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This stuff is cool, but…
HOW CAN I GET MY COMPANY TO DO IT?
Businessing the S*** out of Transformative Development!
Mark H...
@MkHeck
Who am I?
@MkHeck
Who am I?
• Author
• Speaker
• DEVELOPER
• Seeker of a better way
• MBA
@MkHeck
@MkHeck
The Goal
@MkHeck
Disclaimers
@MkHeck
Disclaimers
• I’m human
@MkHeck
Disclaimers
• I’m human
• Measurements require assumptions…
@MkHeck
Disclaimers
• I’m human
• Measurements require assumptions…
• …but those will be clearly stated and quantified
@MkHeck
Disclaimers
• I’m human
• Measurements require assumptions…
• …but those will be clearly stated and quantified
• E...
@MkHeck
Disclaimers
• I’m human
• Measurements require assumptions…
• …but those will be clearly stated and quantified
• E...
@MkHeck
Disclaimers
• I’m human
• Measurements require assumptions…
• …but those will be clearly stated and quantified
• E...
@MkHeck
With great power…
@MkHeck
What’s on the agenda?
@MkHeck
What’s on the agenda?
@MkHeck
What’s on the agenda?
• Payback
@MkHeck
What’s on the agenda?
• Payback
• Net Present Value (NPV)
@MkHeck
What’s on the agenda?
• Payback
• Net Present Value (NPV)
• Quantification
@MkHeck
What’s on the agenda?
• Payback
• Net Present Value (NPV)
• Quantification
• Based upon (solid, well-reasoned, cal...
@MkHeck
What’s on the agenda?
• Payback
• Net Present Value (NPV)
• Quantification
• Based upon (solid, well-reasoned, cal...
@MkHeck
@MkHeck
Payback: Formula
Cost of Project
Annual Cash Inflow (or Savings)
= Payback Period
@MkHeck
Payback: Example
$500,000 (costs)
$200,000/year (new income)
= 2.5 years
@MkHeck
Payback: Explanation
@MkHeck
Payback: Explanation
• Shorter payback period generally better
@MkHeck
Payback: Explanation
• Shorter payback period generally better
• Longer payback means more uncertainty, greater ri...
@MkHeck
Payback: Explanation
• Shorter payback period generally better
• Longer payback means more uncertainty, greater ri...
@MkHeck
Payback: Explanation
• Shorter payback period generally better
• Longer payback means more uncertainty, greater ri...
@MkHeck
Payback: Drawbacks
@MkHeck
Payback: Drawbacks
• No consideration of total value
@MkHeck
Payback: Drawbacks
• No consideration of total value
• 3 year payback, no further value after year 5, lifetime val...
@MkHeck
Payback: Drawbacks
• No consideration of total value
• 3 year payback, no further value after year 5, lifetime val...
@MkHeck
Payback: Drawbacks
• No consideration of total value
• 3 year payback, no further value after year 5, lifetime val...
@MkHeck
Payback: Drawbacks
• No consideration of total value
• 3 year payback, no further value after year 5, lifetime val...
@MkHeck
Payback: Drawbacks
• No consideration of total value
• 3 year payback, no further value after year 5, lifetime val...
@MkHeck
Net Present Value (NPV): Formula
Net Period Cash Flow
(1+R)T
= NPV∑
where R is the Rate of Return
and T is the num...
@MkHeck
Net Present Value (NPV): Example 1
$1,000,000
(1+0.05)5
= $783,526∑
where R is the Rate of Return
and T is the num...
@MkHeck
Net Present Value (NPV): Example 2
= $646,206
$200,000
(1+0.04)2
$400,000
(1+0.03)3
$100,000
(1+0.05)1
++
$184,911...
@MkHeck
Inputs & Associated Challenges
@MkHeck
Inputs & Associated Challenges
• Quantifying qualitative measures
@MkHeck
Inputs & Associated Challenges
• Quantifying qualitative measures
• How would this initiative:
• affect your organ...
