{"id":10296,"date":"2022-02-02T09:10:10","date_gmt":"2022-02-02T09:10:10","guid":{"rendered":"https:\/\/ee.yelkdev.site\/?p=10296"},"modified":"2024-03-28T13:54:04","modified_gmt":"2024-03-28T13:54:04","slug":"5-ways-to-minimise-your-run-costs-with-you-build-it-you-run-it","status":"publish","type":"post","link":"https:\/\/www.equalexperts.com\/blog\/our-thinking\/5-ways-to-minimise-your-run-costs-with-you-build-it-you-run-it\/","title":{"rendered":"5 ways to minimise your run costs with You Build It You Run It"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">You\u2019ve probably heard of <\/span><a href=\"https:\/\/www.equalexperts.com\/our-services\/deliver\/you-build-it-you-run-it\"><span style=\"font-weight: 400;\">You Build It You Run It<\/span><\/a><span style=\"font-weight: 400;\"> before. It\u2019s an operating model that empowers product teams to own every aspect of digital service management. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">When done well, it accelerates your time to market, increases your service reliability, and grows a learning culture. There are also some pitfalls, which can drain the confidence of your senior leadership, and ultimately put the success of You Build It You Run It at risk.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Today I would like to focus on one of the pitfalls that often stops projects from getting off the ground. The <\/span><a href=\"https:\/\/playbooks.equalexperts.com\/you-build-it-you-run-it\/pitfalls#linear-run-costs\"><span style=\"font-weight: 400;\">run cost pitfall<\/span><\/a><span style=\"font-weight: 400;\">. This is part of our recent <\/span><a href=\"https:\/\/www.equalexperts.com\/playbooks\/you-build-it-you-run-it\"><span style=\"font-weight: 400;\">You Build It You Run It playbook<\/span><\/a><span style=\"font-weight: 400;\">, we take a deeper look at the risk of on-call costs becoming uncontrollable, and how y<\/span><span style=\"font-weight: 400;\">ou can guard against it, and even escape it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019re in a hurry, our ways to minimise run costs are:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Understand an operating model is multi-cost insurance for business outcomes<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Make product team budget holders accountable for business outcomes<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fund on-call costs from product team budgets<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Select availability targets on financial exposure<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Select out of hours schedules on financial exposure<\/span><\/li>\n<\/ol>\n<h2>The run cost pitfall<\/h2>\n<p><span style=\"font-weight: 400;\">If you work in a large enterprise organisation, you\u2019re probably familiar with the traditional IT operating model. You\u2019ll have a multi-level support hierarchy, with an L1 operations bridge team for monitoring, and an L2 application support team for incident response. Each day, an application support analyst is on-call out of hours.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The names of these teams change, but the operating model doesn\u2019t. It\u2019s so ubiquitous, it doesn\u2019t really have a name of its own! In our playbook, we call it <\/span><a href=\"https:\/\/playbooks.equalexperts.com\/you-build-it-you-run-it\/what-is-ops-run-it\"><span style=\"font-weight: 400;\">Ops Run It<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<img decoding=\"async\" class=\"alignnone wp-image-10617 size-full\" src=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_8.png\" alt=\"\" width=\"2013\" height=\"1175\" srcset=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_8.png 2013w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_8-300x175.png 300w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_8-1200x700.png 1200w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_8-768x448.png 768w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_8-1536x897.png 1536w\" sizes=\"(max-width: 2013px) 100vw, 2013px\" \/>\n<p><span style=\"font-weight: 400;\">This operating model has a clear benefit in run cost management, due to:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><i><span style=\"font-weight: 400;\">Low on-call standby costs<\/span><\/i><span style=\"font-weight: 400;\">. You can have one application support analyst on-call for all your software services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><i><span style=\"font-weight: 400;\">Low team costs<\/span><\/i><span style=\"font-weight: 400;\">. You can outsource your operations bridge and application support teams to a third-party managed service.