I’m sure Daniel Kahneman has defined this fallacy in better terms, but it is a good story to show one of the potential reasons why the concept of DevOps and Lean are so valuable. And also why certain types of IT business are profitable and others eek by on small margins.
When you decide you want to put in a new lawn, rarely will you find yourself starting your search by looking for the “cheapest” option. Your first inclination is to find the most attractive or appealing lawn you can find. You may set a budget and search within that criteria, but more often then not, you settle on something that is at the upper end of that scale. You want something nice. The choice of purchase leans towards the aesthetics (and in many senses) the outcome you want to achieve – a nice attractive lawn.
Then phase two happens – someone has to mow it, fertilize it, and care for it. This is an operational process that goes on over time, all in parallel to your day-to-day life. As time passes, that operational process is subject to your emotional and financial ups and downs, and resource availability. When money is scarce, you try to save and maybe skimp on how often you fertilize that lawn or mow it. When times are flush you might re-patch that section that went brown when a dog decided it was a nice spot for a bio-break. Cost, effort, and resource management become your focus, with cost being the one item that shows up time and time again (aside from those recurring brown spots).
The original image of what you were buying when you purchased the sod to make your lawn beautiful affected your purchase decision, and your willingness to “spend a bit more” to get what you wanted. That willingness to put out money went away when you got to the operational aspect of that lawn because it was subject to the ups and downs of real life.
If the parallel to IT build and operations is not apparent, then let me illustrate.
Companies will be enamored with the image of a beautiful new system, complete with beautiful interfaces, fantastic business processes and workflows, and a few colorful blinky lights thrown in for good measure. They will pay a premium dollar to achieve that outcome because their eye is on the outcome and opportunity that they see. They are making decisions from a macro view of opportunity (what money am I going to make from all this goodness) and cost (what is my view of capital investment to achieve all this goodness).
With the system now installed, the company goes through its ups and downs. The original opportunity sees its ups and downs with revenue being variable over time due to economic conditions or customer satisfaction issues. Company revenue also is affected, and the picture of spend now changes. The focus is how to squeeze a few more pennies out of day-to-day operations, how to be more efficient, and how many brown spots can we tolerate in our lawn.
The lessons to learn from this story:
- When looking at an opportunity, recognize the bias you have towards thinking that it has one state, and that state involves a big celebration of its success and the money it earned – all at a single point in time. That thinking is not about its ongoing lifecycle and that opportunities live, breath, change, grow, turn brown, and require careful care and feeding.
- In the world of rapid development and Agile (and for the most part DevOps) systems are not permanent. They evolve, change, and adjust to the world at hand which can reduce the bias. While the initial standup of an IT system (just like putting in a new lawn) has upfront work, it is an ever evolving system that changes over time. Even your lawn goes through evolution (weather changes, adjustments to allow for those rose bushes, or patches to those designer dog markings).
- In the world of DevOps, operations comes with the development. They are inextricably intertwined (or should be). This means development, new ideas, and new features go up and down with the fortunes of the company as well. Decisions are made as a whole – considering the new opportunity *and* the current operation of the system. Efficiency is evaluated as a system, rather than in discrete parts. Even a lawn can be managed this way – with incremental change such as increases in a capital spend (weather driven sprinklers) that can reduce an operational spend (water costs).
The moral to the story is that different phases in the lifecycle of your IT induce different spending biases. These can lead to overspend in implementation, and underspend in operations. An awareness of this bias, and the use of an evolutionary and incremental view of systems can positively affect those patterns. Consider them…
And as a careful aside, if you are selling IT services and systems to customers, recognize where the spending bias occurs in this cycle (and hence where margin lies).
