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June 27, 2024

Unlocking the True Value of Your Internal Developer Platform Investments

By IT Revolution

As technology leaders in large organizations, we are constantly seeking ways to accelerate innovation, boost developer productivity, and drive business growth. One key enabler in this pursuit is the Internal Developer Platform (IDP). However, measuring and communicating the value of IDPs can be a complex task, as they often operate behind the scenes as silent champions of software development.

In their insightful paper “Measuring the Value of Your Internal Developer Platform Investments” from the Spring 2024 Enterprise Technology Leadership Journal, authors Sridhar Kotagiri and Ajay Chankramath provide a comprehensive framework for articulating, measuring, and communicating the true worth of IDPs. They emphasize the importance of quantifying the impact of these platforms to transform them from silent enablers into valued business drivers.

The authors highlight several key reasons why measuring IDP value is critical:

  1. Gaining visibility into ROI and value delivery timeline.
  2. Quantifying impact on customers and the organization.
  3. Prioritizing competing investments objectively.
  4. Securing stakeholder alignment and approvals.

The Platform Value Cycle

To navigate the challenges of measuring IDP value, Kotagiri and Chankramath introduce the Platform Value Cycle, a two-step process involving defining value using the Platform Value Model and measuring value using Platform Value Metrics. The Platform Value Model empowers product and engineering leaders to quantify and track value by modeling costs and value over a chosen timeline. It accommodates various scenarios and allows for changes during execution.

The authors provide a step-by-step exploration of constructing a Platform Value Model, using a concrete example to illustrate the process of articulating, measuring, and tracking IDP value. They demonstrate how to calculate build costs, savings/workload, and value projections, ultimately generating an ROI graph that communicates the breakeven point for platform investments.

To measure ongoing value, the authors recommend Platform Value Metrics aligned with three key axes:

  • improving cost efficiency,
  • driving growth with faster experimentation,
  • and enhancing developer experience.

These metrics, such as Value to Cost Ratio (VCR), Innovation Adoption Rate (IAR), and Developer Toil Ratio (DTR), provide tangible data points to assess IDP performance and foster a data-driven decision-making culture.

Connecting IDPs for Business Outcomes

Kotagiri and Chankramath also emphasize the importance of connecting IDPs to business outcomes. They introduce the Value Articulation Framework, which visually connects platform capabilities to technical outcomes, business outcomes, and ultimately, business drivers. This framework helps stakeholders comprehend the transformative potential of IDPs and optimizes their usage to unlock maximum value.

As technology leaders, it is our responsibility to advocate for the strategic importance of IDPs and secure the necessary investment and support. By leveraging the Platform Value Model and Platform Value Metrics, we can quantify the impact of IDPs, align stakeholders, and drive a metrics-driven approach to platform engineering evolution.

The authors’ insights serve as a call to action for us to shift our mindset from viewing IDPs as mere technical solutions to recognizing them as strategic assets that accelerate innovation, boost efficiency, and fuel business growth. By embracing value modeling and measurement, we can unlock the true potential of our IDPs and establish a thriving platform ecosystem that propels our organizations to new heights.

In conclusion, “Measuring the Value of Your Internal Developer Platform Investments” provides an invaluable framework for technology leaders to articulate, measure, and communicate the worth of IDPs. By applying the principles and techniques outlined in this paper, we can transform our IDPs from silent enablers into vocal business drivers, ultimately harnessing their power to drive innovation, efficiency, and success in our organizations.

- About The Authors
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IT Revolution

Trusted by technology leaders worldwide. Since publishing The Phoenix Project in 2013, and launching DevOps Enterprise Summit in 2014, we’ve been assembling guidance from industry experts and top practitioners.

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