CFOtech Asia - Technology news for CFOs & financial decision-makers

Story image

Why observability is key to delivering core business goals in Asia

As consumers and businesses alike begin 2023 with an uncertain economic outlook, technology investment may not be top of mind for companies seeking to boost financial growth.

As Gartner distinguished VP analyst John-David Lovelock explained in a recent research note, conventional wisdom calls for reducing costs, including on technology, in a deteriorating economy. But Lovelock goes on to say that economic turbulence will change the context for technology investments; with spending set to increase in some areas and decline in others. Overall, he expects worldwide IT spending to hit USD $4.6 trillion in 2023, up 5.1% from 2022.

When it comes to best-of-breed technology investments, studies have uncovered that observability delivers optimal business value. One such study is the New Relic 2022 Observability Forecast, which found that almost half (45.8%) of respondents in ASEAN cited increased operational efficiency as observability’s primary benefit.

While this is the case, the perceived cost of adoption means that technology teams may feel uncertain about how to effectively communicate observability’s value to the C-suite. There are three key reasons that should underpin any business case.

1. Increased developer productivity

Over a third (34.4%) of ASEAN respondents in the Observability Forecast said that they apply observability to automate software release cycles, increase speed to market for new products or services, and optimise cloud resource usage and spending.

Traditional monitoring has been the domain of operations for decades, but it creates a walled garden between developers and operations, with developers not having access to the vital information necessary to understand how applications are behaving once deployed.

Observability eliminates this walled garden by creating a single source of truth and a shared understanding of software environments throughout the software development lifecycle. It provides developers and operations with a consistent view of runtime environments as software makes its way through the development process. 

Instead of toggling between different systems and having a siloed view of each component in the tech stack, observability allows developers to have a comprehensive view, and this enables them to work in a state of cohesion with the rest of the organisation.

This idea is best described as Full Lifecycle Observability - or FLO. FLO saves developers valuable time by enabling them to identify and remediate software problems early in the development lifecycle to avoid production incidents.

The Observability Forecast revealed that 42.7% of ASEAN respondents said they apply observability to support digital transformation efforts to improve and gain a competitive advantage, and FLO sits at the heart of this advantage.

2. Uncovering cost savings

In the current climate, many IT budgets in Asia are slowing, if not contracting. Teams must act smarter and use data to prioritise activities that align to changing economic conditions. When used proactively, observability can help organisations uncover significant cost savings.

Take the public cloud as an example. Because it makes up a large proportion of IT budgets, a minor reduction in resource consumption can result in significant cost savings. Identifying these opportunities can be achieved with observed experiments and simulations.

For example, one can form a hypothesis that says allocation of existing cloud resources for a particular environment can be tuned down with no material impact to customer experience. Through a controlled experiment or simulation this process can be observed and the data analysed to conclude whether to support or reject the hypothesis.

Of course, before an experiment can be designed, a high-value target must be identified. Observability can help identify these targets by measuring cloud resource utilisation. A simple way of uncovering under-utilised resources is to broadly measure resource utilisation at high percentiles and sort the results from lowest to highest consumption. This simple step will rank resources that represent the best opportunities to either reduce resource allocations or consolidate resources. Together, these simple approaches to observability can generate immediate opportunities to uncover cost savings.

3. Enabling tool consolidation

The evolution of monitoring over the course of the past two decades has proven to be a double edge sword for technology teams. While these tools have effectively plugged gaps in the capability of legacy tooling to support an evolving technology landscape, few organisations have the appetite needed to retrofit newer tools to support legacy environments; causing widespread tool fragmentation.

Such fragmentation has resulted in teams feeling overwhelmed by the vast ocean of tools that they have adopted, which has a direct impact on their ability to effectively monitor, troubleshoot and debug issues. These concerns are supported by findings in the Observability Forecast, which revealed that on average, organisations were using seven monitoring tools.

In ASEAN, half of all respondents said that they learned about software and system interruptions through multiple monitoring tools. What’s more, each of these tools have some functional overlap, which leads to higher tooling and maintenance costs.

As a subset of observability, monitoring has a crucial part to play in supporting modern technology teams. By moving to a single observability platform where monitoring tooling is consolidated, these teams are able to have greater levels of visibility and understanding into how both legacy and modern environments are performing, as well as how that performance impacts the customer experience.

While the economic downturn has been very swift, every downturn has a sharp upturn, and organisations must be ready for it. The uptick is potentially going to be just as rapid. Consolidating tooling during the downturn and investing in observability will allow growth opportunities to be captured as the economy recovers.

As Gartner VP analyst Daniel Sanchez-Reina recently said: “The pressure on CIOs to deliver digital dividends is higher than ever”. If systems can’t cope, customers will look elsewhere. The companies who invest in observability during this time will be ready to seize on opportunities now and into the future.

Follow us on:
© 2023 Techday, All rights reserved. Hosted on Plan B's Cloud Services. DMARC protection by PowerDMARC.