Understanding the Cost of Production Bugs in Software Products?
The Cost of Software Bugs: Examples and Statistics
The financial impact and cost of Production software bugs is not only significant but also widespread across various industries. According to the 2022 report by the Consortium for Information & Software Quality (CISQ), the cost of poor software quality in the United States has grown to at least $2.41 trillion. This figure includes losses from cybercrime, technical debt, and software failures, which continue to rise as the reliance on software systems increases(Cost of software bugs).
Notable Examples of Costly Software Failures
- SolarWinds Orion Hack (2020-2021): One of the most devastating software-related incidents in recent history, the SolarWinds hack, exposed the vulnerabilities within enterprise network management software. The hack is estimated to have cost affected companies an average of $12 million each, with a total cost of $90 million, including incident response and forensic services(Cost of software bugs).
- Colonial Pipeline Ransomware Attack (2021): This attack highlighted the severe impact of software vulnerabilities on critical infrastructure. The attack disrupted nearly half of the fuel supply on the East Coast of the United States, causing gasoline shortages and a spike in fuel prices. The total cost of the underlying security vulnerabilities remains incalculable, but Colonial Pipeline paid a ransom of 75 Bitcoins (approximately $5 million at the time) to regain control of their systems(Cost of software bugs).
- T-Mobile Data Breach (2021): In March 2021, T-Mobile suffered a data breach that compromised the personal information of more than 50 million customers. The breach led to lawsuits, customer dissatisfaction, and a significant financial burden for the company. The exact total cost to T-Mobile and its customers has yet to be determined, but the breach underscores the high stakes of software security(Cost of software bugs).
Cybercrime losses due to existing software vulnerabilities have seen a staggering increase. For example, losses rose by 64% from 2020 to 2021. In 2022, the estimated cost of poor software quality due to cybercrime alone was substantial, contributing significantly to the overall $2.41 trillion cost(Cost of software bugs).
Additionally, the concept of Technical Debt (TD) has become a significant financial burden for organizations. The accumulated TD in the United States is estimated to have grown to approximately $1.52 trillion in 2022, as deficiencies are not being adequately addressed. This growing debt is a primary reason why many modernization projects fail, with some organizations spending up to 40% of their IT budgets simply maintaining TD(Cost of software bugs).
The Cost of a Software Production Bug: A Personal Story
I used to lead Engineering at a SaaS company where we had a large legacy software product where bugs were a regular occurrence. When a significant bug found its way in Production, there were times when it was very disruptive, not only to the Engineering team, but also to other departments in the company. A Severity 1 issue demanded that we drop whatever we were doing and attend to it immediately. It was often chaotic and frantic, while trying to figure out the root cause and the source of the bug. Slack messages flying everywhere, people scrambling to self-organize and find out who should join the conversation.
Sometimes it took less than an hour to resolve the issue. Other times it took several hours. In some worst case scenarios it took days. When the dust settled, a group of us would meet together for a retrospective, in an effort to learn from the experience and get better.
All of these activities took time, effort, and ultimately cost the company money.
After one such unpleasant event, which lasted about 1-2 days, I wanted to get a rough estimate of what it cost us in salary expense, given the number of people that got involved. I contacted every single employee who spent any time on the cycle of resolving the issue, whether they were involved in triaging, diagnosis, communication, or something else. I asked everyone to provide the number of hours they spent personally to help in the process. Then I sent the list of names and times spent to HR and requested a total dollar figure, based on everyone’s individual salary.
It turned out that the total cost to resolve that particular software production bug was about $2000. For some companies this may not be a big deal. For other ones which are smaller (we were about 60-70 people at the time) it is a bigger deal. Nevertheless, the reality was that we paid about $2000 in salaries alone to resolve a single issue. The question remains – could it have been prevented by spending significantly less than that? I would like to think so.
Phases of a Bug: From Inception to the End User
Every software bug goes through different phases before it makes its way to the Production environment. While those phases will vary from one tech company to another, here is a very simple path:
Local Dev Machine
Most code changes begin on the local computer of a software developer. He/she checks out the latest version of source control and begins working on a new user story. Somewhere in the process a bug is inadvertently created. Depending on the software quality and testing practices of the team, that bug may or may not be caught. If it is caught, it is fixed and the cycle stops. If not, it has the potential to move to the next phase.
Test Environment
A bug that is created on a local dev machine, and not caught and fixed, can get deployed to a Test environment. Some teams run automated tests during deployment, which can catch the bug and it will not get deployed to the Test environment. However, if such tests are not in place, or they do not catch the bug, then the next opportunity is for a QA Tester, Product Owner, or stakeholder to discover the issue during manual testing. If all of the above fail, the bug has a chance of making it to Production.
Production Environment
Again, the path of code deployment will vary from one company to another. Nevertheless, if the bug is not caught during deployment to Production, or shortly after, it will now become available to the end users. Sooner or later one or more users will run into it and experience the problem.
