The software engineering imperative for business in a digital-first world

Many companies today are digital businesses enabled by software engineering. Digital businesses engineer, market, and sell digital products and services. They can take many shapes, but, ultimately, they deal in digital assets and services—software, data, and platforms. Moreover, they’re often trying to reach a global market with a focus on innovation and agility.

Business and tech imperatives are creating a need to improve software engineering capabilities and to integrate user-centered design, even for organizations with a long heritage of business models based on physical products. The US Postal Service’s evolution to augment physical mail with a digital option is just one of many examples.

Merely adopting technology or hiring talent will likely not be enough. Successful digital transformations—those seeing greater market returns—bring together a digital strategy, aligned tech investments, and a strong digital change capability to help drive market value. Businesses that want to succeed with digital products and services should consider a competency in software engineering—that is, reliable application development based on user requirements.

We imagine four approaches to software engineering that are grounded by scenario analysis and interviews with those knowledgeable in this space. They reflect different levels of engineering maturity based on two fundamentals: product-centricity and the operating model.

Each type has advantages and disadvantages. If organizations can become more product-centric and more decentralized, they can become Engineering Leaders.