Business

Solving the culture conundrum in software engineering

Published

1 year ago

October 31, 2022

Alistair Doran, Principal Consultant – Digital Transformation & DevOps, Exponential-e

The one crucial ingredient underpinning our transition to a digital-first economy, more than any other, is software. That’s why software engineering has become one of the world’s most in-demand professions.

In the UK alone, the median salary for the role has increased 13% year on year, as businesses look to stay ahead of the competition and attract the very best IT talent. But the high salary often isn’t consistent with where software developers stand in the business; many organisations still view them as suppliers, rather than as crucial players in their success.

Based on the current speed of transformation, we know demand for software engineering is only going to increase. So business and technology leaders need to urgently consider vital cultural changes to help better integrate software development teams within the wider organisation. But what exactly should they be?

The development dilemma

Agility has quickly emerged as a competitive advantage, as businesses strive to deliver on customer expectations quickly and effectively. That’s heralded the rise of DevOps, which aims to write high quality digital solutions more efficiently, and have the ability to continuously update in a secure and low risk way.

The practice is already accelerating feedback loops in the software development of digital solution on a wide scale, meaning new software is brought into production as fast as possible and with reduced risk. As a result, today’s successful businesses are now releasing software updates multiple times a day. The figure even runs well into the tens of thousands for tech giants like Amazon and Netflix. However, other businesses are struggling to keep up with the speed the market demands, largely due to a lack of clear communication, ways of working and integration between software developers and the wider business. It’s a dilemma that needs immediate attention if businesses are to remain at the competitive edge.

Developers are too often left to deal with huge monolithic pieces of work, which require them to write code for months on end without it being road-tested. This inevitably leads to mistakes which are found only once the updates have already been released to market, creating a ripple effect throughout the organisation. It’s an all-too-common scenario that demonstrates business leaders’ clear lack of clarity and understanding about the colossal value adopting a DevOps culture can deliver for the wider business, including its customers.

Take financial institutions looking to introduce a new offering, for example, such as a new mortgage product. Without a collective approach to development, getting the back-end systems up and running for a product can take up to six months. But modularising the options and breaking down the functionality can shorten timelines to weeks, as we encountered on a recent project.

Business leaders must look to create unified, cohesive and cross-functional teams that work together on projects that are broken down into simplified and localised components that can be easily integrated together without a negative impact on each other. It might seem like a small strategic change in working practices, but its impact on the speed and efficacy of software development can be enormous.

Revisiting personalities and processes

The role of the software engineer has changed. It is no longer about writing code in isolation, without much regard for or knowledge of how it benefits the business. Developers work better when they have clarity about the direct impact their work will have on achieving business goals and on the bottom line. It’s down to business leaders to communicate these challenges and goals (in other words understand the “Why”) to help software developers understand what they’re trying to achieve. But doing so in a way that moves towards a better working culture requires a new approach to building and managing software development teams.

The first step is casting aside the negative stereotypes many have of software engineers and celebrating the intellectual and cultural diversity within their teams. Diversity of personnel brings diversity of personalities, which is crucial to creating more inclusive cultures that accept and welcome all characters with open arms. While this may seem obvious, what is often overlooked is the impact diversity can have on stimulating and increasing innovation.

Improving the diversity of development teams helps unlock multiple ways of responding to and analysing the challenges brought forward by business leaders. After all, each individual has an array of different soft and hard skills based on their learning, development and experience. So, encouraging individuals to bring their characters and personalities to their roles is crucial; it ensures each and every stakeholder in the development process is empowered to contribute, feels inherently valued, and is able to challenge existing assumptions, helping deliver a more robust end product.

Recognising and harnessing this spectrum of skills also helps bridge many of the barriers to development that exist within businesses. Some software engineers, for example, might struggle to communicate technical updates in a way the wider business can understand, but tapping into another individual’s strong communication skills can help unite teams – and entire businesses – around one, holistic digital strategy.

Channelling change to deliver better outcomes

Clearly, cultural change is needed to embed software engineering at the core of modern business. But revisiting project management practices is also imperative to continually deliver software that provides value to the business, the world of Scientific Management and Waterfall delivery methods is no longer appropriate for the development of digital solutions. With such a heavy reliance on digital services, businesses – and consequently developers – need to be able to make changes with minimal effect. So, eschewing monolithic projects and encouraging cross-functional teams is essential. Not only does it reduce the need for sweeping software updates, but it negates the risk of a project failing to meet the initial brief, which could ultimately impact the entire business.

