Establish a financial framework
Your job as your CTO means working with your counterparts — legal, finance, marketing and others. A key partner is the finance team. You have to understand your budget and how it maps to your target state
I use a standard framework that has worked well for me which has 3 components: Budgets are distributed into 3 buckets: Product Roadmap, Sustaining Engineering and Tech Modernization
Product Roadmap refers to everything that that is feature oriented and part of the product roadmap for customers (and internal partners)
Sustaining work refers to the work required to support existing features. This includes tweaks to the product based on customer feedback as well as defects
Finally, Tech Modernization refers to paying down tech debt. Not in public cloud? For most companies, that is tech debt. Moving to microservices? If justified, this work is tech modernization. Gnarly piece of code that everyone is afraid to touch? Yes, that too. In general, everything engineering wants to do (as opposed what product managers want to do) is tech modernization.
There are problems with both Tech Modernization and Sustaining budets at most companies, in my observation — and this is driven by a lack of honest conversations about it. Revenues pressure often results in the long being sacrificed for the short. This is sometimes appropriate but needs to be a conscious decision. Organizations often ‘drift into failure’ with ongoing decisions that slow accumulate a mountain of technical debt.
I use a financial framework to discuss with company leaders on what our investment philosophy should be, based on this:
A framework like this first needs to be agreed upon. Then each quarter (I like quarterly planning a lot!) a decision is made on which stories from each one of these buckets make the cut. And finally, we need to track if we did what we said we would! Modern tools make it easy to keep an eye on this. I currently use jellyfish to understand the metrics around financial investments
