OSS diamonds are forever (part 2)

Wednesday’s post discussed how OPEX is forever, just like the slogan for diamonds.
 
As discussed, some aspects of Operational Expenses are well known when kicking off a new OSS project (eg annual OSS license / support costs). Others can slip through the cracks – what I referred to as OPEX leakage (eg third-party software, ongoing maintenance of software customisations).
 
OPEX leakage might be an unfair phrase. If there’s a clear line of sight from the expenses to a profitable return, then it’s not leakage. If costs (of data, re-work, cloud services, applications, etc) are proliferating with no clear benefit, then the term “leakage” is probably fair.
 
I’ve seen examples of Agile and cloud implementation strategies where leakage has occurred. And even the supposedly “cheap” open-source strategies have led to surprises. OPEX leakage has caused project teams to scramble as their financial year progressed and budgets were unexpectedly being exceeded.
 
Oh, and one other observation to share that you may’ve seen examples of, particularly if you’ve worked on OSS in large organisations – Having OPEX incurred by one business unit but the benefit derived by different business units. This can cause significant problems for the people responsible for divisional budgets, even if it’s good for the business as a whole. 
 
Let me explain by example: An operations delivery team needs extralogging capability so they stand up a new open-source tool. They make customisations so that log data can be collected for all of their network types. All log data is then sent to the organisation’s cloud instance. The operations delivery team now owns lifecycle maintenance costs. However, the cost of cloud (compute and storage) and data lake licensing have now escalated but Operations doesn’t foot that bill. They’ve just handed that “forever” budgetary burden to another business unit.
 
The opposite can also be true. The costs of build and maintain might be borne by IT or ops, but the benefits in revenue or CX (customer experience) are gladly accepted by business-facing units.
 
Both types of project could give significant whole-of-company benefit. But the unit doing the funding will tend to choose projects that are less effective if it means their own business unit will derive benefit (especially if individual’s bonuses are tied to those results).
 
OSS can be powerful tools, giving and receiving benefit from many different business units. However, the more OPEX-centric OSS projects that we see today are introducing new challenges to get funded and then supported across their whole life-cycle.
 
PS. Just like diamonds bought at retail prices, there’s a risk that the financials won’t look so great a year after purchase. If that’s the case, you may have to seek justification on intangible benefits.  😉
 
PS2. Check out Robert’s insightful comment to the initial post, including the following question, “I wonder how many OSS procurements are justified on the basis of reducing the Opex only *of the current OSS*, rather than reducing the cost of achieving what the original OSS was created to do? The former is much easier to procure (but may have less benefit to the business). The latter is harder (more difficult analysis to do and change to manage, but payoff potentially much larger).”

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