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Businesses losing billions to poor quality software, putting many at risk for 2023

Businesses are losing billions due to poor quality software. And, as the economy tightens and skills remain scarce, this is likely to get worse, forcing them to pay to fix avoidable problems and resulting in stalled growth. 

According to the Consortium for Information & Software Quality (CISQ), poor software quality cost US organisations $2.08 trillion in 2020. The consortium found operational software failure to be the leading cost contributor, reaching an estimated $1.56 trillion in 2020, a 22% increase since 2018. The cost of unsuccessful development projects, meanwhile, reached $260 billion in 2020, which represented a 46% increase since the previous estimate two years before. 

These are truly staggering numbers. In South Africa, this amounted to around ten percent of the country’s GDP that year and unfortunately we believe the losses to be comparable, if not worse.

We have seen that in an effort to save costs, companies often fall for the low quality code trap. Many will either outsource to low-cost development destinations, or they will just throw more and more developers at the problem. When you commoditise software development and make decisions based purely on cost, the casualty will be quality. And too few leaders fully understand the implications waiting for them down the road.

Even as a best case scenario, organisations running on low-quality software will struggle to release new features, impacting their ability to deliver on customer expectations. 

If you are constantly fighting fires just to keep software running there is no way you can expect to stay on schedule. Nor will you be able to respond to changing market conditions or the changing needs of your customer. Even if you manage to avoid the potential critical system outages, you are likely to experience complaints from frustrated customers. Companies are learning the hard way that software is as essential in the modern company as sales is. 

Can’t build a castle on sand 

Many companies believe they can solve the problems of low quality code by adding more developers to the team, but we have seen this approach fail on many occasions. 

In one case a company was on a short deadline to roll out new features for its digital offering while they built their inhouse developer capacity. However they conflated the two objectives and they just kept hiring new developers. After twelve months they still hadn’t launched the features. Throwing people at a problem seldom delivers. What they should have done is brought in a managed services team to deliver an MVP and get them into the market. Then they could have taken the time required to build quality inhouse engineering capabilities to take over refining product features. 

We have also seen poor quality software put the brakes on global expansion plans. 

You can’t build on creaky foundations. Code has a shelf life and if it’s already poor quality it will degrade even faster. Not only will it cost you to keep patching it, but while you spend all  your efforts on keeping it limping along, you are missing out on all the opportunities of building and deploying new revenue streams. The real threat is that when there are tech failures, it often happens in full public view and can end up costing far more than just a few red faces. 

Tech leaders and product owners should be on high alert in the year ahead. 

Most companies will be facing tighter budgets in 2023, but taking a short-term outlook on software quality could directly impact your ability to deliver to customers, build new features and, in some instances, could actually put your company’s survival at risk. The good news is managed services teams can help you course-correct before any lasting damage is done.

 

 

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Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 30 November, 2022, 12:15Be the first to give this comment the thumbs up 0 likes

Customers get that cost shouldn't be the only criteria for deciding where to outsource software development to but it's not like they always got high quality when they outsourced to high cost destinations.

There are as many Tier 1 implementation partners from Developed / High Cost countries involved in ERP Horror Stories as Tier 2 or 3 ones from Emerging Market / Low Cost countries. 

Not sure if that was the intention but, by singling out  low cost development destinations for low quality software, your post sounds borderline racist.

Sergio Barbosa

Sergio Barbosa

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Global Kinetic

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