(Dis)economies of Scale in Business Software Systems Development and Enhancement Projects

In the software engineering literature it is commonly believed that economies of scale do not occur in case of software Development and Enhancement Projects (D&EP). Their per-unit cost does not decrease but increases with the growth of such projects product size. Thus this is diseconomies of scale that occur in them. The significance of this phenomenon results from the fact that it is commonly considered to be one of the fundamental objective causes of their low effectiveness. This is of particular significance with regard to Business Software Systems (BSS) D&EP characterised by exceptionally low effectiveness comparing to other software D&EP. Thus the paper aims at answering the following two questions: (1) do economies of scale really not occur in BSS D&EP? (2) If economies of scale may occur in BSS D&EP, what factors are then promoting them? These issues classify into economics problems of Software Engineering Research and Practice (SERP).