Operations as a Strategic Weapon

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Operations as a Strategic Weapon

  1. 1. Operations is a Strategic WeaponSaturday, September 24, 2011Gene’s talk was teaching you about what you should be doing... I’m going to be talking aboutanother part of career advancement (or preservation in some cases) getting the business tounderstand why what we do is important and why they should fund these projectsIT Operations has been suddenly thrust into the spotlight with the rise of web and now thecloud... or as Theo Schlossnagel says the “Web changed everything... cloud made us realizeit”... so now that the business is aware we exist... are we going to seize the moment or getpassed by those who do?
  2. 2. Spock Scotty Little bit weird Pulls levers & turns knobs Sits closer to the boss Easily excited Thinks too hard Yells a lot in emergencies John Allspaw and Paul Hammond, Velocity 2009Saturday, September 24, 2011
  3. 3. DTO SolutionsSaturday, September 24, 2011We do process improvement and automated infrastructure for companies who build andoperate revenue producing services... e-commerce, financial services, gamingWe started asking ourselves some questions about our clients and our work for them
  4. 4. When did they call?Saturday, September 24, 2011
  5. 5. When did they call? A. First signs of issues brewing B. Initial negative impact felt by some C. Heads are on fireSaturday, September 24, 2011
  6. 6. When did they call? 10% A. First signs of issues brewing 30% B. Initial negative impact felt by some 65% C. Heads are on fireSaturday, September 24, 2011
  7. 7. Why did they wait? #1 Answer:Saturday, September 24, 2011Aside from human nature to procrastinate?translation... “you and or the problem you are telling me about isn’t worth the money”
  8. 8. Why did they wait? #1 Answer: “Couldn’t get budget approval or business support”Saturday, September 24, 2011Aside from human nature to procrastinate?translation... “you and or the problem you are telling me about isn’t worth the money”
  9. 9. Operations has a perception problemSaturday, September 24, 2011
  10. 10. Operations has a perception problem Business View Necessary CostSaturday, September 24, 2011
  11. 11. Operations has a perception problem Business View Ops View vs Necessary Cost Strategic WeaponSaturday, September 24, 2011
  12. 12. What does this have to do with you?Saturday, September 24, 2011Ok 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 foranywhere that the people in this room would work.
  13. 13. First Law of Business Spending Things that Things that cost you money make you moneySaturday, September 24, 2011Make no mistake about it... someone is spending money on you... and they are askingthemselves... do I cut it, outsource it, or spend more on it.
  14. 14. Change the Perception of Ops vs Necessary Cost Strategic WeaponSaturday, September 24, 2011
  15. 15. Textbook definition of operations: “Operations is all of the activities that a firm conducts in order to deliver value to its customers. Its the set of processes that transforms either materials or information into a product or service.” -David Upton Chair of Operations Management Oxford UniversitySaturday, September 24, 2011Sounds important... necessary... but is it strategic weapon? can you use it offensively to beatyour 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 aworking service you have no business
  16. 16. Operations becomes a strategic weaponSaturday, September 24, 2011If we are going to make the business case that operations is a strategic weapon... and weneed to do it in language that they understand.Business care about innovation (ideas that resonnate with customers) and getting the bestreturn on their money... Let’s look at the first point... continuously increasing velocity ofinnovation
  17. 17. Operations becomes a strategic weapon When you are continuously...Saturday, September 24, 2011If we are going to make the business case that operations is a strategic weapon... and weneed to do it in language that they understand.Business care about innovation (ideas that resonnate with customers) and getting the bestreturn on their money... Let’s look at the first point... continuously increasing velocity ofinnovation
  18. 18. Operations becomes a strategic weapon When you are continuously... 1. Increasing velocity of innovationSaturday, September 24, 2011If we are going to make the business case that operations is a strategic weapon... and weneed to do it in language that they understand.Business care about innovation (ideas that resonnate with customers) and getting the bestreturn on their money... Let’s look at the first point... continuously increasing velocity ofinnovation
  19. 19. Operations becomes a strategic weapon When you are continuously... 1. Increasing velocity of innovation 2. Increasing return on investmentSaturday, September 24, 2011If we are going to make the business case that operations is a strategic weapon... and weneed to do it in language that they understand.Business care about innovation (ideas that resonnate with customers) and getting the bestreturn on their money... Let’s look at the first point... continuously increasing velocity ofinnovation
  20. 20. Result Ah-ha!Saturday, September 24, 2011Core process of any business
  21. 21. Ah-ha! Ka-ching!Saturday, September 24, 2011Now of course you hope that result is one that resonates with customers
  22. 22. Ah-ha!Saturday, September 24, 2011But for many reasons it more often than not goes the other way
  23. 23. Velocity of Innovation... Ah-ha! Ka-ching! Day 0 Day nSaturday, September 24, 2011That cycle time... getting from idea to result is one of the most critical metrics for both astartup and an established service. And the bulk of this time is spent in the applicationlifecycle across dev, QA, and operations.
