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How high-performing IT departments affect their companies' bottom line

Many of us in the tech industry have suspected for a long time that companies that have great IT departments perform a lot better in this technology-dependent world we live in. But I was unaware if anyone had ever done any research into how high-functioning IT translated to the bottom line. The latest Puppet Labs survey does just this. As a result, don’t be surprised if Kramer doesn’t start advising investors to monitor IT function.

This year’s survey results represent analysis of more than 9,200 respondents, over twice as many as last year. Also, for those in the enterprise who aren’t ready for the DevOps space, 42% of respondents were from organizations with more than 500 employees. Fully 15% had more than 10,000 employees. To be sure, the survey results are still skewed towards technology and web companies, which represent 33% or so of the respondents. That being said, it still leaves the majority of companies participating as non-tech companies.

So if high-performing IT companies are more profitable, what exactly does high-performing mean? Good question. The Puppet folks say this helps define it:

Three major factors that contribute to organizational performance:

  1. Our data shows that IT performance and well-know DevOps practices, such as those that enable continuous delivery, are predictive of organizational performance. As IT performance increases, profitability, market share and productivity also increase. IT is a competitive advantage, not just a utility, and it’s more critical now than ever to invest in IT performance. In the following sections, we’ll discuss which practices deliver business value and drive overall organizational performance.
  2. . DevOps has always been about culture, not just about tools and processes. We found that the cultural practices and norms that characterize high-trust organizations — good information flow, cross-functional collaboration, shared responsibilities, learning from failures and encouragement of new ideas — are the same as those at the heart of DevOps. That helps explain why DevOps practices correlate so strongly with high organizational performance.
  3. A breakthrough finding was that job satisfaction is the No. 1 predictor of organizational performance. Job satisfaction also highly correlates with DevOps practices and culture. Just as some suggest that happy cows make better cheese, DevOps practices increase employee satisfaction, which leads to better business outcomes.

You can read the report for more information on what is involved in high-performance IT organizations, but without giving you too much of a spoiler let me point out:

  • Continuous Delivery
  • Version Control
  • Automated testing
  • Monitoring system and application health

At some point, it is easy to get caught up in the whole DevOps thing and say is this a case of hammers looking at nails. That is to say a survey by a DevOps company shows that DevOps can transform business. Gee, what a surprise.

But I would caution you not to jump to that conclusion with this survey and report. First of all, some of the folks involved with the survey like, Gene Kim, Jez Humble, and Dr. Nicole Forsgren Velasquez, are researchers at heart who have been looking for a big enough base of metrics from which to draw conclusions. Secondly, put the DevOps stuff to the side for a moment. Don’t you agree that employee satisfaction and high-performing teams translate to better corporate performance? I always felt that to be true.

In any event, I don’t want to just reprint each section of the report here. What I want to do is tell you it is worth the time to go download the report for yourself and take a quick read. There are some valuable lessons for all of us there, not just you stock investors out there.

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