CTO CORE

Speed of Delivery

Want to know how fast your team delivers? Use the DORA metrics: deployment frequency, lead time for changes, change failure rate and time to restore service.

Your income statement can't tell you this. Every number on it is a total for a period. None of them is a rate.

What it can tell you is whether delivery is paying off. Is revenue growing faster than what it costs to build and run the product? You need 2 periods side by side for that. Revenue growth, the Rule of 40 and burn multiple all do it.

About the ratio that used to be here

This page used to show revenue divided by COGS + OPEX as a measure of delivery speed. It isn't one. Revenue and costs cover the same period, so the length of the period cancels out. What's left is operating margin in disguise:

RevenueCOGS+OPEX=11−Operating Margin\frac{\text{Revenue}}{\text{COGS} + \text{OPEX}} = \frac{1}{1 - \text{Operating Margin}}

Say a quarter has 500,000ofrevenue,500,000 of revenue, 200,000 of COGS and $150,000 of OPEX:

500,000200,000+150,000=500,000350,000=1.43\frac{500,000}{200,000 + 150,000} = \frac{500,000}{350,000} = 1.43

1.43 is exactly a 30% operating margin. 150,000ofoperatingincomeon150,000 of operating income on 500,000 of revenue. Your CFO and board already have a name for that, so CORE uses it. See Operating Margin.