Scaling Music and Software

I am working on a lecture for my economics class about production theory.  Production theory works nicely for software development, music and    information workers too.

Output is the result of labor and capital.  The amount of music produced is the result of musicians (labor) and instruments (capital).    As more and more musicians are added to the process of making music the process of making music becomes more formal and there are overhead costs.

If we start with one musician playing a piano, then there is not much overhead required.  Add  three musicians and you get a quartet and there is some communication that needs to take place.  Add about 96 more musicians and you get an orchestra.

The cost per output (the average product) begins to rise because you have overhead costs.  If you have about 100 or so musicians you need a conductor.   Sheet music is required too (formal documentation not necessarily required for a small group).  We see the marginal cost, the cost to produce additional music, begins to rise.  The reason are additional labor is required that does not produce music directly.

This same model works for software development too.  Output for software is the amount of functionality produced.  As the project scales upward formal processes are just required.   There project resources (labor) required such as a project manager.  Formal methods and documentation is required to help in communication.

So there you have it…. Production theory works for information workers.

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