By reviewing organisational processes, and bringing the wider business and software developers together, we can create teams that deliver digital solutions effectively and quickly, so that every user, whether internal or external, reaps the benefits of a more sophisticated approach to software engineering.

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Business

Revolutionizing Risk: Innovative Derivatives to Support the Evolution of Commercial Space

Published

1 day ago

December 2, 2023

admin

By Grant Gryska, Co-Founder and Director of Markets at Allocation.Space

The space economy continues to expand rapidly, crossing $500bn in revenue in 2022, 78% of which came from the commercial sector[1]. Major developments like the successful test launch of SpaceX’s massive Starship are set to radically change the cost of getting mass to orbit, unlocking new possibilities for business in space.

This growing market presents outsized opportunities for investors, insurers, and businesses. But, as enterprises extend their reach beyond Earth’s atmosphere, risk management tools must evolve to meet the new and unique challenges they face. A new generation of derivative instruments is emerging to support the commercial space sector while complementing traditional insurance models.

A Paradigm Shift in Risk Management

Traditionally, space ventures were funded by governments and international space agencies — institutions that were able to absorb risk and ignore bottom-line concerns. The arrival of private space companies such as SpaceX, Vast, and Blue Origin represents a material shift in the trajectory of commercial space. National interest is no longer enough; space ventures must also turn a profit, which means managing risk. These enterprises are pushing the boundaries of what is possible, requiring a comparable evolution in financial tools to support their endeavors.

Grant Gryska

We’re now seeing a new generation of companies building platforms to host derivatives that enable enhanced risk management for the space industry. By hosting these products on a Swap Execution Facility (SEF), the aim is to bring pricing transparency and efficiency to the sector via a centralized venue. Unlike traditional insurance, which often relies on predefined policies and premiums designed to mitigate specific critical loss, swap contracts do not require proof of any actual loss or attribution, broadening the universe of potential participants in this growing market.

Derivative Instruments for Commercial Space

Derivative instruments tailored for the commercial space sector will help mitigate risks and enhance financial flexibility as the barriers to entry come down and competition increases.

Space Weather Derivatives (SWDs): With satellite anomalies demonstrating a 74% correlation[2] with geomagnetic disturbances caused by the solar wind, these products will become invaluable in managing revenue loss due to these disruptions. SWDs will ensure a smoother execution of space missions and terrestrial applications such as power grid management.
Space Derivative Contracts (SDCs): SDCs allow investors and companies to hedge against price fluctuations in space-related assets. Whether it’s fuel, space-based resources, or payload rate indexes across launch platforms and locations, these products provide a means to lock in prices, offering stability in an otherwise volatile market.
Space Options (SOs): Like traditional financial options, SOs provide the right, but not the obligation, to buy or sell a space asset at a predetermined price and time. This allows investors to capitalize on favorable market conditions while limiting downside risk.
Space Risk Swaps (SRS): SRSs enable entities to exchange or transfer specific risks associated with space activities. For instance, a satellite operator concerned about launch delay or orbital debris may enter an SRS with a risk-taking party, effectively transferring the risk to them. These products diversify risk and encourage collaboration among industry players providing complementary services like debris mitigation.

Complementing Traditional Insurance: Bridging the Coverage Gap

While traditional insurance remains a fundamental component of risk management, derivative instruments offer a more nuanced approach targeting the risks to revenue. These products provide a level of risk granularity that traditional insurance may lack or be unable to cover economically, which has left 99% of LEO (Low Earth Orbit), and 73% of MEO (Medium Earth Orbit) and GEO (Geostationary Orbit) satellites uninsured on orbit as of 2022[3]. This is crucial in an industry where risks to launch platforms, satellite technologies, and commercial objectives can be highly specific and variable.

The Future of Space and Derivative Instruments

There’s a growing cluster of companies looking to transform the financial products and venues supporting the commercialization of space. The derivative instruments being developed with the help of space industry players will provide a forward-looking and adaptive approach to risk management for space, complementing traditional insurance models.

As the commercial space sector continues its trajectory beyond Earth, these innovative financial tools will play a pivotal role in ensuring a robust and resilient financial ecosystem for companies participating in the space economy.

