The Business Bits of Web Operations

Web operations and development have formed a unified front of the last few years. Those fluent in the field understand devops and some of the business reasons for walking this path. In this talk, I'll discuss some of the business operations you should add to the mix to drive a better value for your organization.

Transcript

1. / The business bits of Web Operations a primer
2. You know that place that pays your salary. Business bits?
3. Businesses provide value to a market…
 value: services, products, etc.
 markets: other businesses or people.
4. Businesses have costs while the statement is obvious,
 the details can be quite complex.
5. Businesses make money most businesses are for profit
 and the value of business itself goes to shareholders. An aside on non-profits and governments…
 they are no different, just think of the shareholders as
 charities or constituencies
6. Businesses have goals lots of little goals, some big goals… but all goals add up to maximizing shareholder value. … before you go attack corporate greed,
 remember shareholders may value something other that money. (most do not)
7. Your Job is to enable the business to achieve its goals the best way you can
8. Your Job : ⇗ shareholder value sometimes that’s not so clear or true. your job could be to guard against the erosion of shareholder value
9. ROI : return on investment Simply, this is the £/€/$ you make for every £/€/$ you spend. Consider the law of diminishing returns.
10. TCO : total cost of ownership Total costs, these can be surprising. Finite. Should never be super-linear with respect to growth. Will never be zero.
11. TCO vs. ROI You don’t want to have a TCO argument
 if you can have an ROI argument Why?
12. Money terms… Count du Monet
13. Revenue how much money comes in
14. Expenses how much money goes out this includes a lot of things that people should consider separately
15. Earnings = Revenue - Expenses This is the bottom line. But it isn’t that simple
16. Expenses : COGS cost of good sold this is how much it cost your business for the inventory item sold this doesn’t apply to companies providing services.
17. Expenses : interest money owed on debts outstanding
18. Expenses : taxes turns out you can’t stick it to the man
19. Expenses : depreciation the things you have this year are not as valuable as they were last year
20. Expenses : amortization the spreading of monies over time
21. EBITDA Earnings…before Interest, Taxes, Depreciation and Amortization Why is this number useful?
22. P&L : profit and loss why is it not profit or loss? can you have both at the same time? it helps to break things out into pieces
 to understand what is working and what is not
23. Budget a budget is nothing more than a money plan… money in money out and how they are tied.
24. CAPEX Capital Expenditure
25. OPEX Operating Expenditure
26. CAPEX vs. OPEX this could be a multi-day discussion
27. Web Operations Enables businesses on the web. Costs a lot of money. Can increase returns.
28. Putting this to work First and foremost… you cannot improve what you cannot measure.
29. Diving into expenses: people “Human Capital Management” - Horribly unflattering, eh? salary • bonus • benefits
 administrative overhead
 recruitment • continuing education
 office space • supplies Guesstimation: 2x salary Do some practice math with contractor vs. employee.
30. Tracking people One of the most valuable things you can track in your organization
 is what people do. People tend to hate this. Engineers lie (to themselves) about how long they spend on things. This misleads the organization w.r.t. how much efforts cost.
31. Expenses: architecture The software you deploy bought (free or not, open or not). Human capital is required to operate it.
32. Expenses: infrastructure Data centers, systems, networks (virtual or real) that run your software. Human capital is required to operate it. This is not software developed in-house.
33. What about open source? This is still challenging to model. Building things in-house is an investment… If the resulting intellectual output isn’t property/assets, what is it? …expense.
34. The Cloud Let’s test our budgeting skills… TO EXCEL!
35. Think like an MBA Does what you are doing add more value
 than anything else you could be doing? You are in a unique position to truly understand value and risk. The bigger the company, the more we think about risk.
36. Risk and liabilities Liabilities are debts and financial obligations. Risk is simply financial exposure to loss. Risks and liabilities are not avoided, they are managed. Technical debt is a wickedly complex subject;
 it is not real debt in accounting terms (for a reason).
37. Risk: vendor lock in This goes for hardware, datacenter, SaaS, PaaS, IaaS, etc.
38. Derisk: vendor lock in Prefer replaceable components
39. Risk: knowledge loss Losing employees with unique knowledge of corporate assets
40. Derisk: knowledge loss Require as an artifact of work performed Prefer automation
41. Risk: schedule delays Both in development and deployment.
42. Derisk: schedule delays Project managers in general can • enable teams • communicate with stake holders • and general control risk in projects
43. Risk: operational failure Your shit is busted. It doesn’t work. It doesn’t scale.
44. Derisk: operational failure Test your shit: deployment • functional • load • security ! Perform game day failure exercises. Perform game day security release exercises.
45. Three basic traits of awesome: Amplifying return on investment. Controlling risk in projects. Reducing total cost of ownership.
46. Cheers