Building the Business Case: How to Quantify the Value of Investing in Performance Engineering

At any given time, there’s no shortage of potential investment areas for executives to consider. As the saying goes, “Strategy is the allocation of finite resources against infinite options.” For engineering leaders, it’s a constant battle of weighing investments into infrastructure, personnel, tooling, and so on. Even if your organization is flush with monetary resources, it’s important to stretch each dollar of spend as far as it can possibly go.

When managers and directors bubble up requests to executives for funding - they’ll likely be met with questions like, “How will this increase our productivity?” or, “What’s the ROI?” In most cases, executives prefer to analyze a concise briefing as opposed to reviewing an extensive technical report. That’s why creating what’s commonly referred to as a ‘business case’ is so important. 

Here’s the thing. If you ask 10 different executives what’s in a business case, you’ll probably get 10 different answers. At Perform, we’ve helped hundreds of clients over the last decade put together comprehensive (yet succinct) business cases that helped their projects get funded by their executive teams. While each one is unique, they all have common threads. 

In this article, we’ll first highlight the 6 key investment areas for performance engineering. Then, walk through all the critical components you’ll need to create a compelling business case that’s easy to consume for a technical or non-technical executive. 

6 Key Investment Areas for Performance Engineering

Before we get into tips for building a business case, let’s briefly review the most common areas that resources can be invested into. 

1. Building an Internal Team

Investing in a dedicated internal performance engineering team can offer a number of benefits. First of all, it’s much easier to embed the ‘culture of performance’ into an organization when full-time team members are empowered to do. And second, it’s usually best to assign control over day-to-day processes (and accountability) to FTE’s. 

There’s no one-size-fits-all answer to the question of, “Which roles should be filled with full time staff vs. contractors?” This is highly dependent on a company’s unique circumstances. If you have to pick one to start, it’s generally best to onboard a performance engineer first. 

Key Hires

• Performance Architect: Defines and drives the performance strategy across the organization, ensuring alignment with business objectives and guiding the team in implementing best practices and innovative solutions.some text
  • Benefit: Establishes a clear performance roadmap and ensures strategic alignment.
• Performance Engineer: Specializes in designing, executing, and analyzing performance tests to identify bottlenecks and ensure optimal application performance.some text
  • Benefit: Directly improves application reliability and speed.
• DevOps Engineer: Focuses on integrating performance engineering into the CI/CD pipeline, ensuring that performance tests are automated and part of the regular development workflow.some text
  • Benefit: Enhances deployment efficiency and integrates performance considerations.
• Software Developer in Test (SDET): Develops and maintains automated test scripts, including performance tests, and works closely with the development team to integrate these tests into the development cycle.some text
  • Benefit: Ensures comprehensive test coverage and early identification of issues.
• Data Analyst/Performance Analyst: Analyzes performance data to identify trends, patterns, and areas for improvement, providing actionable insights to the engineering team.some text
  • Benefit: Enables data-driven decision-making and prioritization.
• Site Reliability Engineer (SRE): Maintains and improves the reliability, availability, and performance of critical systems and applications, ensuring performance issues are quickly identified and resolved in production environments.some text
  • Benefit: Minimizes downtime and enhances user experience.

Sample Objective Statement for Onboarding a Performance Engineer: "To enhance our application performance and reliability, we propose onboarding a dedicated Performance Engineer. This remote team member will be crucial in identifying and addressing performance bottlenecks, ensuring our applications run smoothly and efficiently, ultimately leading to improved customer satisfaction and minimal downtime."

2. Augmenting an Internal Team

In many cases, it makes sense to extend an internal team with nearshore or onshore contractors. This can be a cost-effective approach to add experts to your ranks - which can be especially helpful when you’re not in a position to take on the overhead of permanent hires. Also, roles like SRE’s and SDET’s can be difficult to source since their talents are in short supply and high demand. At Perform, our staffing team maintains a talent pipeline out of Latin America that makes hiring a straightforward 30-day process. 

Sample Objective Statement for a SDET Contractor: "To enhance our testing capabilities and ensure comprehensive test coverage, we propose engaging a Software Developer in Test (SDET) contractor. This contractor will help develop and maintain automated test scripts, identifying performance issues early in the development process and reducing the cost and impact of late-stage defects."

3. Managed Service Providers (MSP’s)

MSP’s can provide comprehensive solutions with predictable costs. If you need access to seasoned experts but aren’t necessarily ready to build a team consisting of FTEs and contractors, the MSP route is likely the path of least resistance. For example, at Perform, a number of clients leverage our consulting team in a “Performance as a Service” capacity. This is where our team continuously monitors and optimizes your applications, provides regular performance reports, and implements improvements proactively to ensure optimal performance and reliability.