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The Growth of a Software Bug’s Cost
Research conducted by the IBM System Science Institute reveals that the relative cost of fixing defects increases dramatically as they are discovered later in the Software Development Life Cycle (SDLC). Defects found during the testing phase can be 15 times more costly than if they were found during the design phase, and twice as costly as those found during implementation(Cost of software bugs).
The cost of a software production bug grows as it moves further from its original source. When a bug is identified and resolved during the initial stages of development, such as on a developer’s local machine, the cost is minimal. The developer can quickly correct the issue without involving additional resources.
However, if the bug goes unnoticed and makes its way into the testing environment, the cost begins to increase. Now, QA testers must spend time discovering and reporting the bug, and the developer has to revisit and fix the issue, often requiring more effort than if it had been caught earlier.
The most expensive scenario occurs when a bug escapes into the production environment, where it can be discovered by end users. At this stage, not only does the fix involve multiple teams—such as support, QA, and development—but it can also lead to customer dissatisfaction, potential revenue loss, and damage to the company’s reputation.
The Hidden Costs of Software Production Bugs
The personal example above explained the cost of a software production bug to our company in salary wages. However, that is not the total cost of a production bug. There are additional costs which are usually harder to see. Here are some examples:
Lost Time
As pointed out, the total time we spent in that example was over a full working day. That was time lost that those who got involved would not get back. Instead of working on their regular priorities they had to drop what they were doing and spend time on the production bug.
Cost of Switching Contexts
Anyone who has been interrupted, when trying to do meaningful work, knows the cost of doing so. Stopping your work and shifting attention to an emergency is very disruptive. When the emergency is gone that person cannot just magically get back into the same mental state they were in right before the interruption. It takes time to figure out where they left and to resume the momentum they had. All of this adds to the total amount of lost time.
Employee Dissatisfaction
Software production bugs can also cost in the way of employee dissatisfaction. They often create chaos and stress among the employees. When this happens repeatedly it can lead to less happy employees, who then become less productive employees.
Customer Dissatisfaction
A software bug in production can cost a company in very significant ways when the customers become unhappy. Unhappy customers will share their frustration with others, which will cost business opportunities in ways that we will never know.
Company Reputation
Software products riddled with production bugs will ultimately cost the company its reputation. We all know that reputation takes time to build and can be lost very quickly.
Recommendations for Reducing Software Bugs’ Cost
To mitigate the significant costs associated with software production bugs, it’s crucial to adopt a proactive and comprehensive approach to software development and quality assurance. Here are some key recommendations:
Integrate Quality Assurance Early and Continuously:
The cost of fixing a bug escalates dramatically the later it’s discovered in the development lifecycle. By incorporating quality assurance (QA) practices early in the development process—starting from the design phase—you can catch defects when they are least expensive to fix. This means integrating automated testing, peer reviews, and code analysis tools into your daily development workflow to ensure issues are identified and resolved as soon as possible.
Adopt a Secure SDLC (Software Development Life Cycle):
Security vulnerabilities are among the most costly and damaging types of software defects. Implementing a Secure SDLC, where security practices are embedded into every phase of the development process, can help prevent vulnerabilities from being introduced in the first place. This includes secure coding practices, regular security assessments, and the use of security tools that can detect vulnerabilities early.
Invest in Developer Training and Tools:
Continuous learning and access to the right tools are vital for developers to maintain high-quality code. Invest in ongoing training for your development team on the latest coding standards, security practices, and testing methodologies. Additionally, provide them with modern tools that automate code quality checks, enforce coding standards, and identify potential issues before they escalate.
Prioritize Technical Debt Management:
Technical debt accumulates when quick fixes are prioritized over long-term code quality. While it might seem beneficial in the short term, technical debt can lead to higher costs down the line, as it makes the codebase more complex and difficult to maintain. Regularly allocate time and resources to address technical debt by refactoring code, updating dependencies, and cleaning up the codebase. This proactive management can reduce future bug occurrences and improve overall system stability.
Implement Robust Monitoring and Incident Response:
Even with the best preventive measures, some bugs will inevitably reach production. Implementing robust monitoring tools allows you to detect issues in real-time before they impact a large number of users. In parallel, establish a well-defined incident response plan that enables your team to quickly triage, diagnose, and resolve production issues. Regularly review and refine this plan based on post-incident retrospectives to ensure continuous improvement.
Build a Culture of Quality:
Ultimately, the effectiveness of these recommendations hinges on a company-wide commitment to quality. Build a culture where every team member, from developers to executives, understands the importance of software quality and their role in maintaining it.
Sources
https://www.forbes.com/sites/abrambrown/2021/10/05/facebook-outage-lost-revenue/
https://www.synopsys.com/content/dam/synopsys/sig-assets/reports/cpsq-report-nov-22-1.pdf