The Hidden Cost Of Bad Software Practices

Forbes

28-03-2025

Sebastian Avila, co-founder at Qualitara.
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Software isn't just a tool; it's the backbone of modern business. Yet, poor software practices silently drain billions of dollars from organizations every year, crippling innovation, inflating budgets and derailing projects.
The numbers speak for themselves:
• $2.41 trillion was the estimated cost of poor software quality in the U.S. alone.
• In poorly executed projects, 50% of software development budgets are wasted on bug fixes instead of delivering business value.
• Late-stage defect detection can be 100 times more expensive than catching bugs early in development.
• 70% of digital transformation initiatives fail, often attributed to mismanaged software execution and quality issues.
When software fails, the consequences extend far beyond lost revenue. A single undetected error can trigger product recalls, security breaches and irreversible reputational damage.
The Samsung Galaxy Note 7 recall is a prime example: late-stage defects in its battery management system caused devices to overheat and catch fire, forcing Samsung to recall millions of units. The recall and production halts resulted in a $17 billion loss.
The lesson is clear: Bad software is expensive, and the later you catch defects, the higher the cost. But what's the solution?
Fixing software problems starts before a single line of code is written—it starts with hiring the right people. Poor hiring decisions don't just impact payroll; they derail projects, slow innovation and inflate long-term costs.
• A bad hire can cost as much as 30% of that employee's first-year salary.
• An employee who underperforms takes 70% more time to manage than a high-performing one.
• 60% of bad hires will negatively affect the performance of other team members.
This is why top organizations care so much about hiring A-players—the top 10% of engineers—who don't just write code but solve problems before they escalate. They proactively identify risks, build scalable solutions and ensure that software is reliable from the start.
To consistently hire A-players, companies should adopt a structured, repeatable approach to identifying top talent. A key element of this process is creating clear scorecards that go beyond standard job descriptions, defining the role's mission, key outcomes and required competencies. This ensures alignment with business objectives and team dynamics, while also enabling consistent evaluations across candidates, especially useful when multiple interviewers are involved, helping to compare apples to apples.
Structured interviews can then be used to assess candidates based on real career experiences rather than hypothetical scenarios. By exploring past roles, achievements and challenges, companies can uncover patterns of success, adaptability and problem-solving skills.
Finally, rigorous reference checks provide an additional layer of validation. Instead of generic inquiries, they should focus on performance patterns and insights from former managers and colleagues. Cross-referencing a candidate's statements with past supervisors' perspectives can highlight consistency and credibility. Beyond the standard questions, it's essential to dig deeper into how the candidate responded to feedback, influenced team dynamics and handled setbacks. Asking for specific examples of their problem-solving approach, how they navigated conflicts and what their manager might have changed about their performance can reveal crucial insights.
This structured hiring approach, inspired by principles from Who: The A Method for Hiring and insights from The Manager's Handbook, enhances consistency and increases the likelihood of securing high-performing talent. However, hiring great people isn't enough. Without strong engineering standards, even the best engineers can't deliver consistent, high-quality results.
Many companies mistakenly believe that hiring top-tier engineers automatically leads to high-quality software, but even the best engineers can't thrive in a chaotic environment. Talent without the right guardrails leads to inconsistency, while guardrails without talent lead to stagnation.
To create scalable, high-quality software, organizations must establish clear engineering standards that ensure everyone follows a cohesive approach. While the specific methodologies will vary between teams, companies should aim to implement industry-proven best practices that help drive reliability and efficiency. Some examples include:
• Shift-Left Testing: Catch defects early by prioritizing testing in the design and development phases, reducing late-stage rework.
• Continuous Integration/Continuous Deployment (CI/CD): Automate testing and deployments to improve release velocity while maintaining stability.
• Automated Testing: Use tools like Selenium, Jest or Cypress to detect issues before they reach production.
• Static Code Analysis: Tools like SonarQube help spot vulnerabilities and anti-patterns before they become production problems.
• Security Best Practices (OWASP): Enforce secure coding standards to prevent costly security breaches.
Organizations can also enhance their software development efficiency by adopting proven frameworks like DORA (DevOps Research and Assessment). DORA provides a data-driven approach to measuring and improving engineering performance by benchmarking teams against elite engineering organizations. It focuses on four key metrics that directly impact software delivery and operational efficiency:
• Deployment frequency
• Lead time for changes
• Change failure rate
• Mean time to recovery (MTTR)
By tracking these metrics, companies can identify bottlenecks, optimize workflows and measure progress against industry-leading teams. While DORA is a widely adopted framework, it is just one of many approaches that organizations can use to continuously refine their engineering processes and drive long-term results. Success comes from cultivating a measurable environment where talent and best practices align with business goals.
Building high-quality software takes both talent and strong standards. One without the other simply isn't enough. Organizations must invest in both:
• A-players with strong technical skills who understand the business impact of their work. They proactively drive quality, communicate clearly and consistently raise the bar by delivering meaningful outcomes—not just completing tasks.
• Engineering best practices designed to ensure consistent performance, eliminate inefficiencies and align with industry benchmarks.
This balance separates high-performing engineering teams from those stuck in a cycle of technical debt, rework and stagnation. Companies that get this right don't just build better software—they save time, reduce operating costs and improve productivity.
Ultimately, engineering excellence isn't just about writing code—it's about building a system where top talent and best-in-class processes consistently deliver exceptional software in a predictable, repeatable manner.
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