@MkHeck
Putting Numbers with It: Pros & Cons
@MkHeck
Putting Numbers with It: Pros & Cons
• Pros
• Critical analysis yields better understanding of inputs, impacts
• C...
@MkHeck
Putting Numbers with It: Pros & Cons
• Pros
• Critical analysis yields better understanding of inputs, impacts
• C...
@MkHeck
Putting Numbers with It: Caveats
@MkHeck
Putting Numbers with It: Caveats
• Time is a constraint
@MkHeck
Putting Numbers with It: Caveats
• Time is a constraint
• Assumptions form basis of conclusions
• Bad assumptions ...
@MkHeck
Putting Numbers with It: Caveats
• Time is a constraint
• Assumptions form basis of conclusions
• Bad assumptions ...
@MkHeck
Putting Numbers with It: Caveats
• Time is a constraint
• Assumptions form basis of conclusions
• Bad assumptions ...
Let’s run through it
(Optional<Suit>)
Microservices
Assemble to make
“more than meets the eye”
@MkHeck
Notes about Microservice Architectures
@MkHeck
Notes about Microservice Architectures
• “Return on Investment (ROI) is driven by accelerated realization of
benef...
@MkHeck
Notes about Microservice Architectures
• “Return on Investment (ROI) is driven by accelerated realization of
benef...
@MkHeck
Notes about Microservice Architectures
• “Return on Investment (ROI) is driven by accelerated realization of
benef...
@MkHeck
Notes about Microservice Architectures
• “Return on Investment (ROI) is driven by accelerated realization of
benef...
@MkHeck
Notes about Microservice Architectures
• “Return on Investment (ROI) is driven by accelerated realization of
benef...
@MkHeck
Expectations
@MkHeck
Expectations
• Small batch sizes, small teams: Microservices
• Bounded contexts
• API-based contracts for interact...
@MkHeck
Expectations
@MkHeck
Expectations
• Microservices (continued)
• Improved quality; small mods vs. major overhauls
• Improved end-user sa...
Monoliths
That’s one big app!
@MkHeck
Assumptions: monoliths
@MkHeck
Assumptions: monoliths
• Average cadence of releases of key monolithic apps: 1x/year*
• 10 months of development b...
Microservices
Assemble to make
“more than meets the eye”
@MkHeck
Assumptions: microservices
@MkHeck
Assumptions: microservices
• Average cadence of microservices releases: 7448x/DAY*
• If your company is 1/1000th (...
@MkHeck
Assumptions: microservices
@MkHeck
Assumptions: microservices
• How much more functionality can be delivered more quickly, more
accurately?
@MkHeck
Assumptions: microservices
• How much more functionality can be delivered more quickly, more
accurately?
• If you ...
@MkHeck
Assumptions: microservices
• How much more functionality can be delivered more quickly, more
accurately?
• If you ...
@MkHeck
Quantification
@MkHeck
Quantification
• Volatile functionality
• Sales drivers
• Product development/engineering
@MkHeck
Quantification
• Volatile functionality
• Sales drivers
• Product development/engineering
• Focus upon producing k...
@MkHeck
Quantification
*would increase costs and resultant cash flows
**assumes some functionality would be implemented ot...
@MkHeck
Quantification
• Costs
• Upskilling required for relevant tech teams
• Ramp-up - offset by avoidance of contextual...
@MkHeck
Totals, Year 1
New revenues, year 1 $14m
Expenses
Upskilling ($1m)
Platform costs ($1m)
Interfaces ($1m)
Opportuni...
@MkHeck
Annual Cash Inflow (or Savings)
Cost of Project
Payback: Microservices
= Payback Period
@MkHeck
Annual Cash Inflow (or Savings)
8,000,000
Payback: Microservices
= Payback Period
@MkHeck
14,000,000
8,000,000
Payback: Microservices
= Payback Period
@MkHeck
6.86 months
14,000,000
8,000,000
Payback: Microservices
=
@MkHeck
6.86 months
14,000,000
8,000,000
Payback: Microservices
=
APPROVED!
