The question of scale economies in software—why cannot researchers agree?

This paper investigates the different research results obtained when different researchers have investigated the issue of economies and diseconomies of scale in software projects. Although researchers have used broadly similar sets of software project data sets, the results of their analyses and the conclusions they have drawn have differed. The paper highlights methodological differences that have lead to the conflicting results and shows how in many cases the differing results can be reconciled. It discusses the application of econometric concepts such as production frontiers and data envelopment analysis (DEA) to software data sets. It concludes that the assumptions underlying DEA may make it unsuitable for most software datasets but stochastic production frontiers may be relevant. It also raises some statistical issues that suggest testing hypothesis about economies and diseconomies of scale may be much more difficult than has been appreciated. The paper concludes with a plea for agreed standards for research synthesis activities.