The Total Economic Impact™ Of Cortex IDP

Cost Savings And Business Benefits Enabled By Cortex

A Forrester Total Economic Impact Study Commissioned By Cortex, July 2024

Software development remains an enormous subset of the broader technology industry — especially as more and more organizations shift away from hardware solutions to take advantage of the cloud and software as a service (SaaS). Despite the massive importance of software development, developer teams are still struggling with decentralized processes around organizing their people and technology. According to a recent Forrester survey, only one in nine surveyed developers said that their organization has a dedicated team focusing on development experience.1 Organizations that take steps to improve the developer experience in a way that promotes positive business outcomes stand to gain a unique advantage.

Cortex is an internal developer portal (IDP) that centralizes all engineering team data, systems, and standards to eliminate friction in building and maintaining high quality software.

Cortex commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Cortex IDP.2 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Cortex IDP on their organizations.

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Return on investment (ROI)

224%

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Net present value (NPV)

$4.41M

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Cortex IDP. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a software company with $500 million in annual revenue and 2,800 employees.

Interviewees said that prior to using Cortex IDP, their organizations struggled to centralize — or often even define — processes around software development. Their organizations were growing rapidly, and they lacked the time or resources to document software components, enforce standards of creation, track ownership over time, and ensure visibility for developers, managers, and executives. Manual, ad hoc, and disjointed processes surrounding how software was built created avoidable inefficiencies that left the interviewees’ organizations scrambling to support the velocity and reliability demanded by organizationwide growth initiatives. Prior attempts to internally develop some semblance of a developer portal or platform were frequently unsuccessful or sidetracked by more urgent projects.

After the investment in Cortex IDP, the interviewees increased visibility into software health, project status, and developer productivity, enabling them to more easily identify bottlenecks and resolve issues. The total cost of ownership of having to build or maintain their own system of record was reduced. Software development with Cortex sped up, with less time spent on maintenance, context-switching, status reporting, and searching for information.

Key Findings

Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:

  • Improved engineering productivity on certain development processes by 20%. The composite organization’s engineering team using Cortex realizes a 20% productivity savings on various tasks impacted by Cortex. This includes 5% savings on avoiding context switching, 5% savings on development due to aggregating information during an incident, 5% savings around managing dependencies, and 5% savings around service and resource provisioning. While employees don’t spend all their development time using Cortex (as developers will use other tools for developing and testing code), Cortex is able to take information from other development tasks to provide these savings on development tasks that directly use this service. The total number of developers using Cortex grows by 10% each year as adoption spreads throughout the organization, totaling a risk-adjusted, three-year PV of $2.7 million.
  • Increased time savings on gathering metrics, monitoring migrations and initiatives, and reporting tasks for team leads by 75%. The composite organization uses Cortex to build 300 software components (a mix of services and other projects) each year. Team leads organizing these projects realize a total time savings of 75% due to Cortex aggregating information from throughout the development process eliminating the need to spend dedicated time gathering metrics, building reports, and checking on the status of migrations, initiatives, and developers. The composite organization saves a risk-adjusted, three-year PV of just under $1 million.
  • Increased the speed of time to market on impacted projects by 25%. In addition to saving time on various tasks around software development for the projects built with Cortex, the composite organization also reduces the overall time required to deploy new software, complete software or system upgrades, and/or bring new features to market. This equals an additional two weeks for features, updates, and software that directly increase annual revenue, enabling the composite organization to gain a risk-adjusted, three-year PV of $780,000.
  • Reduced the total cost of ownership, allowing the reallocation of six engineering FTEs. Cortex offers many prebuilt and integrations obviating the need to build and maintain custom connections across the stack. It also eliminates the need for infrastructure team members to manage previously used service catalogs that required them to manually maintain ownership, software status, package versions, documentation, and dependencies. Cortex also eliminates the need for front-end engineers tasked with building custom experiences on top of these stop-gap solutions. The six FTEs whose work can be reallocated equal a risk-adjusted, three-year PV of $1.9 million for the composite organization.

Quantitative benefits. Benefits that provide value for the composite organization but are not quantified for this study include:

  • Improved productivity for security and compliance tasks. In addition to saving time on software development, the composite organization experiences time savings around development tasks related to security, preparing for compliance, and proving software compliance to customers or regulators.
  • Improved developer ramp time. Centralizing and unifying team-, role-, and software-specific information and processes enables the composite organization to accelerate onboarding for new hires and reduce time to first meaningful commit.
  • Improved ability to reorganize teams while preserving historical knowledge. Standardizing tools and processes across the composite organization makes it easier to undergo structural reorganizations while preserving software and system knowledge when team members are added, change teams, or leave the organization.
  • Reduced downtime. By enforcing best practices, Cortex helps the composite organization reduce incidents and time-to-find owners and context during incident response. Less time spent on resolving issues means more productive time back for other projects.

Costs. Three-year, risk-adjusted PV costs for the composite organization include:

  • Three FTEs working on initial implementation and two FTEs working on ongoing maintenance. A small team of three junior engineers spends 10 weeks implementing Cortex across the composite organization with a team of two FTEs managing the platform and generating and circulating reports after implementation. This totals a risk-adjusted, three-year PV of $996,000 for the composite organization.
  • Eight hours of FTE time per service added to Cortex. The software components developed using Cortex each require 4 hours of time for getting up to speed and deploying with Cortex. Additionally, employees new to Cortex require approximately 8 hours of training to get up to speed with the capabilities of the platform. With 240 initial employees and 300 initial services in Year 1 increasing by approximately 10% per year with increased adoption, the composite organization spends a risk-adjusted $440,000 over three years on this onboarding.
  • $65 per Cortex seat holder per month in ongoing licensing fees. Based on the package selected by the composite organization, it pays $65 per month in licensing fees for each seat holder with access to Cortex. A total of 240 users are seat holders at the composite organization, paying the licensing fee to use Cortex for certain tasks outlined in other areas of the study. Over three years, this cost has a risk-adjusted, three-year PV of $536,000.

The representative interviews and financial analysis found that a composite organization experiences benefits of $6.38 million over three years versus costs of $1.97 million, adding up to a net present value (NPV) of $4.41 million and an ROI of 224%.

Productivity savings for engineer FTEs using Cortex

20%

“Before, if I wanted to understand our operational health, I had to go to [multiple different tools]. Now, I can go to Cortex and understand where each service is at a glance thanks to the scorecards. Pulling this information in from a variety of places is a massive time-saver.”

SVP, director of engineering enablement, sports

Key Statistics

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    Return on investment (ROI)

    224%
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    Benefits PV

    $6.38M
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    Net present value (NPV)

    $4.41M
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    Payback

    <6 months
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Benefits (Three-Year)

Improved engineering productivity Improved management productivityt on service development Increased revenue from improved engineering velocity Reduced total cost of ownerwhip

TEI Framework And Methodology

From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Cortex IDP.

The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Cortex IDP can have on an organization.

  1. Due Diligence

    Interviewed Cortex stakeholders and Forrester analysts to gather data relative to Cortex IDP.

  2. Interviews

    Interviewed four representatives at organizations using Cortex IDP to obtain data about costs, benefits, and risks.

  3. Composite Organization

    Designed a composite organization based on characteristics of the interviewees’ organizations.

  4. Financial Model Framework

    Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.

  5. Case Study

    Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.

Disclosures

Readers should be aware of the following:

This study is commissioned by Cortex and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.

Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Cortex IDP.

Cortex reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.

Cortex provided the customer names for the interviews but did not participate in the interviews.

Consulting Team:

Sam Sexton

Matt Dunham

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