Not so fast…
@MkHeck
Totals, Year 1
New revenues, year 1 $14m
Expenses
Upskilling ($1m)
Platform costs ($1m)
Interfaces ($1m)
Opportuni...
@MkHeck
Y2 Assumptions
@MkHeck
Y2 Assumptions
• Double number of microservices added in Y2 vs. Y1
• 14 new in Y1 + 28 new in Y2 = 42 new microser...
@MkHeck
Y2 Assumptions
• Double number of microservices added in Y2 vs. Y1
• 14 new in Y1 + 28 new in Y2 = 42 new microser...
@MkHeck
Y2 Assumptions
• Double number of microservices added in Y2 vs. Y1
• 14 new in Y1 + 28 new in Y2 = 42 new microser...
@MkHeck
Totals, Year 2
New revenues, year 2 $35m
Expenses
Upskilling ($1m)
Platform costs ($2m)
Interfaces ($1m)
Opportuni...
@MkHeck
Y3 Assumptions
@MkHeck
Y3 Assumptions
• Double number of microservices added in Y3 vs. Y2
• 42 @EOY2 + 56 new in Y3 = 98 new microservice...
@MkHeck
Y3 Assumptions
• Double number of microservices added in Y3 vs. Y2
• 42 @EOY2 + 56 new in Y3 = 98 new microservice...
@MkHeck
Y3 Assumptions
• Double number of microservices added in Y3 vs. Y2
• 42 @EOY2 + 56 new in Y3 = 98 new microservice...
@MkHeck
Totals, Year 3
New revenues, year 3 $63m
Costs
Upskilling ($1m)
Platform costs ($6m)
Interfaces ($1m)
Opportunity ...
@MkHeck
NPV: Microservices
= $61,086,277
$21m
(1+0.05)2
$40m
(1+0.05)3
$6m
(1+0.05)1
++
$19,954,649 $35,417,342$5,714,286
@MkHeck
NPV: Microservices
= $61,086,277
$21m
(1+0.05)2
$40m
(1+0.05)3
$6m
(1+0.05)1
++
$19,954,649 $35,417,342$5,714,286
...
@MkHeck
Factors Revisited
@MkHeck
Factors Revisited
• Quantifying qualitative measures
@MkHeck
Factors Revisited
• Quantifying qualitative measures
• How would this initiative:
• affect your organization’s/gro...
@MkHeck
In summary…
@MkHeck
In summary…
• Critical analysis yields better understanding of inputs, impacts
• Can provide more objective and co...
@MkHeck
This is Not the Enemy!
@MkHeck
This is Not the Enemy!They are your Allies
@MkHeck
Thank You for Participating!
Keep the conversation going:
• @MkHeck
• mark@thehecklers.org
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This stuff is cool, but...HOW CAN I GET MY COMPANY TO DO IT?

We go to conferences & get excited about things that could revolutionize our development & change our organization! Then, we go home...and hit the wall. If you've ever asked yourself, "This stuff is cool, but HOW CAN I GET MY COMPANY TO DO IT??!", this is the session for you.

Learn from an experienced software developer (who also happens to have an MBA) how to make your case to leadership.

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This stuff is cool, but...HOW CAN I GET MY COMPANY TO DO IT?

  1. 1. This stuff is cool, but… HOW CAN I GET MY COMPANY TO DO IT? Businessing the S*** out of Transformative Development! Mark Heckler Principal Technologist/Developer Advocate Pivotal Software, Inc. www.thehecklers.org mark@thehecklers.org @MkHeck @MkHeck
  2. 2. @MkHeck Who am I?
