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A Business Leader's Guide

5 Warning Signs of Poor Software Engineering
(And How to Fix Them)

Software engineering is the backbone of modern business, but even the most talented teams can fall into bad habits that slow progress, create hidden risks, and ultimately impact the bottom line. Whether you’re overseeing an internal team or working with an external partner, recognizing early warning signs can mean the difference between a high-performing engineering culture and a costly, inefficient one. Here are five red flags that signal trouble—and what you can do to course-correct before it’s too late.

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The Cost of Poor Software Engineering

In today’s fast-paced business environment, software is a critical driver of success. However, poor software engineering practices can lead to substantial financial losses, missed opportunities, and frustrated users.

According to a 2023 report from the Consortium for Information & Software Quality (CISQ), software failures cost U.S. businesses an estimated $2.41 trillion annually due to operational failures, security breaches, and maintenance expenses. Similarly, a study by McKinsey found that 17% of large IT projects fail so badly that they threaten the very existence of the company.

Warning Signs

1. Frequent Bugs & System Instability

Red Flag: Your software experiences frequent crashes, glitches, or persistent bugs.

2. Difficult-to-Maintain Codebase

Red Flag: New feature development is slow because the code is hard to understand and modify.

3. Repeated Delays & Cost Overruns

Red Flag: Software projects consistently miss deadlines and exceed budgets.

4. Slow Performance & High Latency

Red Flag: Your software takes too long to load, causing user frustration and productivity loss.

5. No Ownership & Accountability

Red Flag: Teams lack clear responsibility, leading to finger-pointing and stalled progress.

How to Fix Them

1. Frequent Bugs & System Instability

Red Flag: Your software experiences frequent crashes, glitches, or persistent bugs.

Why It Happens

  • Lack of automated testing
  • Poor error handling
  • Patchwork fixes instead of addressing root causes

How to Address It

  • Implement automated unit and integration testing
  • Enforce code reviews before deployment
  • Invest in robust error-handling mechanisms

2. Difficult-to-Maintain Codebase

Red Flag: New feature development is slow because the code is hard to understand and modify.

Why It Happens

  • Lack of clear structure and coding standards
  • “Spaghetti code” that lacks organization 
  • Failure to regularly refactor code 

How to Address It

  • Standardize coding practices across teams 
  • Schedule routine code refactoring to improve readability 
  • Utilize version control and documentation best practices 

3. Repeated Delays & Cost Overruns

Red Flag: Software projects consistently miss deadlines and exceed budgets.

Why It Happens

  • Poor project planning and scope creep
  • Inefficient communication and unclear requirements
  • Excessive rework due to flawed initial designs

How to Address It

  • Adopt agile methodologies for incremental development
  • Define clear project scope and expectations upfront
  • Ensure regular stakeholder alignment to prevent misdirection

4. Slow Performance & High Latency

Red Flag: Your software takes too long to load, causing user frustration and productivity loss.

Why It Happens

  • Unoptimized database queries and algorithms 
  • Poor memory management leading to resource drain 
  • Lack of scalability considerations in early design stages 

How to Address It

  • Conduct regular performance audits and optimizations
  • Optimize queries and improve data caching mechanisms
  • Design with scalability in mind for future growth

5. No Ownership & Accountability

Red Flag: Teams lack clear responsibility, leading to finger-pointing and stalled progress.

Why It Happens

  • Undefined roles and responsibilities 
  • Weak collaboration and siloed teams 
  • Insufficient leadership and oversight
How to Address It
  • Clearly define roles and accountability measures 
  • Foster a culture of transparency and regular status updates 
  • Ensure strong leadership to guide software initiatives 

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