The economics of software teams: Why most engineering orgs are flying blind (viktorcessan.com)

Article summary

The article discusses the economics of software teams, highlighting that most organizations lack visibility into the financial costs and benefits of their engineering teams. It calculates the cost of a team of eight engineers to be around €87,000 per month and argues that the team's output needs to generate at least that amount in value to be economically viable. The article also examines how the financial environment of the past two decades has led to a lack of financial discipline in product teams. This has resulted in a focus on activity and sentiment metrics rather than financial metrics, which can lead to poor prioritization decisions.

Main themes

• Software team economics
• Financial discipline in product teams
• Metrics and prioritization
• Impact of financial environment
• Role of engineering teams
• Value generation

What commenters say

• The use of AI and LLMs may change the way software teams work and the value they generate, potentially making some roles redundant.
• The idea that a codebase is a valuable asset is being challenged, with some arguing that it can also be a liability due to maintenance costs and complexity.
• Some commenters believe that the role of QA is disappearing, while others argue that it is still essential, especially in highly regulated industries.
• There is a debate about the effectiveness of project managers and whether they add value to the software development process.
• The merging of roles, such as programming, QA, and project management, is seen as a potential future trend, with some arguing that it can lead to more efficient and effective software development.
• The use of metrics such as velocity and engagement scores is seen as inadequate for measuring the financial performance of software teams, with some arguing that financial metrics are more important.
• The article's argument that software teams need to generate significant value to be economically viable is seen as a challenge to the traditional way of thinking about software development and the role of engineering teams.
• Some commenters argue that the focus on financial metrics and value generation can lead to a culture of overwork and burnout, and that other factors such as job satisfaction and work-life balance should also be considered.