How Much is Unreliable Software Costing You?

Gary Marcus, an AI expert who spoke at the US Senate AI Oversight Subcommittee, said that we need to invest more in boring things like better software engineering instead of hype for unreliable systems.

Why it matters: As your company relies more on software for critical operations, the cost of a single defect exponentially increases.

• The US General Accounting Office (GAO) reports that US organizations spend over $2 trillion annually on software defects.

• Brainhub reports that 50% of employees are dissatisfied with their jobs due to software issues.

What they're saying: Microsoft's principal PM, Jiantao Pan, describes software as complex, and humans have a limited ability to manage complexity.

• Behavioral Economist Daniel Kahneman explains, "When faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution."

• Harvard Business Review reports that one cannot understand a complex system simply by looking at its parts.

The big picture: When building software, humans focus on solving problems in one area rather than solving complexity for the entire system.

• To make better software, we must find ways to measure how a decision within a single line of code affects the other parts of the system under diverse scenarios.

• Gary Loveman, former CEO of Caesars Entertainment, explains, "There are only two ways to get fired at Harrah's: One is to steal from the company, and the other is to run an experiment without a control."

• An experiment without a control is how most software is built.

Zoom in: Technical debt describes the consequences of software development actions due to the incentives to release first and fix later.

• In 2020, CISQ discovered that technical debt costs companies $1.2 trillion annually.

• CodeScene found that the average organization wastes 23%-42% of its development time fixing technical debt.

• McKinsey reveals that 5%-60% of every dollar spent on IT goes toward technical debt.

Between the lines: While not always as sensational as the Equifax data breach, defects in code have a cost to everyone involved.

• Sometimes, a bug in an update leaves people locked out of their homes, as with Nest in 2017.

Go deeper: Reach out for a free copy of the State of Software report for 2024.