According to a 2022 McKinsey report, nearly 70 percent of the top economic performers, compared with just half of their peers, are using their own software to differentiate themselves from their competitors. A full one-third of those top performers monetize software directly.
This evolution is building thanks to three fundamental shifts:
The accelerated adoption of digital products is driving an effort to embed software in the product and purchase experience through everything from personalization to seamless omnichannel delivery.
More of the value in more products and services from more industries is coming from software. For example, the average industrial company expects its share of revenue from software to double over the next three years.
The growth of cloud computing, platform as a service, low- and no-code tools, and AI-based programming assistance are putting unprecedented power into the hands of billions of workers.
The Evolution of Software Integration for Businesses
Yet while companies might already accept the importance of software(research shows that nearly two-thirds of companies have invested in software as a service or modern commercial software), they still tend to look at software as a capability that they can bolt onto their existing business. That just doesn’t work. Becoming a software business requires foundational change with different skill sets, practices, leadership, and organizational structures.
This change has elevated the importance of having technology experts on organizational leadership teams. McKinsey estimates that one-third to one-half of a leadership team should have deep software expertise, and even corporate boards should have at least two directors with software experience. In addition to having software expertise on the leadership team, companies need to build the software competencies of their existing senior leaders.
Leaders must communicate the strategy and value proposition of the software side of their business and do so in a way that keeps the core business and its people performing and feeling valued.
The Importance of Software Product Managers
Software product managers are key to building software capabilities. They turn the creative force of engineers and designers into winning software products and services. In the tech world, the ascendancy and importance of product managers are well established. But few non-tech companies give them commensurate responsibilities or influence.
There are two key characteristics of a great product manager:
First, such managers obsess over usage data and leverage it to do everything from knowing customers and informing the product road map to making product retirement decisions and helping users capture value more quickly.
Second, a great product manager has great “product sense.” Based on years of experience and a mindset unconstrained by norms, successful product managers have an intuitive ability to understand how tech can address an issue in a new way. They involve designers, engineers, and data scientists early in the ideation phase to tap a wide range of unconventional thinking.
As McKinsey says, the new reality is that “every company is a software company.” This means that Technology Recruiting, particularly for mid- to senior-level executives in Software Engineering will require a deeper look at a potential hire’s leadership, communication skills, interpersonal skills, etc. What all this points to is a whole new set of concerns regarding recruiting, hiring, and retention for Software Engineering across the entire spectrum of US industries. Given the complexity of the change, companies will need to recruit, interview, and screen in a whole new way. A relationship with a recruiting firm that understands and stands for the demands of this new world is likely to produce the best results. An effective recruiting partner will partner with the company to identify the right combination of skill and experience to find the top candidates and to convey to them what the hiring company stands for.