Maximizing the value of observability

For organizations running digital services, having an observability strategy and practice is a requirement to ensure the performance and availability of those services lead to great customer outcomes. However, that doesn’t mean those organizations can afford to spend on the tools, personnel, and other resources without limits. Responsible leaders need to ensure those investments are justified and deliver a high return.

At New Relic, we believe strongly that observability can be a driver of business value rather than just a cost. In the 2023 Observability Forecast, we not only identified the state of adoption across a wide range of organization sizes and types, but we were also able to identify patterns from the data for those organizations that got the most value from their observability investments.

In this blog post, I summarize those key findings to help you think about where to prioritize your observability efforts in the years to come to deliver the most value possible.

Train and enable teams: Unlock latent value

As a former customer success manager, I’ve seen firsthand the difference in the outcomes for customers who prioritize ongoing enablement and training for their teams vs. those who don’t. In this year’s report, I was pleased to see that 47% of respondents planned to invest in training staff on their observability tools.  Ideally, that number would be even higher as it’s a low-hanging, inexpensive way to tap into more value from the tools you already have.

Without a proper strategy for adoption, individuals tend to fall into their most familiar usage patterns where they use observability in mostly a reactive manner when they’re faced with a problem to resolve. In addition, the habit would be to narrowly focus on just the parts of a service that are their responsibility. Certainly, this is better than not using any observability. Still, it results in missed opportunities to leverage the full benefits of observability data to proactively identify where overall reliability and performance improvements can be realized.

An additional area where expanded use of observability can bring real value to organizations is to increase the level of knowledge all team members have about how the digital services they deliver interoperate to support the business. Team members can elevate their understanding—not to be expert at all of it, but with the benefit of improved context, insight, and collaboration that benefits both reactive and proactive use cases for observability.

Regardless of who you trust for your observability platform, it’s important to build a plan for adoption and ongoing education. At New Relic, our account teams and other subject matter experts can help you develop an adoption plan that gets you proficient quickly. They also partner with you to create a series of continuous engagements and ongoing product education. As the demands on your teams grow and it’s no longer viable to rely on a small group of experts, we can ensure their use of New Relic progresses where they’re delivering quantifiable value to the business every day.

Achieve full stack observability: Understand it all

The nature of the technology stack has never been more complicated. Digital services are a combination of often highly specialized technologies. Some are big. Some are small. Some are your own code that you control. Some are third-party services that you don’t control. The net result is a set of interdependent moving parts where failure or issues with any one of the components can hurt your business. It’s not good enough to look at the parts in isolation or worse, leave yourself with blind spots.

One of the most compelling findings from the 2023 Observability Forecast was the improvement in outage frequency and costs for organizations with full-stack observability compared to those without. Nearly two-thirds (65%) of respondents reported an improvement in mean time to resolution (MTTR) since adopting an observability solution. And organizations with full-stack observability had 22–23% fewer outages than those without. On top of that, the outages that did occur cost 37% less to resolve.

Prioritizing full-stack observability also means you can innovate with confidence. As you adopt new technologies such as large language models (LLMs) or other forms of artificial intelligence (AI), it’s not enough to write the code to add these to your services; you must plan for how the new functionality will fit into your observability strategy so the investments in those innovations are not undermined by an inability to support them in production successfully.

Reduce data silos: Save money, increase productivity

Under pressure to scale and innovate, the complexity of your key digital services has likely increased. Every new integration or platform you adopt brings its own telemetry data or monitoring tools. Individual teams may have their preferred tools tailored to their needs. Suppose that data lives independently, out of context with the rest of your service. In that case, you’ve created points of friction and toil when you need that data to resolve an incident or eliminate bottlenecks to reduce latency and errors. While the data silos are one problem, any related tool sprawl can also lead to unnecessary spending and budget challenges. The pain now hits on multiple fronts.

Observability platforms like New Relic provide a wide range of essential capabilities in an integrated solution that allows you to eliminate redundant tools while automatically identifying context from a full spectrum of telemetry data. In cases where specialized tools are still needed, the ability to integrate that data can go a long way to eliminate toil and improve productivity.

The 2023 Observability Forecast data show that the reduction in data silos and the number of observability tools is an ongoing challenge for organizations of all sizes. In fact, 41% planned to consolidate tools in the next year to get the most value from their observability investment. Controlling costs of multiple tools along with productivity improvements measured in key performance indicators (KPIs)—such as MTTD and MTTR—will help the denominator portion of any value assessments you perform.  It’s important to do this consolidation and rationalization on a periodic basis to keep unwanted tool sprawl from hurting your operations.

Integrate the business perspective: Focusing on your technology is not enough

Let’s say you have a team of super-knowledgeable individuals, complete visibility into all corners of your stack, and tool spending is under control. What’s next? Have you achieved maximum value from your observability strategy? While it is certainly a tremendous accomplishment to achieve all of those best practices and you’re ahead of most organizations, there’s additional value to be realized.

One of the well-worn topics from the last decade-plus is that every business is now a software business. If we apply that idea to observability, we should be aiming to get our technology teams to better understand the true business impact of the software they develop and operate—and not just during a quarterly review or planning session, but also in real time.

Rather than just understanding the common golden signals like latency, throughput, and error rates, they can understand customer journeys, user engagement, order value, and post-sale process flows. It’s tremendously rewarding for engineers to get closer to these key outcomes so they feel a sense of pride and accountability for the results the business truly cares about.

At New Relic we believe strongly enough in this objective that we’ve developed a turnkey app called Pathpoint, which builds on the foundation of the telemetry data we collect, the analysis of that data, and the ability to create compelling visualizations that can be used by stakeholders across the organization, not just the technology teams. Solutions like New Relic Pathpoint make it clear that the right observability strategy delivers a higher level of value to the business.

Conclusion

Practically no organizations would imagine themselves operating their important digital services without some level of observability. But without a clear plan to focus on the most important value-based outcomes, the costs of observability can grow unexpectedly. What I’ve outlined in this blog post is a series of recommendations and goals for how observability can be so much more than just a cost item in your budget. I encourage you to regularly evaluate the current state of observability practice for ways to improve the value you receive from your spend and your level of adoption.