[1] https://www.spacefoundation.org/2023/07/25/the-space-report-2023-q2/

[2] Choi, H. S., J. Lee, K. S. Cho, Y. S. Kwak et al., 2011, Analysis of GEO spacecraft
anomalies: Space Weather relationships, Space Weather, 9, S06001.

[3] https://spacenews.com/connecting-the-dots-space-insurers-toast-another-profitable-year

Business

2024 Payments Predictions

Published

2 days ago

December 1, 2023

admin

Alan Irwin, Vice President of Product & Solutions Europe, Global Payments:

Open banking in 2024 will be all about the consumer

“2023 has been a huge year for open banking adoption, surging 68.2% from the previous year to hit 4.2 million users in the UK in July. Open banking enables consumers to provide third-party providers (TPPs) with secure access to their payments account, meaning that payments can be made through these TTPs directly from their payments account and without the need for cards.

“With more people using open banking for payments, in 2024 consumer expectations of open banking are likely to increase dramatically. Consumers will demand higher levels of speed, convenience, and security around open banking as a payment method. As a result, there will be a renewed focus on the availability and performance of APIs and user interfaces. Without improving these features, TTPs will see growth in open banking payments stagnate and even struggle to compete with digital wallets and standard cards.

“2024 will also see a stronger emphasis placed on consumer protection from fraud and scammers. With £239.2 million lost to authorised push payments (APP) fraud in the first six months of 2023, security is front of mind for businesses and their customer bases. A key differentiator for open banking and card payments is the liability protection offered by cards through the disputes and chargeback processes. Merchants and consumers alike want the power to protect themselves with tools and processes to limit financial exposure. As such, to grow in the coming year, TTPs will need to develop and implement enhanced risk and fraud prevention tools to help drive confidence in the payment channel and mitigate concerns around exposure.”

Competition between old and new banks will intensify around convenience

“Growth in consumers’ desire for a financial ‘super app’ experience will put a great deal of pressure on traditional financial institutions and increase competition between neobanks and legacy banks in 2024. A financial ‘super app’ is a single mobile application that can be used to manage all aspects of your financial life, including services that range across savings, investments, mortgages, and payments, for example.

“Neobanks, such as Revolut, are creeping into ‘super app’ territory: providing a range of services, from shopping discounts and savings pockets to instant currency conversions and stock investing, all on a single mobile application. So far, these developments are almost exclusively in the consumer banking space. However, in 2024 we will see the neobanks push their payments offerings further up the value chain into the B2B world, challenging traditional banks on another front.”

Ecommerce checkout enhancements

“In 2024, payments providers and their clients will place a fresh emphasis on customer experience, as demand for convenient and slick payment processes continues to increase. Currently, 69.57% of online shopping carts are abandoned and less than one fifth (17%) of retail, leisure and hospitality transactions are made through digital wallets, showing that much more needs to be done to offer smoother payment infrastructure online and in-store. As such, in 2024 businesses will focus on customer experience as a means of increasing customer loyalty and slashing cart abandonment rates in the process. Moving away from slow, clunky payment experiences to offer customers the ability to pay for something with a few clicks through biometrics, which allow customers to pay with a simple face or fingerprint scan, and digital wallets, which store customer payment information, is the primary method that businesses should be using as we approach the new year to tackle this issue.”

Data Storage and Keeping Customers On-Site

“Providing a top-quality payments experience will go hand-in-hand with ensuring that consumers feel safe at the checkout, especially with soaring cybercrime. In 2024 we’re likely to see more use of card data storage and tokenisation to further reduce cart abandonment rates as they allow consumers to store their card details for future use, making their next purchase at the ecommerce store much faster. Network tokens in particular, which are tokenised payment details saved for a specific card and merchant pair, drive higher approval rates for merchants and offer a more secure form of payment than raw card data entry. In addition to this, continuously updating customers’ card data further reduces friction in the checkout and drives better cart conversion.

“What’s more, customers are also put off payments when they are redirected to another (3rd party) site to complete it, as it is unfamiliar to the rest of the checkout process, often doesn’t carry the merchant brand and thus deemed insecure. Therefore, reducing site changes as much as possible and using clear branding and UX to ensure customers are aware that they’re still on this same site is key to instilling a sense of security. Similarly, real-time data validation built into the payment form can prevent bad data from being entered in the first place, such as invalid PAN, expiry date, or security code, as well as keeping out bad actors from spamming through card data en masse.”