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Software Development has
DISECONOMIES of Scale
Not Economies of Scale
Allan Kelly
allan@allankelly.net
@allankellynet
Milk is cheapest
in BIG cartons
Software is
cheapest in
lots of small
cartons
And small cartons
of software
reduce risk
Big increases
risk
Consider a large project
Against several small
projects
Project A: Risk = 30% Value at risk = £1m
Therefore risk weighted ...
Software development…
• Does NOT have economies of Scale
• Development has DISECONOMIES of scale
Therefore
• Stop thinking...
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Software Development has DISeconomies of scale

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Lightning talk from Agile in the City, November 2015

Published in: Software
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Software Development has DISeconomies of scale

  1. 1. Software Development has DISECONOMIES of Scale Not Economies of Scale Allan Kelly allan@allankelly.net @allankellynet
  2. 2. Milk is cheapest in BIG cartons Software is cheapest in lots of small cartons And small cartons of software reduce risk
  3. 3. Big increases risk
  4. 4. Consider a large project Against several small projects Project A: Risk = 30% Value at risk = £1m Therefore risk weighted value = £300,000 Prj B: Risk = 15% Value @ risk = £½m Therefore … = £75,000 Prj C: Risk = 15% Value @risk = £½m Therefore … = £75,000 E: Risk = 6% @risk = £200k Therefore = £12k F: Risk = 6% @risk = £200k Therefore = £12k G: Risk = 6% @risk = £200k Therefore = £12k H: Risk = 6% @risk = £200k Therefore = £12k I: Risk = 6% @risk = £200k Therefore = £12k
  5. 5. Software development… • Does NOT have economies of Scale • Development has DISECONOMIES of scale Therefore • Stop thinking BIG • Start thinking SMALL Allan Kelly – allan@allankelly.net - @allankellynet

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