The ROI of investing into Developer Experience

Making developers happy

At DX Heroes we're doing our best to make developers happy, which has been and still is one of our main taglines, as the core principle of Developer Experience. But did you know that you could directly impact and shape your products' ROI, or the ROI of your customers if you decide to focus on developer experience?

Following Netlify, which is a great example of a company with excellent developer experience offering the fastest way to build, scale, and deploy modern web applications, where an independent study concluded with an impressive 151% ROI. [1] Or perhaps looking at one of the most used developer tools – Postman, with an incredible ROI of 339%. [2] And even GitHub with 433%! [3] There is no doubt that developer experience can have a positive impact on all levels of the company's cost infrastructure.

From improved employee retention rates to increased productivity, more innovation, better products, and improved customer satisfaction, we'll take a peek at how investing in DX is not only the right thing to do for your developers but also a smart business decision.

Employee retention rates

Bearing in mind the aforementioned tagline, it is no surprise that one of the biggest cost-saving measures and ROI-driving metrics at your company might actually be how well you're able to retain your employees.

With stretched processes, unproductive setups, too many or unnecessary ceremonies, inefficient developer tooling, or even just a missing internal developer platform, your developers might feel frustrated, and tired and even without your knowledge might be considering a change. Not only do all of these play a decisive factor in the retention of your developers, but also their productivity and ability to deliver an ROI for themselves.

Increasing productivity

Streamlining your development workflows. creating easy-to-adapt environments and supplying your developers with enough time and space for creative problem-solving (or we could call it having fun at work) will lead to faster time to market, faster integrations, and increased ROI.

Aim towards decreasing necessary training time, and implement knowledge sharing processes for the levels of developers you employ. Invest in developer tooling and constantly build and improve upon your internal developer platform. Maintain detailed documentation within your company and last but not least listen for feedback and ideas from your own employees.

This begins the moment you are onboarding your employees, not later or after finding out about their unhappiness. As with Postman, who've seen a staggering 75% reduction in developer onboarding processes – making the onboarding quick, easy to navigate, and most importantly minimizing the time it takes the developer to start contributing and adding value to your product – immediately increasing your product's ROI and its real value.

Innovation and customer value

Having good internal processes and investing in developer experience will inevitably result in less time spent on product maintenance, developer training, onboarding, and many other areas, which may or may not even be related to development. This in practice leads to higher quality development time and an immediately visible ROI at the level of your employees.

Not only that, it drives innovation. With less time spent on tedious, chore-like tasks and in meetings or unnecessary ceremonies – your developers will appreciate each and every minute of actual coding and problem-solving. Resulting in a more positive mindset for work and allowing for more time to be spent on figuring out and implementing one of those “nice-to-haves” that were stuck in the endless backlog.

We can observe that focusing on and investing in developer experience can also increase product launch velocity from tens to a hundred percent, decrease the time it takes to hit the market, and consecutively the time it takes for your product to start delivering any kind of customer value and with it also the much valuable customer feedback. This is especially crucial during market research and testing, but even more so valuable if you're able to promptly act upon customer feedback or requested features.

Customer satisfaction

There are many examples of companies that have successfully improved customer satisfaction through positive DX initiatives. Airbnb [4], for example, was able to improve its customer satisfaction by redesigning its internal tools and providing developers with better resources and support. By focusing on improving the experience of their developers, Airbnb was able to deliver a better experience to its users, resulting in increased customer satisfaction.

To improve customer satisfaction through DX, companies should prioritize user experience and usability, use customer feedback to inform development priorities, and invest in quality assurance and testing. By measuring and tracking customer satisfaction metrics, companies can evaluate the impact of their DX initiatives on customer satisfaction and make data-driven decisions to improve their products and services.

Improved customer satisfaction has many benefits, including increased customer loyalty, positive word-of-mouth (one of the main channels developers make their work or tool-related decisions), and higher revenue. By investing in positive DX, companies can create a virtuous cycle of customer satisfaction and business success.

Calculating an ROI

Some readers might be wondering where to start, to even be considering an ROI based on investing in developer experience. You could just follow this basic framework:

Determine your goals and metrics, this could be reducing turnover, improving product quality, or other KPIs that are important to your organization
Estimate the cost of the initiative, which may include things like providing training, implementing new tools or platforms, or purchasing licensing for existing tooling
Estimate the benefits, this means collecting data and measuring the outcomes of the initiative and how well it impacted the structure of your organization
Calculate an ROI, to simplify you could just subtract the cost of the initiative from the benefits and divide by the cost, eg. ROI = (Total benefits - Total costs) / Total costs

Keep in mind that the ROI can also be negative, which would signal that the costs outweigh your measured benefits. Worry not, as this is a process in itself and you can re-evaluate your approach and re-adjust the initiative.

Takeaways

In conclusion, investing in DX can have a significant ROI for companies and their customers as well. However, investing in DX requires a commitment from companies. They must be willing to invest in the necessary resources, processes, and cultural changes to create a supportive and empowering work environment for their developers and customers alike. Additionally, companies must be willing to make data-driven decisions to evaluate the impact of their DX initiatives and make improvements as needed.

Despite the challenges of investing in DX, the potential ROI makes it a worthwhile investment. As the software industry continues to evolve, companies that prioritize positive DX will be better positioned to adapt to new challenges and opportunities. By embracing positive DX, companies can create a more inclusive, innovative, and sustainable future for the software development industry.

Are you ready to start seeing the ROI benefits of investing in your developer experience? Get in touch with us today and we can discuss how to help you implement your own DX initiative that meets the needs of your organization and drives business results.