Home FinTech Understanding the Software knowledge Gap in the New normal

Understanding the Software knowledge Gap in the New normal

The seismic events of the last 18 months have meant technology is now shaping the way everyone work more so than ever before. Whilst many businesses are now returning to some semblance of normality it remains the case that technologies like Zoom, Slack, and others, have cemented their place at the centre of the business communications ecosystem. And in finance, the change has been even more profound, with thousands of FinTech startups seizing the initiative during the pandemic to accelerate the pace of change.

But it’s not just digital products that have increased in importance. It’s also the case that a higher proportion of legacy businesses now build their own software in-house. This means software is now more important than ever. It’s become cliche to say that every company is a software company, but it’s also true. And they have identified a shocking gap between leaders in business and the software teams they trust to deliver products. The gap is one of understanding and measurement. Almost nine in ten (89%) executives believe they can accurately measure the performance of software engineering teams. At least 40% of respondents are judging the performance of their teams. This is by using measures like lines of code and story points, both of which are outdated metrics that don’t accurately reflect good software outcomes in the modern age.

They can go further than just finding a gap though. From the data, they can also estimate how much this could be costing each business. To do this they took the average percentage revenue uplift our respondents said they’d achieve with improved software delivery and multiplied it by the respondents’ mean reported revenue. By this measure, the business leaders they spoke to estimate that updating their software delivery practices could be worth £92m per business per year. So, the immediate financial incentive for improvement is clear. But getting these measures right is important for the future success of businesses too. 80% of respondents believe the success of their business relies on the ability of their software engineers.

A landmark study by the World Bank, the Cambridge Centre for Alternative Finance at the University of Cambridge’s Judge Business School, and World Economic Forum, found strong growth across almost all services in the FinTech market through COVID-19, particularly in emerging markets. All of this rapid growth will require a lot of new software. And in order to really be successful, that software needs to be measured and reported. The best way to do this is by talking to developers. They were shocked to find that around half of the businesses they spoke to do not allow developers to choose their own tools. This is just one example of a lack of empowerment that could be costing companies time and energy. In any case, communication between teams has never been more important. Understanding the knowledge gap between developers and management is the first step to building bridges between these disparate teams to help them all work smarter.

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