Businesses take risks with faulty software

Unearthing software faults once software goes live is storing up problems for businesses.

A major report into the cost of fixing software problems in live applications revealed that the average large application requires £2.23m extra to fix as a result of problems once applications go live, but leaving software to run with problems risks even greater damage.

Last week software measurement firm Cast published the results of its Report on Application Software Health, which analysed 365 million lines of code in 745 large software applications belonging to 160 companies in 10 countries, revealed an average cost (technical debt) of £2.23 per line of code to fix.

Dr Bill Curtis, chief scientist at Cast, said 35% of the violations discovered in the study result in damage to business by adversely affecting the security, performance and uptime of application software. “Technical debt creates a double dose of trouble because it siphons money from IT innovation to pay for software repairs," he said.

If software bugs are left after an application goes live, the costs are significantly higher. David Norton, analyst at Gartner, said businesses are creating huge risks by running software with problems. "The pace of application development, innovation and modernisation is increasing exponentially, based on agile practices, cloud, consumerisation and mobile," he said. "With every release cycle we run the very real risk of adding technical debt that we must pay back, it’s just a question of when. This is the ticking time bomb for the 21st century.” The cost of fixing bugs increases exponentially at each stage of the development process. Many of errors are found at the requirement specification stage of development.

Software is core to businesses in all sectors today and software failures are costing companies and consumers large amounts of money, said Phil Codd, managing director Northern Europe, India & South Africa at software testing firm at SQS.

“The main problem caused by software bugs is negative financial impact and, in almost every case, consumers end up losing out,” said Codd. “Deficiencies in software quality often result in costly emergency fixes and/or damage to a brand’s reputation, but software failure can be avoided through an effective quality management strategy identifying and resolving potential glitches before they appear.”

The costs of post release software failures

There are examples across all industries of the serious problems to businesses and their customers of software failure when it occurs in live applications. This year has seen many examples, which include financial, reputational damage as well as wrongful arrest.

-An error in software used by US finance firm AXA Rosenberg Group to manage client assets resulted in a 15.7m fine from the US Securities and Exchange Commission (SEC). The company also had to repay £136 million to investors after it told them market volatility rather than software failure was to blame for their investment losses.

-A failure with software at Commonwealth bank in Australia meant large sums of money were lost at 40 cash machines across one city.

-System problems at Japanese bank Mizuho lead to more than 5,600 machines going offline for 24 hours, internet banking services being shut down for three days, delays in salary payments worth £939m going into the accounts of 620,000 people and a backlog of more than 1 million unprocessed payments worth around £5.64bn.

-Problems with a £27m computer system linking New South Wales courts and allowing documents to be lodged electronically led to damages claims for unlawful arrest and malicious prosecution, after 3,600 defects in the electronic transfer of data from the courts to the police’s database led to the wrongful arrest of 22 individuals.

Julian Clarke, director at software consultancy Experimentus, said in today’s demanding business environment, organisations face increasing compliance and regulatory risks: “The consequences of getting it wrong can be serious, both in loss of revenue and reputation. With this in mind it is time to challenge why most business leaders think that the only party responsible for quality should be the testing and quality assurance department.”

He says businesses in large numbers miss out on the savings that can be made if software problems are identified early. “The number of organisations that still view testing and quality as an afterthought to the development process and implement an approach half-way through the project which is both chaotic and expensive, is surprising. 

"In these organisations, quality assurance and testing becomes a bottle-neck between the development and production teams, and because the end date is near, not enough time is available to ensure a high quality product.”

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