Granted, MSP’s like Perform can also work alongside an existing core team. For example, our architects at Perform commonly deliver short-term engagements to help clients redefine their overall performance strategy and train core teams on how to carry out key day-to-day activities. This is more of a ‘we teach you how to do it’ rather than ‘we do it for you’ type of model. 

Sample Objective Statement for Performance MSPs: "To maintain optimal application performance and reliability, we propose partnering with Perform for managed services. This will provide us with continuous access to expert performance engineers who will manage and optimize our systems, ensuring peak performance, minimizing downtime, and allowing our internal team to focus on core business activities."

4. Tooling

All too often, companies overfunding on talent acquisition and find themselves underfunding on tooling. If teams are reliant on barebones open source tools like JMeter, it can essentially cap their ‘productivity ceiling’. Performance engineers can do their best work when they’re equipped with the right frameworks for automating and scaling testing. Solutions like Tricentis NeoLoad or OctoPerf can simplify scripting and maintenance while making it easier to frequently run larger-scale tests. 

Oftentimes, there’s plenty of medium and long-term benefits to adopting a more robust platform. Still, business cases for tooling need to clearly explain why it’s worth the temporary disruption of migrating to a new solution and spending more money. 

Sample Objective Statement for Tooling: "To enhance our performance testing capabilities and ensure consistent, reliable application performance, we propose investing in Tricentis NeoLoad. This solution will help our performance engineers quickly automate our performance tests, easily report on test execution trends, and enable us to quickly identify and resolve performance issues. Ultimately, this will lead to improved application reliability and user satisfaction."

5. Training

Regular training is essential to keep your team’s skills up-to-date and ensure the effective adoption of new tools and processes. A well-trained team can proactively address performance issues and innovate solutions. Training represents a continuous investment and requires time away from daily tasks - but the benefits can far outweigh the costs.

At Perform, we offer comprehensive training programs that cover the latest in performance engineering tools and techniques. Our training is designed to be practical and immediately applicable, helping your team to quickly integrate new skills into their daily workflows.

Sample Objective Statement for Training :"To ensure our team is equipped with the latest skills and knowledge in performance engineering, we recommend investing in a comprehensive training program. As a result, our team will be enabled to proactively address performance issues, effectively use new tools, and drive continuous improvement in our application performance."

6. Infrastructure 

Of all the investment areas associated with performance engineering, arguably none are more compelling than infrastructure. It’s not to say that the others aren’t as important - it’s just that a fine-tuned infrastructure can pay measurable & immediate dividends. For example, if your application’s cloud infrastructure is inefficient, it’ll rapidly accumulate AWS or Azure costs. We’ve had engagements where we end up saving the client almost 10 times as much as what they spent on our services and upgrades. Deploying new servers, load balancers, and other upgrades isn’t easy - but it can dramatically improve application performance (all while saving on cloud spend). 

If this is something you’re looking for advice on, you’re welcome to book a call with our architects to discuss participating in our free Cloud Assessment. 

Sample Objective Statement for Infrastructure:"To enhance the efficiency and reliability of our applications, we propose upgrading our IT infrastructure. This will involve investing in modern servers, networking equipment, and cloud services to reduce latency, improve scalability, and support high-traffic periods, ultimately leading to better application performance and user satisfaction."

Key Business Needs & Target Outcomes

Up to this point, we’ve briefly examined the most common investment areas relating to performance engineering. Now, let’s review how these investments can map to concrete business & technical value. 

Ensuring Application Stability (ie. Risk Reduction)

Application stability is crucial for maintaining user trust and avoiding revenue loss. Downtime and performance bottlenecks directly impact your bottom line. Investments in performance engineering, such as hiring Performance Engineers or utilizing managed services, can ensure that your applications run smoothly and are less prone to failures.

• Key Action: Calculate the cost of downtime per hour for your organization to quantify the financial impact of application instability. Weigh that against the proposed request for funding. 
• Measurable Outcomes: “Maintain an SLA of 99.999% uptime vs. 99.9%; reflecting an 8.5 hour difference per year”

Enhancing Customer Experience

Fast, reliable applications enhance customer satisfaction, leading to increased user engagement and retention. Performance engineering ensures that applications perform optimally under varying loads, meeting user expectations consistently. Satisfied customers are more likely to remain loyal and recommend the service to others, driving growth.

• Key Action: Measure customer satisfaction scores and track how performance improvements correlate with higher customer retention rates.
• Measurable Outcomes: “Increase CSAT scores to [target] measurement, leading to _% increase in monetization rate and a $_ increase in revenue per month.”

