Software engineers are a fundamental resource, and that’s a paradox

Software engineers are a fundamental resource for businesses that produce software. They are a key source and driver of value for organizations.

But, for companies that create software that’s mainly for internal use, i.e. operations and customer lifecycle management systems, this fact represents one of the most significant hurdles that prevent companies from realizing the really astonishing benefits that internal development programs can achieve.

Part of the reason is that internal software production requires internal pricing. When one business unit wants to purchase the product or service of another business unit in the same organization, what should the price be? Commonly for internal software, the answer is simple cost based pricing. Consequently the supplier– software engineers–  are able to capture very little of the value they are helping to create.

Another possibly more significant reason is organization structure. Particularly in large companies, software engineers and others that are responsible for actually executing work, are more likely to become surrounded by layers of management and other overhead that are adept at representing value while contributing very little to its creation. It’s a natural process: those that execute are very busy, but those that do not execute are free to pursue these personally profitable and ultimately very damaging activities. It’s an enormously demotivating factor for engineering teams and it reduces or even eliminates the huge potential of internal software production programs.

This is a tremendous loss to the organization. The development of internal software is an extremely powerful source of value and a huge change agent. It’s critically important that the organization recognize software engineers and protect this key resource by correctly attributing value creation to its source. This is the key factor driving the upward spiral as internal software production becomes capable of its full potential.

It’s a strange dynamic that allows this paradox to exist. In fact it’s one of the core propositions of books like Execution: The Discipline of Getting Things Done and Drive that elimination of this cultural pattern is a primary objective for businesses to succeed. The reality is that problems like these are deeply ingrained and stubbornly difficult to change. But not impossible.