  3. 3. @MkHeck Who am I? • Author • Speaker • DEVELOPER • Seeker of a better way • MBA
  4. 4. @MkHeck
  5. 5. @MkHeck The Goal
  6. 6. @MkHeck Disclaimers
  7. 7. @MkHeck Disclaimers • I’m human
  8. 8. @MkHeck Disclaimers • I’m human • Measurements require assumptions…
  9. 9. @MkHeck Disclaimers • I’m human • Measurements require assumptions… • …but those will be clearly stated and quantified
  10. 10. @MkHeck Disclaimers • I’m human • Measurements require assumptions… • …but those will be clearly stated and quantified • Estimate benefits conservatively, costs liberally
  11. 11. @MkHeck Disclaimers • I’m human • Measurements require assumptions… • …but those will be clearly stated and quantified • Estimate benefits conservatively, costs liberally • The numbers you see are EXAMPLES
  12. 12. @MkHeck Disclaimers • I’m human • Measurements require assumptions… • …but those will be clearly stated and quantified • Estimate benefits conservatively, costs liberally • The numbers you see are EXAMPLES • Adjust sensibly for your circumstances
  13. 13. @MkHeck With great power…
  14. 14. @MkHeck What’s on the agenda?
  15. 15. @MkHeck What’s on the agenda?
  16. 16. @MkHeck What’s on the agenda? • Payback
  17. 17. @MkHeck What’s on the agenda? • Payback • Net Present Value (NPV)
  18. 18. @MkHeck What’s on the agenda? • Payback • Net Present Value (NPV) • Quantification
  19. 19. @MkHeck What’s on the agenda? • Payback • Net Present Value (NPV) • Quantification • Based upon (solid, well-reasoned, calculated) assumptions
  20. 20. @MkHeck What’s on the agenda? • Payback • Net Present Value (NPV) • Quantification • Based upon (solid, well-reasoned, calculated) assumptions • Several steps to get there, but don’t panic!
  21. 21. @MkHeck
  22. 22. @MkHeck Payback: Formula Cost of Project Annual Cash Inflow (or Savings) = Payback Period
  23. 23. @MkHeck Payback: Example $500,000 (costs) $200,000/year (new income) = 2.5 years
  24. 24. @MkHeck Payback: Explanation
  25. 25. @MkHeck Payback: Explanation • Shorter payback period generally better
  26. 26. @MkHeck Payback: Explanation • Shorter payback period generally better • Longer payback means more uncertainty, greater risk
  27. 27. @MkHeck Payback: Explanation • Shorter payback period generally better • Longer payback means more uncertainty, greater risk • Prefer < 3 years payback period
  28. 28. @MkHeck Payback: Explanation • Shorter payback period generally better • Longer payback means more uncertainty, greater risk • Prefer < 3 years payback period • Payback < 1 year == essential project
  29. 29. @MkHeck Payback: Drawbacks
  30. 30. @MkHeck Payback: Drawbacks • No consideration of total value
  31. 31. @MkHeck Payback: Drawbacks • No consideration of total value • 3 year payback, no further value after year 5, lifetime value: $250,000
  32. 32. @MkHeck Payback: Drawbacks • No consideration of total value • 3 year payback, no further value after year 5, lifetime value: $250,000 • 5 year payback, ongoing value, lifetime value: $1,000,000
  33. 33. @MkHeck Payback: Drawbacks • No consideration of total value • 3 year payback, no further value after year 5, lifetime value: $250,000 • 5 year payback, ongoing value, lifetime value: $1,000,000 • Which would you choose?
