Paid Subscribers Only: CEOs, Your Approach to Software Funding and Budgeting Could Be Damaging Your Investments

I’ve worked with executives who have great aspirations for their companies. They’re frustrated by software development not meeting those goals. What can they do to help?

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Originally Posted by Daniel Walters on the HYPR blog Dec 12.24

I’ve worked with many executives who have great intentions and aspirations for their companies. They’re frustrated that their energy and investment in software development are not meeting those aspirations. Some find a path to success, but many fail to produce software that meets the expectations to compete.

One common thread I’ve observed is that executives unwilling to adjust the mechanism around software funding to fit the nature of software work are at greater risk of failing to achieve their goals.

Specifically, I mean how funding is accessed within the organisation and ensuring the mechanisms for using the funding support decision-making. Doing this is in the organisation’s best interests regarding the speed and quality of the software it delivers, such as the ease of using the funds and being accountable for using them.

Organisations’ traditional funding and budgeting approaches rely on infrequent changes, centralised control and governance and are often aligned with reporting lines rather than how the work happens. The nature of software development means it is susceptible to the effects of misalignment.

This is because funding and budgeting are so frequently tied to matters of accountability, authority, process and policies that, left unaddressed, any misalignment will have unwanted effects. Issues that fundamentally affect how people work affect how decisions are made, and software development, being such a high concentration of many compounding choices, will be where the issues manifest.

When executives ignore this issue, in the best-case scenario, it results in a lot of avoidable friction in the form of interpersonal conflict and fighting upstream to do the right thing. This can lead to burnout, attrition or reduced engagement in software teams, which is costly for the business and worsens company performance. In the worst cases, it results in catastrophic quality issues that destroy customer trust. There’s a better way.

To avoid these problems, technology leadership must change the funding mechanisms available or work within those constraints in ways that are conscious of how funding influences the behaviour of software teams and the leadership that supports them. Of course, funding practices alone won’t protect organisations from all issues relating to software development. There are many factors, but this is a significant one.

In this blog, I examine why these mechanisms matter so much and some practical strategies that can benefit the teams responsible for developing software while still meeting the aims of governing critical company funds.