Software observability: it's not about sunk costs, it's about lost profit

How software observability contributes to the overall business performance

Nowadays, it’s hard to imagine a business that is not dependent on IT. Be it a simple landing page or a complex ERP system, software has become a cornerstone of daily operations and very often the major business driver. It’s not so rare, though, that managers treat applications as a fixed asset: a one time investment that works for years and requires only rare periodical maintenance and upgrades. While it may be true for some basic and static tools, such a simplistic understanding creates a lot of frustration and problems for business managers and software operators alike.

There are several reasons for this. First, software is volatile by nature. It is made up of a bunch of loosely coupled, highly specialized components, which are normally run on a difficult to standardize hardware. Even extremely good applications are prone to periodical random failures and performance degradation. Second, it’s rare nowadays to use just one application. More often we rely on a complex software system consisting of dozens of applications that are not always 100% interoperational. Third, there is always room for overlooked human error or an edge case. Fourth, in the infamous triangle of price-time-quality, the latter is usually sacrificed. And add to this malicious actors, network disruptions, and all the rest of it.

Over the years the industry has developed various approaches to mitigate these factors, but none are a “silver bullet” that can guarantee the software will work flawlessly 100% of the time. And every failure causes downtimes, disrupted operations, “firefighting” and eventually lost profit and reputation that can be much more expensive than the direct costs associated with fixing the problem.
Although we cannot avoid software failures completely, there is a way to predict them and minimize the downtime and remediation costs. To do so we need full visibility of what is happening to our system, as well as being ready to act swiftly and precisely in case of emergency. All tools and activities related to controlling software system health as well as responding to failures and threats, are combined under the common notion of “observability”.

Software observability, from the business perspective, refers to the ability of an organization to gain insights into the performance, health, and behavior of its software systems and act on those insights in a timely and efficient manner. The collection, analysis and visualization of data of various software and hardware stack components ensures that the system operates smoothly and meets business objectives.
Due to its paramount importance, observability involves a very diverse set of measures and activities that proliferate and contribute to every aspect of the business operations. When performed correctly and maintained on a systematic basis, it often requires substantial and regular investments of time and money; but these expenses are offset by better user and employee experience, optimized operational costs, reduced emergency costs, reduction of downtime and lost profit, and stable reputation of the reliable partner. To display that, let’s look into the contribution of several individual constituents of observability to overall business performance.

Performance Monitoring

Objective: Ensure optimal performance of software applications.
Business Impact: Improved user experience, customer satisfaction, and efficient use of resources.

Error Tracking

Objective: Identify and resolve software errors and issues.
Business Impact: Minimize downtime, reduce support costs, and maintain a positive brand image.

Log Analysis

Objective: Analyze logs for troubleshooting, security, and compliance.
Business Impact: Enhance security, meet regulatory requirements, and streamline issue resolution.

Distributed Tracing

Objective: Trace transactions and requests across distributed systems.
Business Impact: Improved understanding of system interactions, faster problem resolution, and enhanced reliability.

Metrics and KPIs

Objective: Track key metrics and Key Performance Indicators (KPIs) for business goals.
Business Impact: Informed decision-making, resource optimization, and alignment with strategic objectives.

Real-time Monitoring

Objective: Monitor software in real-time to detect and respond to issues promptly.
Business Impact: Minimize downtime, improve service availability, and maintain a competitive edge.

Scalability and Capacity Planning

Objective: Plan for future growth and ensure the scalability of software systems.
Business Impact: Cost-effective resource allocation, efficient scaling, and better capacity utilization.

User Experience Monitoring

Objective: Monitor and optimize the end-user experience.
Business Impact: Increased user satisfaction, retention, and positive brand perception.

Cost Optimization

Objective: Optimize resource usage to control infrastructure costs.
Business Impact: Efficient use of resources, reduced operational expenses, and improved profitability.

Predictive Analysis

Objective: Anticipate and mitigate potential issues before they impact the business.
Business Impact: Proactive problem resolution, improved reliability, and enhanced overall performance.

Often overlooked, and having a reputation of a secondary cost center with a fuzzy justification, observability actually has a potential to become a huge competitive advantage when done right. It directly impacts profitability on all levels of business operations and is a crucial aspect for modern businesses, enabling them to maintain reliable, high-performing software systems that align with strategic goals, enhance user satisfaction, and contribute to overall business success.

Learn more about software observability:

Post 2: Prerequisites for building an efficient observability system
Post 3: Coming soon