That was a lot of adding and multiplying, I hope your calculator didn’t burst into flames. The point here is that even though you have a big and complicated problem, a big and complicated solution may not be the best way forward. It's amazing how many companies would go for Plan A without even giving it a second thought.
The second point, is that this explains why Agile development makes sense. It allows you to solve the problem in small chunks. Even more important, you may serve those chunks to the customer as you go along. As the numbers show, this significantly reduce the cost of delay present in traditional projects. It also enables you to continuously check whether it still makes economic sense to keep going. You know, instead of waiting years to find out if your investment pays off.
Those with some experience in these matters, will have figured out that I’ve played nice with my examples. In the real world, 50% budget overruns are nothing out of the ordinary. That would reduce the 5 year ROI of Plan A from 16 to 6 million, while Plan B would still make 38 million out of its original 40. That’s a shocking difference!
Finally, big and complicated solutions are expensive to maintain - To the extent that you may never break even. Your project may end up simply replacing the original manual labor with the manual labor now needed to keep the automatic system running. No high fives for you. At least it’s a great story to tell at the pub.
The next time you encounter a big and complicated solution, ask yourself if a much smaller one may exist. Even if the small solution doesn’t solve everything the big one does, it may still be the better choice.
(This article originally appeared in @thorbjorn.sigberg's Medium stream.)