Business
Operational maturity removes three major blockers to business success
Global Banking & Finance Review®
Company
By Lee Fredricks, Director Solutions Consulting, EMEA at PagerDuty
Market competition is fierce, customer expectations are high, and organisations face real challenges addressing three key areas of concern: customer churn, unplanned operational incidents, and IT downtime. Each of which significantly impacts the smooth running of a business and bottom-line revenue.
A 2014 Gartner report estimated that the average cost of IT downtime was $5,600 per minute. In 2020, a Statista study validated these costs. Both can be attributed to the vastly increased digitalization of society in the past decade, with services delivered online or by app becoming central to business offerings.
Operational maturity improves overall operational capability, allowing for a level of excellence where organisations can deliver consistent, reliable, and predictable services. It should be thought of as a journey through several stages. The starting point is where an organisation is reactive to operational issues, and the end point is a proactive and continuous culture of improvement. In between, there are three levels of compliance, standardisation, and optimisation which organisations must pass through to achieve full maturity.
Technology leaders must impress on the business that operational maturity will allow the organisation to actually ‘do more with less’. Difficult economic times should not mean that the business cannot improve its end-to-end technology, operations, and customer experience. It controls costs, helps delight customers, and maintains business predictability.
Delivering operational maturity as a scaling business
The journey to full maturity consists of five definable stages.
MANUAL – This stage involves no inbound integrations, and incidents are initiated manually.
REACTIVE – There are some inbound integrations, but no other configurations are present. There are also no defined processes for managing incidents.
RESPONSIVE – Call-out schedules are defined, with multiple escalation levels. Teams are also moving towards full-service ownership.
PROACTIVE – Outbound integrations, service dependencies, change events, and response plays are utilised to fix issues before customers are aware.
PREVENTATIVE – This involves the adoption of event intelligence features or consumption of analytics to allow predictive remediation.
As an organisation progresses through the stages, it increases its ability to manage unplanned incidents and better allocate resources to improve the stability of its operational systems. Growth through the phases of this five-stage model reduces unplanned incidents and downtime, major causes of customer churn.
Before embarking on the journey, technology leaders must first understand the current workload and practices of the delivery team. PagerDuty’s most recent State of Digital Operations Report disclosed that 42% of technical teams were working more hours in 2021 than previously and more than half (54%) reported being interrupted outside of working hours. Such demands demonstrate the need for a preventative stance. Out-of-hours interruptions and break-fix work are symptoms of a less operationally mature state.
Secondly, there must be a level of understanding that impacted teams will not be capable of delivering major projects to schedule without support. The answer to this challenge is investment in incident management, automation and orchestration to democratise and delegate automation, automate diagnostic and remediation activities, and make better use of people’s available capacity. These are some of the core tenets of the operations cloud model. Businesses must establish digital operations resilience as they optimise infrastructure, software, and mission-critical applications, and drive down technical debt – the remedial work required to improve systems built just ‘good enough’ previously. Just as cloud computing abstracts and enhances IT processes, greater levels of automation empower operational teams by interpreting the firehose of observability metrics and translating them into relevant actions.
Automation streamlines business operational processes, reducing the risk of human error and increasing efficiency. Automating workflows reduces the time and effort of manual work required, freeing up teams for more value-added activities. Automated diagnostic gathering and automated remediation can also help businesses respond more quickly to operational incidents, minimising the impact on customers and reducing downtime – and thereby churn.
And finally, to achieve operational maturity, businesses need to focus on standardisation and compliance. Implementing standard processes and procedures ensures that operations are consistent and predictable, reducing the risk of incidents and downtime even further.
Delivering on operational maturity to beat the blockers
There are a set of quick wins that can be put in motion to move along the journey:
To move a business to the Preventative stage, focus should be firmly set on delivering automated solutions but in a way that makes sense based on business priorities, available budget and technical ability. Ensuring that engineers and developers get the training and support they need to move from a break-fix world to one based on the operations cloud will future-proof technology and business transformation projects and hence increase the stability of the business infrastructure and cut down churn, incidents, and downtime.
Business without the blockers of churn, incidents, and downtime
The Hackett Group suggests that digital excellence significantly improves productivity and reduces the costs of technology infrastructure by 20%. Deloitte’s research, ‘Uncovering the connection between digital maturity and financial performance’ goes into further detail, with higher-maturity companies reporting industry-leading revenue growth and profit margins.
Embarking on the journey to operational maturity helps remove blockers to growth, reduce incidents, downtime and customer churn. It is also part of a transformation that actually allows the operations team to do more with less – that is, contribute to major cost savings whilst returning valuable innovation time to developers. It can even help reduce staff turnover and burnout. Commitment to operational maturity is the future-proofing needed to thrive in this economic environment.
Operational maturity refers to the level of an organization's capability to manage its operations effectively, progressing from reactive to proactive management of processes and incidents.
IT downtime is the period when a company's IT systems are unavailable, which can lead to loss of productivity and revenue.
Customer churn is the rate at which customers stop doing business with a company, often measured as a percentage of total customers over a specific period.
Incident management is the process of identifying, managing, and resolving incidents that disrupt normal service operations to minimize impact on business.
Automation in business refers to the use of technology to perform tasks with minimal human intervention, improving efficiency and reducing errors.
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