  34. 34. @MkHeck Payback: Drawbacks • No consideration of total value • 3 year payback, no further value after year 5, lifetime value: $250,000 • 5 year payback, ongoing value, lifetime value: $1,000,000 • Which would you choose? • No consideration of time value of money
  35. 35. @MkHeck Payback: Drawbacks • No consideration of total value • 3 year payback, no further value after year 5, lifetime value: $250,000 • 5 year payback, ongoing value, lifetime value: $1,000,000 • Which would you choose? • No consideration of time value of money • Good measure, but incomplete
  36. 36. @MkHeck Net Present Value (NPV): Formula Net Period Cash Flow (1+R)T = NPV∑ where R is the Rate of Return and T is the number of time periods
  37. 37. @MkHeck Net Present Value (NPV): Example 1 $1,000,000 (1+0.05)5 = $783,526∑ where R is the Rate of Return and T is the number of time periods
  38. 38. @MkHeck Net Present Value (NPV): Example 2 = $646,206 $200,000 (1+0.04)2 $400,000 (1+0.03)3 $100,000 (1+0.05)1 ++ $184,911 $366,057$95,238
  39. 39. @MkHeck Inputs & Associated Challenges
  40. 40. @MkHeck Inputs & Associated Challenges • Quantifying qualitative measures
  41. 41. @MkHeck Inputs & Associated Challenges • Quantifying qualitative measures • How would this initiative: • affect your organization’s/group’s/team’s work? • impact your tech stack? • contribute to recruitment/retention? • affect the business?
  42. 42. @MkHeck Putting Numbers with It: Pros & Cons
  43. 43. @MkHeck Putting Numbers with It: Pros & Cons • Pros • Critical analysis yields better understanding of inputs, impacts • Can provide more objective and compelling justification for initiative
  44. 44. @MkHeck Putting Numbers with It: Pros & Cons • Pros • Critical analysis yields better understanding of inputs, impacts • Can provide more objective and compelling justification for initiative • Cons • Can be very time-consuming • No automatic conversion between qualitative & quantitative measures
  45. 45. @MkHeck Putting Numbers with It: Caveats
  46. 46. @MkHeck Putting Numbers with It: Caveats • Time is a constraint
  47. 47. @MkHeck Putting Numbers with It: Caveats • Time is a constraint • Assumptions form basis of conclusions • Bad assumptions -> Inaccurate conclusions • Good assumptions -> (In?)accurate conclusions
  48. 48. @MkHeck Putting Numbers with It: Caveats • Time is a constraint • Assumptions form basis of conclusions • Bad assumptions -> Inaccurate conclusions • Good assumptions -> (In?)accurate conclusions • Document assumptions meticulously
  49. 49. @MkHeck Putting Numbers with It: Caveats • Time is a constraint • Assumptions form basis of conclusions • Bad assumptions -> Inaccurate conclusions • Good assumptions -> (In?)accurate conclusions • Document assumptions meticulously • Be open to discussion, refinement
  50. 50. Let’s run through it (Optional<Suit>)
  51. 51. Microservices Assemble to make “more than meets the eye”
  52. 52. @MkHeck Notes about Microservice Architectures
  53. 53. @MkHeck Notes about Microservice Architectures • “Return on Investment (ROI) is driven by accelerated realization of benefits rather than overall business transformation.”
  54. 54. @MkHeck Notes about Microservice Architectures • “Return on Investment (ROI) is driven by accelerated realization of benefits rather than overall business transformation.” • Reduced maintenance costs?
  55. 55. @MkHeck Notes about Microservice Architectures • “Return on Investment (ROI) is driven by accelerated realization of benefits rather than overall business transformation.” • Reduced maintenance costs? • Increased business opportunities through new APIs?
  56. 56. @MkHeck Notes about Microservice Architectures • “Return on Investment (ROI) is driven by accelerated realization of benefits rather than overall business transformation.” • Reduced maintenance costs? • Increased business opportunities through new APIs? • Selective scaling of only high-demand microservices reduces costs
  57. 57. @MkHeck Notes about Microservice Architectures • “Return on Investment (ROI) is driven by accelerated realization of benefits rather than overall business transformation.” • Reduced maintenance costs? • Increased business opportunities through new APIs? • Selective scaling of only high-demand microservices reduces costs • Investment includes upskilling/coaching/mentoring
  58. 58. @MkHeck Expectations
  59. 59. @MkHeck Expectations • Small batch sizes, small teams: Microservices • Bounded contexts • API-based contracts for interactions • More functionality delivered to market (or internal end-users) sooner • Building the right product (tight dev loop == tight feedback loop)
  60. 60. @MkHeck Expectations
  61. 61. @MkHeck Expectations • Microservices (continued) • Improved quality; small mods vs. major overhauls • Improved end-user satisfaction • Small, frequent releases expose & help resolve process issues “in the small” • When releases are tiny, well-planned & -choreographed events, they can happen at will
  62. 62. Monoliths That’s one big app!