  24. 24. Companies were able to achieve somewhat defensible positions based on technology...Saturday, September 24, 2011
  25. 25. Companies were able to achieve somewhat defensible positions based on technology... then came the webSaturday, September 24, 2011Then along came this thing called the web and screwed it all up... now your customers arecoming to you through a standard interface --the browser-- over standard publishedprotocols. You competition is only a few keystrokes away. The even applies in newerdistribution channels like mobile apps and their app stores.
  26. 26. How do we compete now?Saturday, September 24, 2011So 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 oropportunities.Scaling is the most straight forward problem to solve. It’s a known problem with a lot ofknown 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 getinto the details
  27. 27. How do we compete now? 1. ScaleSaturday, September 24, 2011So 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 oropportunities.Scaling is the most straight forward problem to solve. It’s a known problem with a lot ofknown 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 getinto the details
  28. 28. How do we compete now? 1. Scale 2. Velocity of InnovationSaturday, September 24, 2011So 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 oropportunities.Scaling is the most straight forward problem to solve. It’s a known problem with a lot ofknown 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 getinto the details
  29. 29. How do we compete now? 1. Scale 2. Velocity of InnovationSaturday, September 24, 2011So 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 oropportunities.Scaling is the most straight forward problem to solve. It’s a known problem with a lot ofknown 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 getinto the details
  30. 30. Innovation is really a numbers game... Ah-ha! Ka-ching! Ah-ha!Saturday, September 24, 2011The global innovation success rate across all geographies and industries
  31. 31. Innovation is really a numbers game... 4%* Ah-ha! Ka-ching! 94%* Ah-ha! *Study by Doblin Innovation ConsultantsSaturday, September 24, 2011The global innovation success rate across all geographies and industries
  32. 32. Innovation is really a numbers game... 4%* Ah-ha! Ka-ching! 94%* Ah-ha! *Study by Doblin Innovation ConsultantsSaturday, September 24, 2011The global innovation success rate across all geographies and industries
  33. 33. How to win a numbers game...Company A ResultAh-ha!Company B Result Result Result ResultAh-ha! Ah-ha! Ah-ha! Ah-ha!Saturday, September 24, 2011Put it this way... if in the time it takes you to get through one cycle, your competitor can getthrough 4... who do you think will be more competitive??
  34. 34. How to win a numbers game...Company A ResultAh-ha!Company B Result Result Result ResultAh-ha! Ah-ha! Ah-ha! Ah-ha!Saturday, September 24, 2011This is why the notion of a “burn rate” is a meaningless statistic. Say you have enough cash inthe bank to pay for x number of months. That doesn’t tell you anything... do you have 10shots at making customers happy or just 1? Think about it like a carnival game. If you haveten balls to throw at the target and someone else only has 1... who has a better probability ofsuccess?
  35. 35. 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=2971521Saturday, September 24, 2011Jon Jenkins at VelocityOps is amazon’s strategic weapon... their books aren’t better, their storage isn’t better, theirhypervisor isn’t better.Everyone copies them but their just keep rolling out features and lowering costs faster thantheir competitors can do either
  36. 36. Business is already thinking about this... Customer Development ModelSaturday, September 24, 2011But can the biz move fast enough? They already are wanting to do soCustomer Development
  37. 37. Operations becomes a strategic weaponSaturday, September 24, 2011
  38. 38. Operations becomes a strategic weapon When you are continuously...Saturday, September 24, 2011
  39. 39. Operations becomes a strategic weapon When you are continuously... 1. Increasing velocity of innovationSaturday, September 24, 2011
  40. 40. Operations becomes a strategic weapon When you are continuously... 1. Increasing velocity of innovation 2. Improving return on investmentSaturday, September 24, 2011
  41. 41. Saturday, September 24, 2011Return on investment is different than just reducing costBut what about for enterprises... 70% is spent on maintaining existing services... only 30% onnew project
  42. 42. Anti-patterns to success... • Misalignment of incentives • Latent demand that’s not being met Skip • Overlooked non-functional requirements • Mismatched processes • Mismatched tooling • Lacking metrics about processSaturday, September 24, 2011
  43. 43. Warning signs... Skip? • Bottlenecks • Wait time • Unreliable procedures • Conflict (active or passive) • Limited visibility or measurementSaturday, September 24, 2011
  44. 44. Let’s Talk.... @damonedwards damon@dtosolutions.comSaturday, September 24, 2011We do this stuff all day long for a lot of large and cutting edge clients... and we love talkingabout DevOps so drop me a line anytime if you want to talk
  45. 45. Let’s Talk.... @damonedwards dev2ops.org damon@dtosolutions.comSaturday, September 24, 2011We do this stuff all day long for a lot of large and cutting edge clients... and we love talkingabout DevOps so drop me a line anytime if you want to talk
  46. 46. DevOps Cafe Skip? subscribe in iTunesSaturday, September 24, 2011I 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 thedevelopment and operation spectrum.Between DTO and doing the devops cafe content I get to talk to a lot of companies and seewhat’s working and what isn’t working.

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