Impact of engineering on business metrics

Most software products today are delivered by cross-functional teams (squads) following some variation of an agile framework.

A squad is typically composed of people from the broader product and engineering functions.

Since results are delivered as a team effort, it’s not always obvious on the surface how much the engineering team specifically contributes.

And it’s hard to improve results when you don’t know where they come from.

What impact does better engineering performance have on broader business results?

Squad performance

To isolate the impact of engineering, let’s start with what the squad delivers as a whole.

Imagine a squad working on the application intake process at a mortgage company.

The business measures the performance of this process in the number of days it takes to receive a mortgage application from a borrower.

Before the squad’s solution, it took an average of 7 days.

After implementation, it now takes an average of 2 days.

👉 That change in the metric is the outcome the squad delivered.

The squad isn’t taking loan applications themselves.

They created a solution to support the process.

So, the average time to complete an application isn’t their performance metric.

But the change in that metric is.

Product team contribution

In this example, product managers and designers focus on identifying what needs to be built to improve the intake process.

They analyse the process and data, talk to stakeholders, and identify problems software can solve.

If the product team does a great job, the solution the squad delivers will significantly reduce application time.

If the product team does a poor job, the solution won’t make a meaningful change.

Product team performance translates into how much the metric changes.

Engineering team contribution

While the product team defines the problem and shapes the solution, the engineering team brings it to life.

Engineers clarify requirements, contribute to solution design, and develop the product.

If the engineering team does a great job, the squad delivers a high-quality solution fast.

If the engineering team performs poorly, it takes longer for the squad to deliver a high-quality solution.

Engineering performance translates into how quickly the metric changes.

It doesn’t mean that speed is the only thing that the engineering team has an impact on.

Product choices can affect speed.

Engineering quality can affect how much the metric changes.

But it is one of the performance measures over which an engineering team has the most control.

👉 So investing in engineering performance often translates into a shorter time for business metrics to improve.