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><i><span style=\"font-weight: 400;\">Predictable forecasting<\/span><\/i><span style=\"font-weight: 400;\">. You can confidently estimate on-call costs a year in advance.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">I\u2019ll bet your Head of Operations likes this benefit, as they\u2019ll be responsible for run costs in a strained opex budget. Bethan and I believe it justifies this operating model for foundational systems such as self-hosted COTS and back-office applications.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You can see from this diagram, You Build It You Run It is a superior choice for digital services. It can achieve the throughput, reliability, and learning outcomes you need to sustain innovation.<\/span><\/p>\n<img decoding=\"async\" class=\"alignnone wp-image-10618 size-full\" src=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_3.png\" alt=\"\" width=\"2014\" height=\"1668\" srcset=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_3.png 2014w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_3-300x248.png 300w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_3-1200x994.png 1200w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_3-768x636.png 768w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_3-1536x1272.png 1536w\" sizes=\"(max-width: 2014px) 100vw, 2014px\" \/>\n<p><span style=\"font-weight: 400;\">However, your senior leadership may have a perception that You Build It You Run It is too expensive. It\u2019s understandable. Four developers on L1 on-call for four services doesn\u2019t seem to make financial sense, does it? Especially not when compared with one L2 on-call application support analyst for four services. And what if you have 10 teams and 20 digital services?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bethan and I call this the run cost pitfall &#8211; allowing run cost to increase every time you have a new product team on-call for a new digital service. Now, it\u2019s important to pay developers for L1 on-call in You Build It You Run It, to recognise the inconvenience of out-of-hours support, and we\u2019ve got some advice on <\/span><a href=\"https:\/\/playbooks.equalexperts.com\/you-build-it-you-run-it\/practices\/governance#ensure-fair-remuneration-for-on-call-developers\"><span style=\"font-weight: 400;\">transparent, fair remuneration<\/span><\/a><span style=\"font-weight: 400;\"> but that doesn\u2019t mean a high run cost is inevitable at scale.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are five ways to mitigate run costs, without sacrificing on-call compensation or operability incentives for your product teams.\u00a0<\/span><\/p>\n<h2>1 &#8211; Understand an operating model is multi-cost insurance for business outcomes<\/h2>\n<p><span style=\"font-weight: 400;\">Ensure there\u2019s a broad understanding across your organisation that an operating model is an insurance policy. One which protects your business outcomes in exchange for a multi-cost premium.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Different insurance policies offer different levels of protection, at different premiums. And we all understand that the more valuable the contents of your home, the higher the premium you pay for your house insurance. See <\/span><a href=\"https:\/\/playbooks.equalexperts.com\/you-build-it-you-run-it\/principles#operating-models-are-insurance-for-business-outcomes\"><span style=\"font-weight: 400;\">operating models are insurance for business outcomes<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The multi-cost premium for an operating model is:<\/span><\/p>\n<img decoding=\"async\" class=\"alignnone wp-image-10624 size-large\" src=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2010\/10\/YBIYRI-Blog-4-table_1-1200x500.jpg\" alt=\"\" width=\"1200\" height=\"500\" \/>\n<p><span style=\"font-weight: 400;\">You Build It You Run It produces a similar run cost to an application support team. Setup cost is still a concern, but that\u2019s offset by lower transition, incident, and opportunity costs. Here\u2019s a diagram of our relative cost estimates.<\/span><\/p>\n<img decoding=\"async\" class=\"alignnone wp-image-10619 size-large\" src=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_5-1200x937.png\" alt=\"\" width=\"1200\" height=\"937\" \/>\n<h2>2 &#8211; Make product team budget holders accountable for business outcomes<\/h2>\n<p><span style=\"font-weight: 400;\">Make the budget holder for a digital service accountable for deployment throughput, service reliability, and learning culture. That\u2019ll be your Head of Product if team funding comes from a product budget, or your Head of Delivery if funding is from an IT budget. This encourages product teams to find the right balance between product features, operational features, and engineering effort.