Engineering Investment & Remote Work: The Changing Landscape

Research and Development (R&D) is becoming an increasingly significant component of operational expenses (OpEx) and a key differentiator for companies. Despite its importance, engineering—the backbone of R&D—is often the function with the least visibility from a reporting perspective. This study focuses specifically on engineering metrics, investment strategies, and the challenges posed by remote work.

The Shift to Remote Work and Its Impact on Engineering

The global transition to remote and hybrid work models in 2020 reshaped the way engineering teams operate. At the time of this report, more than 50% of companies had no definitive plan to return to in-office work. This shift has fundamentally changed how engineering teams collaborate, presenting both challenges and opportunities for maintaining efficiency and alignment across distributed teams.

Engineering organizations must now rely on a combination of robust collaboration tools, structured processes, and clear reporting frameworks to ensure productivity, innovation, and quality remain intact. As remote work becomes the norm, companies must rethink their engineering investment strategies and key performance metrics.

Engineering Investment Framework

To better understand and optimize engineering investment, organizations should categorize their efforts into two main areas: Keep the Lights On (KTLO) and Elective Investments.

Keep the Lights On (KTLO)

This category includes all essential engineering work required to maintain existing services and ensure a consistent user experience.

Examples of KTLO tasks:

• Maintaining security standards and compliance

• Ensuring uptime and monitoring system performance

• Addressing customer-reported defects

• Routine internal maintenance and operational procedures

• Managing external dependencies (browsers, libraries, platforms, hardware)

While KTLO tasks are necessary, companies must also balance these investments with forward-looking engineering efforts.

Elective Investments

Elective investments focus on innovation, quality improvements, and internal productivity enhancements that drive long-term business growth.

1. New Capabilities

   • Developing new products or features

   • Expanding to new platforms or partner integrations

2. Quality Improvements

   • Enhancing product reliability and security

   • Improving customer satisfaction through performance optimizations

   • Iterating to increase adoption and retention

3. Internal Productivity

   • Implementing better developer tooling

   • Automating testing processes

   • Code restructuring to reduce future KTLO workload

By tracking investments across these categories, companies can ensure a balance between operational stability and strategic innovation.

Best Practices for Engineering Metrics and Productivity

Effective engineering organizations use a data-driven approach to productivity, similar to how sales teams track pipeline and conversion rates. To ensure engineering investments align with business goals, leaders should focus on tracking key metrics at different stages of the development cycle.

Recommended best practices:

• Identify three core metrics that align with company objectives and provide clear visibility into engineering efficiency.

• Track revenue per full-time engineering cost, release velocity, and development cycle times on a trended basis.

• Focus on continuous improvement rather than overloading teams with excessive tracking.