Companies have recognized IT as a driver for new business models and are trying to find talent and implement the software development process in smaller, agile and local teams. But here too, one-size-fits-all is not the right answer. Instead, it is important to consciously find the right delivery model, the right location and the right cooperation model – even in the age of agility.
There are numerous studies on the success of software development projects. Mostly with the same results: The majority of development projects fail – cost, time or quality goals are simply not achieved. The Standish Group has repeatedly confirmed this in its Chaos Reports since 1994: 83.9 percent of IT projects have failed partially or completely. Standish researchers rate only 16.2 percent of projects as successful. Only a clear number of projects was completed on time and on budget with all the promised functions. The majority of the projects, or 52.7 percent, were above the estimated costs and / or the promised functionalities were missing. In addition, the American experts interpret almost a third as completely failed.
Already in 1968, at the keynote presentation of the first international software developer conference, the NATO Software Engineering Conference, it was noted: The reason for the problems of software development was that it was lagging behind other industrial sectors. A key reason is the lack of industrialization in software development. As a result of such analysis, the idea of industrial software development has continued to advance in the past two decades. At the same time, emerging markets such as India and the Philippines have appeared on the IT world stage during this period. These developments – according to the principles of Taylorism – have led to the division of labor and the idea of industrial manufacturing by taking advantage of global differences in labor costs. Projects were often worked on by distributed teams: A small team acts in the customer’s or the department’s rooms to raise the requirements and design the technical architecture. The significantly larger offshore or nearshore team then implemented the defined specifications in order to feed the results back to the local teams for testing.
Reading tip: How software development doesn’t work
Without a doubt, this model worked very well. This is also shown in the representative 2020 UK IT Sourcing Study by Whitelane Research and PA Consulting, which examined 564 IT sourcing relationships and more than 1,150 contracts. The respondents rated 87 percent of all relationships as satisfactory. Even more outsourcing is forecast for the UK over the next two years, with 66 percent of respondents planning to outsource at the same rate or more. Another important result of the study is that the division of labor and standardization have led to cost savings and efficiency gains. Because the cost reduction is to outsource with 71 percent of the main drivers for companies, followed by business transformation and an improved service quality.
The world has changed: technology is no longer just a simple supporter of business divisions, but – on the contrary – the main driver. This is easy to prove: the largest companies in the world by market capitalization, such as Apple, Amazon, Facebook or Google, are mostly technology companies. Successful companies use technology to design new business models and not just to cut costs. At the same time, the way software is built is changing: towards insourcing, towards agile, small and often local full-stack development teams and away from the large standardized offshore-driven development units. A trend that is gradually taking hold. The energy giant BP started this development in 2018. The company announced that it would bring most of the IT back in-house. The basic idea: IT should no longer be just a support function in the company, but should be the focus of the transformation strategy. In my view, there are two main reasons for the insourcing trend.
The way software is developed has changed a lot: The understanding of software development as a craft – and not just industrial mass production – is gaining more and more supporters. There is a new aspect and a different form: platform and framework-based craftsmanship. Because the entire development is moving to the cloud – using the existing platforms and frameworks. By doing so, much of the boiler plate code that was common until now, which had to be created manually piece by piece in the past, has been eliminated.
In addition, the topic of business agility is becoming increasingly important: Companies have recognized that innovations have to reach end customers in significantly shorter cycles. This cannot work with semi-annual release cycles, annual budgeting processes, and months of regression testing. Agility and joint product teams – consisting of a specialist department and IT – are the new and effective blueprint to enable the constant delivery of new innovations in short cycles.
It’s obvious: full stack, cloud native, local software developers – they are all needed to meet the challenging requirements described above. But the development on the job market is clear: developers are needed, but there are far too few coders. This is also shown by an overview from Bitkom, the Federal Association for Information Technology, Telecommunications and New Media, from November 2019 with the headline “Tough competition for the brightest minds”. After all, many companies have recognized that technology does more than just support functions. You are now trying to build your own developer capacities.