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your Head of Operations has to transfer accountability for the reliability of all digital services onto product team budget holders. In my experience, operability incentives are maximised for a product team when they are held to account for reliability. For more on this, see <\/span><a href=\"https:\/\/playbooks.equalexperts.com\/you-build-it-you-run-it\/practices\/governance#make-product-team-budget-holders-accountable-for-business-outcomes\"><span style=\"font-weight: 400;\">make product team budget holders accountable for business outcomes<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h2>3 &#8211; Fund on-call costs from product team budgets<\/h2>\n<p><span style=\"font-weight: 400;\">Pay on-call costs from product team budgets. This incentivises product team budget holders to choose availability targets that balance business outcomes insurance with run costs. It also allows them to prioritise the protection of live product functionality alongside the delivery of new product features. And, it ensures that graceful degradation and adaptability are part of the customer experience.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your Head of Operations transfers on-call funding for digital services from their opex budget into the distinct capex budgets owned by product team budget holders. This won\u2019t be easy, it won\u2019t be popular, and you need to do it. Good things happen when you empower product teams to incorporate funding choices into their decision making. For more detail, see <\/span><a href=\"https:\/\/playbooks.equalexperts.com\/you-build-it-you-run-it\/practices\/governance#fund-on-call-costs-from-product-team-budgets\"><span style=\"font-weight: 400;\">fund on-call costs from product team budgets<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<h2>4 &#8211; Select an availability target on financial exposure<\/h2>\n<p><span style=\"font-weight: 400;\">Ensure a product team budget holder selects an availability target for their digital service, based on its financial exposure. That\u2019s the maximum revenue loss and operational costs per hour that could be incurred upon failure. This encourages a product team budget holder to translate business goals into operability objectives, and build operability in from the outset.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Selecting availability targets and deployment targets for different software services is often a dark art. It doesn\u2019t have to be that way. See <\/span><a href=\"https:\/\/www.equalexperts.com\/blog\/our-thinking\/how-to-decide-when-to-use-you-build-it-you-run-it-and-when-not-to-use-it\/\"><i><span style=\"font-weight: 400;\">How to decide when to use You Build It You Run It &#8211; and when not to use it<\/span><\/i><\/a><span style=\"font-weight: 400;\"> for a step-by-step guide on how to estimate financial exposure, and consequently select a matching availability target.\u00a0<\/span><\/p>\n<h2>5 &#8211; Select out of hours schedules on financial exposure<\/h2>\n<p><span style=\"font-weight: 400;\">Our fifth and final way to minimise your run costs is to link availability targets to different types of on-call schedules out of hours, based on financial exposure. This achieves a balance between the cost of failure, on-call costs, and remuneration for on-call developers without weakening operability incentives.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You Build It You Run It protects business outcomes. It doesn\u2019t mean every digital service needs 24&#215;7 on-call support. During working hours, every product team has its own on-call schedule. Out of hours, it\u2019s a different story.\u00a0<\/span><\/p>\n<img decoding=\"async\" class=\"alignnone wp-image-10623 size-full\" src=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2010\/10\/YBIYRI-Blog-4-table_2.jpg\" alt=\"\" width=\"1920\" height=\"800\" srcset=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2010\/10\/YBIYRI-Blog-4-table_2.jpg 1920w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2010\/10\/YBIYRI-Blog-4-table_2-300x125.jpg 300w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2010\/10\/YBIYRI-Blog-4-table_2-1200x500.jpg 1200w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2010\/10\/YBIYRI-Blog-4-table_2-768x320.jpg 768w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2010\/10\/YBIYRI-Blog-4-table_2-1536x640.jpg 1536w\" sizes=\"(max-width: 1920px) 100vw, 1920px\" \/>\n<p><span style=\"font-weight: 400;\">Here\u2019s what You Build It You Run It might look like in your organisation, if you\u2019ve got multiple product teams owning digital services with varying levels of financial exposure.