Optimizing Operational Efficiency

Performance engineering streamlines operations by reducing the need for manual intervention, which cuts down on operational costs. Automated performance testing and monitoring facilitate proactive issue resolution, contributing to overall efficiency. Efficient operations allow businesses to allocate resources more effectively and focus on innovation.

• Key Action: For investments in tooling, identify and quantify productivity gains from automating performance testing and monitoring processes. For initiatives to reduce cloud spend, calculate the potential cost savings per month & per year once optimization is completed. 
• Measurable Outcome: “Decrease monthly cloud spend by $_, leading to a total cost savings of $_ per year after the cloud optimization project is completed”

Creating a Business Case

To secure funding for performance engineering, it is essential to present a well-structured business case that resonates with executive stakeholders. Here’s how to frame it:

Current State

Outline the existing performance challenges, potential risks, and their impact on the business. Use metrics and data to highlight the severity and urgency of these issues. It’s also ideal if you have a key project that you can tie the investment to (such as an enterprise app migration or the launch of a new product). 

• Key Action: Identify and quantify the performance issues and their financial impact.
• Example: "Our current application performance is causing significant downtime, which has resulted in an average of 10 hours of downtime per month. This downtime leads to an estimated revenue loss of $50,000 monthly and damages our brand reputation."

Potential Impacts

Describe the negative consequences of not addressing performance issues. This includes potential revenue loss, customer dissatisfaction, and increased operational costs.

• Key Action: Highlight the risks and negative consequences of inaction.
• Example: "If we do not address these performance issues, we risk continued revenue loss, a decline in customer satisfaction, and potential loss of market share. Additionally, our operational costs are likely to increase due to inefficiencies and reactive troubleshooting."

Future State

Illustrate the envisioned improvements and the benefits of implementing a robust performance engineering practice. Highlight how these changes will positively impact the business.

• Key Action: Define the goals and benefits of the proposed investment.
• Example: "By investing in performance engineering, we aim to reduce downtime to less than one hour per month, significantly improve customer satisfaction, and decrease operational costs through automation and proactive issue resolution."

Positive Outcomes

Emphasize the anticipated benefits, such as higher system reliability, improved customer satisfaction, and operational efficiency. Use case studies or examples from similar organizations to support your points.

• Key Action: Use relevant case studies or benchmarks to illustrate expected outcomes.
• Example: "A similar investment in performance engineering at [Example Company] led to a 40% reduction in downtime and a 25% increase in customer satisfaction scores. We anticipate similar results, leading to increased customer loyalty and reduced operational costs."

Requirements

Detail the resources needed, including personnel, tools, and training. Provide a clear budget and timeline for the proposed initiatives.

• Key Action: Specify the required resources, features, capabilities and budget.
• Example: "To achieve these improvements, we need to hire a dedicated Performance Engineer, invest in advanced performance testing tools, and provide ongoing training for our team. The estimated budget for these initiatives is $200,000 over the next year."

Metrics & KPIs

Identify key performance indicators (KPIs) to measure success, such as system uptime, response times, cost savings, and customer satisfaction scores. Ensure these metrics align with overall business objectives.

• Key Action: Define and align KPIs with business objectives.
• Example: "We will measure success through the following KPIs: system uptime (targeting 99.999%), customer satisfaction scores (aiming for a 10% increase), and cost savings (projected at $100,000 annually from reduced downtime and operational efficiencies)."

Review of Potential Options

At a minimum, you have two options: do nothing, or adopt a new solution. However, it’s important to consider multiple solutions and benchmark them against each other based on factors like functionality, capabilities, quality, cost, and so on. Let’s say you’ve just completed an evaluation of three different staffing partners.

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Be sure to assign grades or scores based on your requirements - and concisely explain why certain providers may have been removed from consideration. Executives will want to see that their teams evaluated more than one solution (even if that solution seems to be an ideal fit).

Project Plan for Recommended Solution

Executive stakeholders will also expect their direct reports to have a concrete action plan for implementing the requested solution. If it’s for something like managed services or contractors, this can consist of a simple outline of next steps which will likely be provided by your partner. If it’s for something like a tooling implementation, be sure to include a brief overview of a project plan for implementation, configuration, training, etc. 

Engage with Perform

If you need assistance in building your business case or implementing performance engineering solutions, Perform offers a range of services and expertise to help you achieve your goals. Our team of performance architects and engineers are ready to partner with you to drive improvements in application performance, customer satisfaction, and operational efficiency. Contact us today to learn more about how we can support your performance engineering initiatives.

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