  63. 63. @MkHeck Assumptions: monoliths
  64. 64. @MkHeck Assumptions: monoliths • Average cadence of releases of key monolithic apps: 1x/year* • 10 months of development before “code freeze” • 1 month of integration testing, bug fixes • 1 month of UAT (confirmations, course corrections, logging “new” requirements) *optimistic in many cases
  65. 65. Microservices Assemble to make “more than meets the eye”
  66. 66. @MkHeck Assumptions: microservices
  67. 67. @MkHeck Assumptions: microservices • Average cadence of microservices releases: 7448x/DAY* • If your company is 1/1000th (0.1%) as effective as Amazon, that’s still > 7 releases/day…over 2500 releases/year! • 14 new microservices in first year • Each of your Y1 microservices averages a release every other day *Amazon: 1 every 11.6s in 2011 - YMMV!
  68. 68. @MkHeck Assumptions: microservices
  69. 69. @MkHeck Assumptions: microservices • How much more functionality can be delivered more quickly, more accurately?
  70. 70. @MkHeck Assumptions: microservices • How much more functionality can be delivered more quickly, more accurately? • If you can approach zero with missed requirements, missed opportunities, missed expectations…how much is that worth?
  71. 71. @MkHeck Assumptions: microservices • How much more functionality can be delivered more quickly, more accurately? • If you can approach zero with missed requirements, missed opportunities, missed expectations…how much is that worth? • If users can have needed functionality MONTHS or YEARS sooner, what is that worth to your company?
  72. 72. @MkHeck Quantification
  73. 73. @MkHeck Quantification • Volatile functionality • Sales drivers • Product development/engineering
  74. 74. @MkHeck Quantification • Volatile functionality • Sales drivers • Product development/engineering • Focus upon producing key abilities, define interfaces in monolith • Average time to get interface APIs “live”: 6 months • Average business size: $500m annual revenue • Impact of high-demand projects implemented via microservices: $1m/microservice
  75. 75. @MkHeck Quantification *would increase costs and resultant cash flows **assumes some functionality would be implemented otherwise in monolith ($1m) ($2m) ($5m)
  76. 76. @MkHeck Quantification • Costs • Upskilling required for relevant tech teams • Ramp-up - offset by avoidance of contextualization issues • Other things that may smooth/speed path omitted* • Platform costs and interface development • Foregone revenue from monolith implementation** *would increase costs and resultant cash flows **assumes some functionality would be implemented otherwise in monolith ($1m) ($2m) ($5m)
  77. 77. @MkHeck Totals, Year 1 New revenues, year 1 $14m Expenses Upskilling ($1m) Platform costs ($1m) Interfaces ($1m) Opportunity costs ($5m) Y1 NET GAIN/LOSS FROM ADOPTION $6m
  78. 78. @MkHeck Annual Cash Inflow (or Savings) Cost of Project Payback: Microservices = Payback Period
  79. 79. @MkHeck Annual Cash Inflow (or Savings) 8,000,000 Payback: Microservices = Payback Period
  80. 80. @MkHeck 14,000,000 8,000,000 Payback: Microservices = Payback Period
  81. 81. @MkHeck 6.86 months 14,000,000 8,000,000 Payback: Microservices =
  82. 82. @MkHeck 6.86 months 14,000,000 8,000,000 Payback: Microservices = APPROVED!
