Businesses Risk up to £92 Million Lost Revenue With Ineffective Software Delivery

By AIT News Desk On Jul 29, 2021

Research from CircleCI reveals a disconnect between leaders and developers, impacting business revenue

CircleCI, the leading continuous integration and continuous delivery (CI/CD) platform, announced the findings of a new study, ‘The Business of Software Report: Uncovering the Knowledge Gap’. The study reveals that businesses may be sacrificing up to £92 million¹ in revenue per year due to ineffective software delivery.

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Surveying more than 2,000 business leaders in the U.S. and the U.K. across 12 industries, the report findings point to an increased understanding among business leaders that software and business performance are intrinsically linked. The findings also identify a critical knowledge gap between leaders and developer teams that is causing businesses to miss out on potential revenue.

A software knowledge gap exists between executive leaders and their developer teams

A majority of business leaders (97%) believe the success of their business within the next year relies on the ability of their software teams. Yet, there’s a knowledge gap between these leaders, two-thirds of whom aren’t developers themselves, and the actual teams on the ground. Only slightly more than a third of respondents reported that over half of their leadership teams are skilled software developers and engineers, yet over half (52%) don’t allow their software developers to choose their own tools. This is a decision that is prone to stifle developer choice and business innovation.

Leaders are relying on ineffective metrics

The study found 89% of executives believe they have a good understanding of how to measure the performance of their engineering teams, yet the findings reveal that 40% of companies rely on measuring the number of lines of code written, and 37% measure story points. Both measures have some niche utility but are ineffective at measuring a software team’s success and impact on business.

Jim Rose, CEO, CircleCI, said: “Over the last 18 months, businesses have realised that, regardless of their industry, or the products or services they provide, they are a software business at their core. The survey results show that today’s executives need to better invest in developer operations and accurately measure the productivity and business impact of engineering work to remain competitive. If business leaders want to create a continuous innovation powerhouse, they need to close this knowledge gap before it’s too late.”

Lack of innovation is costing companies

Revenue estimates from the business leaders surveyed indicate improved software delivery could be worth up to £92 million per company per year, with 3 in 5 (60%) predicting they could achieve a 50 or more percent increase with improved software delivery. However, 30% are planning to prioritise DevOps, a practice that has been around since 2007, and only 15% will put CI/CD into practice for the first time.

Business leaders also acknowledge a lack of innovation (39%) and developer skills (39%) as factors holding their businesses back from reaching their full potential.

Rachel Stephens, Senior Industry Analyst, RedMonk, adds: “High-performing software delivery teams can be a key differentiator for business success, but many companies are still grappling with how to define and measure their teams’ performance. Poorly chosen metrics can negatively impact developer productivity and can hold organisations back from success. CircleCI’s research shows the criticality of well-aligned metrics to an organisation’s software delivery and CI/CD practices overall.”

Companies are on different digital transformation journeys

While 65% of businesses claim to currently be working on some kind of digital transformation project, 20% claim to be done with digital transformation. Not all industries, however, are on the same level. HR, for example, leads, with over three-quarters (76%) of businesses working on some kind of digital transformation. In Arts and Culture, it’s just a quarter (26%).

CircleCI’s report stresses the importance of aligning on goals and outcomes, shortening feedback loops, and using proper metrics as methods that can bridge these critical gaps between business leaders and their development teams so organisations can reach their maximum potential.