But the same applies here: there are no simple solutions and the changed, newly required skill set cannot be trained so easily. It is not enough to quickly build agile and local full-stack developer teams. Instead, they have to be embedded in a comprehensive and fundamental innovation: the way software is to be understood now and in the future. Because it is simply the driver for new business models. And that also changes the view of the interplay between different business units. Only a holistic transformation with cooperation on an equal footing and the exploitation of the mentioned IT possibilities and opportunities with organization, operating model, culture, leadership and architecture will lead to success. And that goes hand in hand with a fundamental change: For example, this transformation requires the role of the software developer to be upgraded – including culture, career path, appreciation and remuneration. Also, the merging of the specialist department and IT in joint “product teams” is often a correct goal, in reality – let’s face it – but is often difficult to implement, especially with regard to responsibilities, common goals and visions.
“Software is eating the world” – the quote by Netscape inventor Marc Andreesen, published in an essay in the Wall Street Journal in 2011, and now the unofficial motto of digitization – is more correct than ever these days. Software is everywhere. Many companies have recognized that software must be given higher priority. However, this requires a different way of developing software. In my opinion, the guideline to success is a clear vision and a holistic view. And not blindly following a certain methodology. (bw)
- The salary evaluation
For the COMPUTERWOCHE, the Hamburg compensation consultancy COP Compensation Partner GmbH evaluated salary data from software developers. Around 6,000 data were used for this. 4,275 of them dealt with backend and 1,682 with front end developers.
IT developers deserve that
All salaries have risen sharply, especially among young professionals. Backend employees in Germany earn an average of € 61,200 and front-end developers around € 46,700.
- This is what developers without professional experience deserve
A backend developer already earns around € 52,300 without professional experience. As a front-end developer, he has an average starting salary of € 40,400.
- Up to € 80,000 with 20 years of professional experience
After 20 years of professional experience, the backend developer should earn just under € 80,000 and a front-end IT specialist about € 59,300.
- In small companies up to € 57,000
In a company with up to 50 employees, backend developers earn around 57,000 euros and around 42,000 euros in the frontend area.
- A developer in a company with 1,000 or more employees deserves this
If the company exceeds 1,000 employees, developers in the back-end area receive an average salary of € 68,000 – in the frontend area again just under € 54,000 a year.
- With small personnel responsibility from € 90,000
If a back-end developer has a small personnel responsibility of one to three employees, his salary increases to 105,000 and for a front-end developer to 94,000 euros.
- With up to 30 employees € 100,000 a year
According to the study, there are around 115,300 euros for backend developers with a personnel responsibility of 16 to 30 employees and 102,300 euros for frontend developers.
- Earn € 60,000 a year in mechanical engineering
The industry also has an impact on salary. A backend developer in mechanical engineering earns an average salary of € 63,700 a year.
- In chemistry up to € 49,000
A front-end developer in chemistry receives an average salary of € 49,000.
- Munich is the leader
In Munich, the salaries for backend developers at € 74,000 are on average around € 10,000 higher than in other Bavarian regions. Front-end developers achieve an average salary of € 56,500 here – that’s still € 7,000 more than in rest of Bavaria.
- Earn up to € 130,000 with HR responsibility in Munich
With personnel responsibility, the salary for backend developers in the Bavarian capital can rise to up to € 132,000. A frontend developer earns around € 117,000 here.
- In Berlin around € 58,000
In Berlin, the average salary for backend developers is around € 58,000. There is around € 44,000 a year for frontend developers.
- € 65,200 for backend developers in Hamburg
Hamburg has an average salary of € 65,2000 for IT backend developers. In the frontend area are much less: € 49,000 a year.
- Earn around € 46,700 in Mecklenburg-Western Pomerania
In Mecklenburg-Vorpommern, a backend developer earns around € 46,700 – in the front-end area it is again less: € 35,400 a year.