  83. 83. Not so fast…
  84. 84. @MkHeck Totals, Year 1 New revenues, year 1 $14m Expenses Upskilling ($1m) Platform costs ($1m) Interfaces ($1m) Opportunity costs ($5m) Y1 NET GAIN/LOSS FROM ADOPTION $6m
  85. 85. @MkHeck Y2 Assumptions
  86. 86. @MkHeck Y2 Assumptions • Double number of microservices added in Y2 vs. Y1 • 14 new in Y1 + 28 new in Y2 = 42 new microservices @EOY2
  87. 87. @MkHeck Y2 Assumptions • Double number of microservices added in Y2 vs. Y1 • 14 new in Y1 + 28 new in Y2 = 42 new microservices @EOY2 • Estimate slightly reduced impact, may be overly pessimistic • 28 * $750k = $21m $14m + $21m = $35m “new” revenue
  88. 88. @MkHeck Y2 Assumptions • Double number of microservices added in Y2 vs. Y1 • 14 new in Y1 + 28 new in Y2 = 42 new microservices @EOY2 • Estimate slightly reduced impact, may be overly pessimistic • 28 * $750k = $21m $14m + $21m = $35m “new” revenue • Assume linear ability to expand monolith, may be overly optimistic • $10m worth of functionality could be implemented in monolith
  89. 89. @MkHeck Totals, Year 2 New revenues, year 2 $35m Expenses Upskilling ($1m) Platform costs ($2m) Interfaces ($1m) Opportunity costs ($10m) Y2 NET GAIN/LOSS FROM ADOPTION $21m
  90. 90. @MkHeck Y3 Assumptions
  91. 91. @MkHeck Y3 Assumptions • Double number of microservices added in Y3 vs. Y2 • 42 @EOY2 + 56 new in Y3 = 98 new microservices @EOY3
  92. 92. @MkHeck Y3 Assumptions • Double number of microservices added in Y3 vs. Y2 • 42 @EOY2 + 56 new in Y3 = 98 new microservices @EOY3 • Estimate further reduced impact, may be overly pessimistic • 56 * $500k = $28m $35m + $28m = $63m “new” revenue
  93. 93. @MkHeck Y3 Assumptions • Double number of microservices added in Y3 vs. Y2 • 42 @EOY2 + 56 new in Y3 = 98 new microservices @EOY3 • Estimate further reduced impact, may be overly pessimistic • 56 * $500k = $28m $35m + $28m = $63m “new” revenue • Assume linear ability to expand monolith, may be overly optimistic • $15m worth of functionality could be implemented in monolith
  94. 94. @MkHeck Totals, Year 3 New revenues, year 3 $63m Costs Upskilling ($1m) Platform costs ($6m) Interfaces ($1m) Opportunity costs ($15m) Y3 NET GAIN/LOSS FROM ADOPTION $40m
  95. 95. @MkHeck NPV: Microservices = $61,086,277 $21m (1+0.05)2 $40m (1+0.05)3 $6m (1+0.05)1 ++ $19,954,649 $35,417,342$5,714,286
  96. 96. @MkHeck NPV: Microservices = $61,086,277 $21m (1+0.05)2 $40m (1+0.05)3 $6m (1+0.05)1 ++ $19,954,649 $35,417,342$5,714,286 APPROVED!
  97. 97. @MkHeck Factors Revisited
  98. 98. @MkHeck Factors Revisited • Quantifying qualitative measures
  99. 99. @MkHeck Factors Revisited • Quantifying qualitative measures • How would this initiative: • affect your organization’s/group’s/team’s work? • impact your tech stack? • contribute to recruitment/retention? • affect the business?
  100. 100. @MkHeck In summary…
  101. 101. @MkHeck In summary… • Critical analysis yields better understanding of inputs, impacts • Can provide more objective and compelling justification for initiative • Be honest • Document & communicate assumptions clearly • Be open to course corrections
  102. 102. @MkHeck This is Not the Enemy!
  103. 103. @MkHeck This is Not the Enemy!They are your Allies
  104. 104. @MkHeck Thank You for Participating! Keep the conversation going: • @MkHeck • mark@thehecklers.org

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