\u00a0<\/span><\/p>\n<img decoding=\"async\" class=\"alignnone wp-image-10620 size-full\" src=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_18.png\" alt=\"\" width=\"2257\" height=\"1725\" srcset=\"https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_18.png 2257w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_18-300x229.png 300w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_18-1200x917.png 1200w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_18-768x587.png 768w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_18-1536x1174.png 1536w, https:\/\/www.equalexperts.com\/wp-content\/uploads\/2022\/02\/YBIYRI-Blog-4-Figure_18-2048x1565.png 2048w\" sizes=\"(max-width: 2257px) 100vw, 2257px\" \/>\n<p><em><span style=\"font-weight: 400;\">To find out more, you can continue our You Build It You Run It pitfalls series:<\/span><\/em><\/p>\n<ol>\n<li style=\"list-style-type: none;\">\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.equalexperts.com\/blog\/our-thinking\/7-pitfalls-to-avoid-with-you-build-it-you-run-it\/\"><span style=\"font-weight: 400;\">7 pitfalls to avoid with You Build It You Run It<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">5 ways to minimise your run costs with You Build It You Run It<\/span><span style=\"font-weight: 400;\"> &#8211; <strong>you are here!<\/strong><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.equalexperts.com\/blog\/our-thinking\/why-your-head-of-operations-shouldnt-be-accountable-for-digital-reliability\/\">Why your operations manager shouldn\u2019t be accountable for digital reliability<\/a>\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.equalexperts.com\/blog\/our-thinking\/how-to-manage-bau-in-product-teams\/\">How to manage BAU in product teams<\/a>\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.equalexperts.com\/blog\/our-thinking\/4-ways-to-remove-the-treacle-in-change-management\/\"><span style=\"font-weight: 400;\">4 ways to remove the treacle in change management\u00a0<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.equalexperts.com\/blog\/our-thinking\/why-product-teams-still-need-major-incident-management\/\"><span style=\"font-weight: 400;\">Why product teams still need major incident management<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.equalexperts.com\/blog\/our-thinking\/stop-trying-to-embed-specialists-in-every-product-team-2\/\"><span style=\"font-weight: 400;\">Stop trying to embed specialists in every product team\u00a0<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.equalexperts.com\/blog\/our-thinking\/how-to-avoid-developer-burnout-on-call\/\"><span style=\"font-weight: 400;\">How to avoid developer burnout on call<\/span><\/a><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">Our <\/span><a href=\"https:\/\/www.equalexperts.com\/our-services\/deliver\/you-build-it-you-run-it\/\"><span style=\"font-weight: 400;\">You Build It You Run It<\/span><\/a><span style=\"font-weight: 400;\"> page has loads of resources on on-call product teams &#8211; case studies, conference talks, in-depth articles, and more. Plus our <\/span><a href=\"https:\/\/www.equalexperts.com\/playbooks\/you-build-it-you-run-it\"><span style=\"font-weight: 400;\">You Build It You Run It playbook<\/span><\/a><span style=\"font-weight: 400;\"> gives you a deep dive into how to make it happen! Get in touch, and let us know what you think.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The traditional approach to operations doesn\u2019t help organisations to sustain innovation. You Build It You Run can \u2013 if done correctly.  Here we take a look at the run cost pitfall, and recommend how to avoid it<\/p>\n","protected":false},"author":157,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[5],"tags":[222],"location":[397],"class_list":["post-10296","post","type-post","status-publish","format-standard","hentry","category-our-thinking","tag-youbuildityourunit"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.9 (Yoast SEO v25.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>5 ways to minimise your run costs with You Build It You Run It | Equal Experts<\/title>\n<meta name=\"description\" content=\"You Build It You Run It can successfully sustain innovation \u2013 if done correctly. 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