16 Ways Application Performance Impacts the Business - Part 1
November 16, 2015
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Application Performance Management is a top priority for many IT organizations, and the companies they support. Achieving high application performance is not a goal unto itself, however. The reason application performance is so important is that it impacts business success in today's application-based economy.

"Assuring user experience/application performance enables better employee engagement and customer satisfaction and loyalty," explains Gabe Lowy, Technology Analyst and Founder of TechTonics Advisors. "These are the key drivers of the 3 components of ROI — cost reduction, productivity enhancement and incremental revenue generation — as well as strengthening risk management. User experience/application performance profoundly impacts the business, its competitiveness and its financial results and valuation."

To explore this topic further, APMdigest asked experts from across Application Performance Management (APM) and related markets what they see as the most important way application performance impacts the business.

In this list, many of the quotes could fit into multiple categories, because many of the business impacts are related. One factor may trigger multiple other factors in a chain of business impacts, all of which ultimately affect the bottom line. The goal of the list is to highlight how many diverse ways application performance impacts business results, and the categories that make up the list were chosen because they each represent a different perspective, a different way that business impact can be measured.

"Applications are the technology engine of an increasingly digital business world," says Cameron Haight, Research VP, IT Operations, Gartner. "When the engine (application) starts to behave abnormally, the consequences for the digital business can be enormous as evidenced from statistics that we've seen from the likes of Amazon and others regarding delays measured in just milliseconds. The key then going forward is to not just measure applications in term of their isolated performance, but to understand their impact on the performance of the business in the language of business metrics."

The list will be posted in four parts over the next four days. First, the list will cover the main impacts to business, and later installments will introduce you to less tangible — but no less real — impacts that you may not have considered. The first installment covers interactions with your customers.

1. CUSTOMER EXPERIENCE

The end user's experience is at the intersection between application performance and the business, both for consumers executing transactions on web and mobile apps, and for the workforce interacting with customers in the contact center, field, or physical store. So, a top enterprise priority must be ensuring an excellent end user experience for every business critical application, including those that run on virtualized infrastructure, on mobile, or in the cloud. Since you can't measure what you can't see, you have to discover every application used in the enterprise and get an immediate view of its health and impact on productivity, to track the impact to the business.
Mike Marks
Chief Product Evangelist, Aternity

Not All End User Experience Monitoring Approaches Are Created Equal

It's all about customer experience. If a slow app makes it hard for your customers to buy or use your product, you have a business problem, not just a technical problem.
Thomas Stocking
Director of Sales Engineering, GroundWork

Good application performance helps the business accomplish its goals, whether that is selling, buying, ordering, maintaining or other tasks they are attempting to accomplish. Application performance when high, keeps the focus where it belongs — on the business experience and away from the particulars of the application itself.
Charley Rich
VP Product Management and Marketing, Nastel Technologies

Application performance determines your customer's experience of your business, which in turn can either improve, or, in the case of poor application performance, damage your brand and revenue.
Dennis Callaghan
Director of Industry Innovation, Catchpoint

Today's reality is that now more than ever business is digital and users expect the online experience to be fast, secure and flawless. Therefore, the most important role for app performance is to improve the customer experience. And, while easily said, improving the customer experience is harder than ever given the increasingly complex IT environment driven by multiple code platforms, mobile-first necessity, hybrid cloud architecture and rapid release cycles. The right APM tools make it possible to not only avoid performance and availability issues from occurring but helps IT make proactive decisions that improve the overall end user experience and help drive revenue.
Bill Berutti
President of the Cloud, Data Center and Performance Businesses, BMC Software

2. CUSTOMER RETENTION

In the application economy, your customers are far more likely to interact with your company through a software application than with a live person. As a result, your apps have mere seconds to impress before your end-users abandon the application and move to the next. To earn back the cost of customer acquisition, end-users need to make several interactions with the business. To prevent your application performance from negatively impacting the bottom-line, your applications need to not only stay up and running — they need to maintain the performance consumers demand.
Aruna Ravichandran
VP, DevOps Product and Solutions Marketing, CA Technologies

7 Ways to Gain a Competitive Advantage in the Application Economy

Over the last 5 to 10 years, the world has shifted to a place where almost everything depends on software, and customers are interacting with applications all day, every day. Their performance, or lack thereof, can have profound effects on your customer's experience, and their perception of your brand. A slow page load time can mean the loss of your customer to your competitor.
Tim Armandpour
VP of Engineering, PagerDuty

The answer is obvious — abandonment. Customers today have no tolerance for a non-functioning website, and we often forget that end users are real people trying to load a real website in real time. If the website or application does not load, it is so easy for the customer to give up and go to a competitor, which will negatively impact the overall business bottom line and return on investment. Abandonment because of an improperly loading website means the loss of a customer and most likely, a sale.
Michael Sage
Chief Evangelist, BlazeMeter

The top way application performance impacts your business is by impacting your customer's satisfaction level. Who that customer is and their tolerance level of poor performance will be the multiplier on the actual dollar impact to the business, but there is always an impact. For an eCommerce site, it leads to lost revenue today and likely lost revenue in the future from the frustrated customer.
John Maxwell
VP, Product Management, Dell Software

The performance of applications affects the bottom line with increasing lower user tolerance for poor performance given the ever-expanding variety of choices available. Application performance must be an exercise in reducing latency. The performance is not just proportional to an application's complexity, it is also proportional to the complexity of the IT infrastructure on which it is running. The measurement and reduction of complexity of the underlying IT infrastructure cannot be neglected or operational teams are bound to experience sleepless nights with user defections.
Jeff Hausman
CEO, CloudPhysics

3. BUSINESS TRANSACTIONS

How can application performance impact your business most critically? The short answer is just three words: the transactional stage. It's on that stage where insights into the health the application infrastructure including endpoints can come together with correlated insights into internal and external service consumers, customer and partner behaviors, business outcomes and regional and third-party interdependencies. Bring all that together in a single package and you can optimize your business in real-time.
Dennis Drogseth
VP of Research, Enterprise Management Associates (EMA)

Slow is the new broke. It's not only about loading of the home page, but every click, every user interaction, every transaction needs to be instantly responsive. As a business owner it is imperative for me to know the user experience of each and every interaction so that I know where a possible slow down is occurring even if it is for a single user. Customer retention and satisfaction is hugely dependent on this.
Payal Chakravarty
Sr. Product Manager - APM, IBM

Mainframe workloads are growing significantly as web, mobile and Internet of Things (IoT) applications drive increasing transaction volumes. Effectively managing the performance of these workloads has a direct effect on monthly license charges, substantially raising the financial stakes. Given the sheer volume of transactions they support, even slight tweaks in mainframe performance can have a hugely positive impact on bottom line charges.
Christopher O'Malley
President and CEO, Compuware

4. CONVERSION RATE

Consumers have little patience for slow or broken apps, and will quickly move on to a competitor's app. Engagement also depends on the success of mobile "micro-moments". For example, if a purchase is slow or fails during this small time window when you have a user's attention, they'll abandon the transaction and your conversion rate will drop precipitously.
Andrew Levy
CEO and Co-Founder, Crittercism

Read 16 Ways Application Performance Impacts the Business - Part 2, covering your key corporate goals.

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