Quantifying the Financial Benefits
It is free to use the Agile Cloud Manager for commercial projects, as long as you abide by the terms of the license. But you will need to devote engineering resources to implementing the Agile Cloud Manager, so this article will discuss how to get a budget for engineering projects.
Business Case Step Within Governance Process
Your governance process can include a step at which business cases are developed to assess the financial benefit that could be derived from each implementation of the Agile Cloud Manager within your organization.
Each business case can take the form of a spreadsheet comparing financial cost line items between the present state of using existing systems versus the future state of using the Agile Cloud Manager for each system.
Business case development is a cross-functional process that engages people in multiple departments including finance, architecture, engineering, and others.
Components of Business Cases
The components of business cases are specific to each unique organization, but as a starting point, your cross-functional teams can use the following line items to begin to quantify the ongoing financial costs before and after migrating each type of service and system into orchestration by the Agile Cloud Manager:
- Reduced infrastructure development costs.
- One parameterized software-definition of the system with the Agile Cloud Manager compared to having many redundant definitions of the system in different implementations across the company.
- Reduced software development costs.
- Easily cloned versions of systems and environments available to be spun up and torn down again and again throughout the development process.
- Reduced patching and maintenance costs due to:
- Standardization across the enterprise.
- Automation of standardized processes.
- Reduced downtime of systems.
- Faster ongoing improvements to software definitions which result from focusing infrastructure engineering teams on continually improving reusable system-definitions instead of trying to maintain many redundancies.
- Reduced cloud provider bills.
- Ability to failover and fail back between different cloud providers instead of having systems locked-in to each cloud provider.
- It might be easier to negotiate lower prices from each cloud provider if you are truly able to migrate all your workloads out of their networks whenever you want to as part of your day-to-day operations.
- Other financial metrics that result from your discovery process.
Your process for evaluating business cases will include unique line items that are specific to your organization and will evolve over time. But the above bullet points can be a starting point as you start to assess the financial benefits.
Hypothetical Example
A hypothetical example of building a business case might be as follows:
If your organization currently has five implementations of a specific type of storage service, you might reduce that to two re-usable software-definitions of the same storage service orchestrated by the Agile Cloud Manager. Each of your two remaining software definitions might be dedicated to a specific different cloud provider, such as having an AWS definition and an Azure definition.
Your organization might have hundreds of implementations of a given type of service, but this is intended to be a simplified example.
The financial impact of consolidating five implementations into two software definitions might be quantified as follows:
- A basic cost of creating, operating, and maintaining each type of service would remain for the two software definitions into which the 5 pre-existing implementations would be distilled.
- This line item might be 2/5 or 40% of the current cost level.
- In addition, the 3 other pre-existing implementations that are not accounted for with 100% of pre-existing costs in the preceding bullet will still have a basic level of ongoing engineering requirements necessary to support the teams that use the resulting infrastructure, even after the redundancies have been eliminated.
- This basic level of ongoing engineering might be 50% of the current amount after redundancies have been eliminated.
- This line item might then be 30% of the current cost level, calculated as 50% times 3/5 of the pre-existing implementations.
- 30% reduction in engineering costs might result from implementing the Agile Cloud Manager in this hypothetical use case.
- Because 40% from the first bullet above added to 30% from the second bullet above gives 70% of the current expenditure level that would be required to orchestrate the same type of service in your organization by using the Agile Cloud Manager compared to current methods.
We recommend reallocating saved engineering costs to redeploy the same engineers to work on new projects that can increase the organization’s agility and accelerate the company’s growth.
A 30% increase in productivity in your IT organization on a cash-over-cash basis could therefore result from implementing the Agile Cloud Manager for each use case in the hypothetical example given above.
Estimating Organization-Wide Financial Benefits
The total extent of benefit for your organization could be estimated as follows:
- First by examining the costs of all the systems that your organization currently manages.
- Then by comparing those pre-existing costs with the reduced costs that can result from using the Agile Cloud Manager to eliminate redundancies by orchestrating a smaller number of reusable software definitions of all your pre-existing systems.
How much would a 10% increase in the overall productivity of your IT organization be worth?
How much would a 20% increase in the overall productivity of your IT organization be worth?
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