I have often heard unit tests help programmers build confidence in their software. But is it enough for verifying that software requirements are met? I am losing confidence that software is working just because the unit tests pass.

We have experienced some failures in production deployment due to an untested\unverified execution path. These failures are sometimes quite large, impact business operations and often requires an immediate fix.

The failure is very rarely traced back to a failing unit test. We have large unit test bodies that have reasonable line coverage but almost all of these focus on individual classes and not on their interactions.

Manual testing seems to be ineffective because the software being worked on is typically large with many execution paths and many integration points with other software. It is very painful to manually test all of the functionality and it never seems to flush out all the bugs.

Are we doing unit testing wrong when it seems we still are failing to verify the software correctly before deployment? Or do most shops have another layer of automated testing in addition to unit tests?