Software Economics

[chiph]

Just a quick survey:
Of those readers who graduated with a Computer Science or Information Systems degree, how many had to take a course on software economics?

I was talking to my father over the weekend, and he was surprised that I didn't have to take a course like he had to take as a Chemical Engineer. They studied the costs of business decisions, and how different engineering approaches can influence the cost of a product.

This is stuff like cost of borrowing money, time-value of money, analysis of alternatives, and so forth.

Chip H.


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If you want to get the best response to a question, please read FAQ222-2244 first

 

[willir]

I did not take "software economics" in a "class" environment, but I was exposed to the "cost of ownership" and "product life cycle" in the business environment. Both of these concepts are related to "software economics". The problem is that it seems that different businesses have different ideas on philosophies on software economics. For example, company A favours leasing computers and company B chooses to purchase, both because it makes economical cents.

I did take project management, business management, etc where such issues were addressed "software economics" indirectly. For example, for the project management, plan a Unix system from the server room and hardware to maintenance and support.

Here is a thought for you...
A company wants to lower their cost of software, so they decide to reduce the number of applications by over 90%. (Pendulum swung from too lax to super strict) Their idea was to use one application across the board -- one office application, one email appl, one cad app, one statistical app, etc. And if an application only did 60% of the task, it was considered adequate. The problem was that completing 60% of the task killed some people who needed 100%.

Justification was that a) support costs for each software increased their support costs; b) they could get better leverage and reduce the costs of the software per seat by buying in bulk.

In this case, there was an obvious trade-off between the reduced costs of ownership vs the invisible "opportunity" costs of ineffecient and incomplete work.

 

[CajunCenturion]

While working on my Masters in Computer Science, I took a number of graduate courses under the general headline of 'software engineering'. Part of engineering is understanding the life cycle and phased costs, return on investment, economies of scale, and so forth. Economics is part of the engineering process.

Good Luck
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[chiph]

Sounds like it just wasn't covered at my school, or wasn't covered at the Bachelors level. I'll have to talk with them about this....

Chip H.


____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first

 

[LNBruno]

Software econ wasn't a topic for me either, but with so many outfits being run by CFOs instead of CIOs, I'm seeing more and more examples like the one willir gave...

Sad.

< M!ke >

 

[chamilz]

Economies of Scale, Cost Benefit Analysis, Investment Appraisal, Return on Investment, product life cycle, all these subjects are a part of Economics, Finance, and Management Accounting. Actually we can’t exactly say where these subjects are belonging to….
However, these subjects will really help you to reach better decision on IT related investment.

 

[chiph]

I had a book recommended to me:

Return on Software : Maximizing the Return on Your Software Investment
ISBN: 0321228758

It looks pretty good. Just need to wait for the credit card to recover before ordering it.

Chip H.


____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first

 

[jaymaechtlen]

At Cal Poly, there was a class called "Engineering Economics" which dealt with time-value of money, rates of return (internal versus project)
That was a few years back, it may have been renamed a few times since.

 

[chiph]

At Cal Poly, there was a class called "Engineering Economics" which dealt with time-value of money, rates of return (internal versus project)

Yes, that's what got my whole train of thought going. Only it was Virginia Tech from 1947.

Chip H.


____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first

 

[russellbcopeland]

I had a similar Eng Econ course in colege myself. From people I talk too it seems like that is not so much a part of com sci cirriculum (bs level anyway) It probably should be part of all cirriculum for any degree. I mean... how can you claim to be educated if you don't understand at least the most basics of finance (rates of return, time value etc)

Too much job training in college, not enough wide spread education. I think that's in all fields though. Everybody seems to want college to be job training which it is not. (historically anyway)

 

[Weigand]

I recently graduated from PSU with a bachelor’s degree in Information Sciences and Technology. The curriculum did not include any Software Econ classes, but in my last semester I was only going to be carrying 2 classes, so I decided to add a Business Administration minor (needing only 4 more classes to fulfill the requirements). I’m glad that I choose to complete this minor, even though it was only a minor. I learned some very valuable skills including general business management, accounting, business law and MIS. I still wonder how they can forget to include these classes in IST, a curriculum that is part of the PSU School of Business.

the dude abides...