash

Cash, even today, is a top priority for CFOs. DevOps initiatives, though challenging to correlate, can have an impact on the generation of cash in businesses. A robust DevOps program can help organisations generate cash. Examples:

● DevOps allows for new products to come to market rapidly. These products are tightly aligned to customer needs. The product-market fit leads to higher degrees of alignment between an organisation’s offering and its market, thus increasing revenue.

● DevOps enables higher product stability. When products are more stable, there are fewer customer issues and lower downtime. If an organisation by service levels, a DevOps approach allows for reduced error rates, improved delivery of service and lower rates of rework. This reduces cost from rework, increasing profitability of projects and it also reduces customer churn.


Reducing costs

Increasing revenue is an important component of the CFO mandate. Equally important is the other half of the equation, keeping the costs down. A fundamental perception of DevOps is automation. By automating tasks that are mundane and repetitive, a business can accomplish more. The automation allows for doing more with less. This reduces cost of human capital and yet increases service levels to customers. DevOps allows for a significant opportunity for IT organisations to do more with less by having resources better aligned on the most critical problems. IT organisation should walk CFOs through how investments in automation can pay off.

Improved Customer Experience (CX)

The CFO cares about the customer’s experience because CX has a direct bearing on revenues and customer lifetime value. When a business develops solutions that are proprietary, it is better able to serve its customer base. DevOps helps improve service levels of the business. Most businesses have reported an improvement in CX since implementing DevOps, which is a huge advantage for businesses. Improved CX serves to improve revenue and profits.

Stability

CFOs today focus on business stability. For a business to be stable, it needs a stable play in all aspects. Part of the mission of DevOps is to increase the stability of the infrastructure. Rapid iterations lead to consistent finetuning and as such increased reliability. If the products are more stable, customers can rely on them. This leads to increased customer loyalty and an increase consistent revenue. Another aspect of long-term stability is predictability of resources and predictability of expenses. DevOps can drive that predictability by aligning demand for solutions to the expenses. DevOps programs help deliver on a regular cadence of product. This translates into increased visibility and stability for organisations.

DevOps must communicate with the CFO as to what DevOps is and the value it brings to a business. This conversation must be had in business/finance speak. If the CFO is to support the DevOps play in an organisation, IT/DevOps leaders must communicate with the CFO around the CFO’s area of concerns. Incorporating themes such as cash, expenses, growth, and stability must be the pillars of the conversation.

At PolarSeven, we are well versed with this conversation.

We can help your organisations in several ways:

Commercial pricing

We can help you understand complex future Opex pricing models for budget forecasting. We can help compare the ROI of upfront Capex projects with the longer-term Opex environment. For instance, if a client’s current AWS bill has doubled, we can help navigate what is being consumed. We can help apply budget alarms and notifications to keep on top of it.

People & Culture

We can help augment the DevOps talent in your organisation and cross skill during the project to ensure you are self-sufficient. While DevOps is technically driven, we can help the CFO understand the business impact of DevOps. Managed DevOps eliminates the burden of hiring and retaining an in-house team. We can help provide you with that cover.

P7 Managed

We work with you on active cost management to reduce your AWS bill. We provide you immediate access to top AWS Certified DevOps professionals who understand scaling up to achieve business outcomes but also scaling down to reduce costs. We provide the resources and the expertise so that you have the time to focus on what matters most – Your Business.

If you’re looking to improve your DevOps play, reach out to us at PolarSeven. Allow us to either augment your DevOps play or introduce DevOps into your organisation.

 

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