Punctuated scalability

Punctuated scalability. It's a term I invented ripped off from Stephen Jay Gould's concept of punctuated equilibrium and it's a way to think about support cost. Here's what I mean. Look at this graph where we have cost per employee over here and number of employees over here. In most organizations the graph looks like this. In other words, when you have a small number of employees, you have really high upfront costs to start with. So the cost per employee is really high, but as the organization grows and you make more hires, the actual cost per employee declines even as the aggregate cost for support increases. So well, punctuated scalability is another way to look at this. Let's look at this chart down here. Here we have number of employees just like up here, but we have the total support cost, not the cost per employee, and when you graph it that way, you're going to see something that looks like this.

What's going on? Well, what happens is, there are points along this graph as you add more employees. We have big jumps in your support cost. For example, software licensing. If you have a software license that only gives you 25 seats, for the first employee up to the 25th employee, that cost doesn't increase at all, but once you make the 26th employee into the organization, you'll have to buy a bunch of more seats and so you have a huge spike in cost. So you've got to be concerned about licensing when it comes to scalability.

You've also got hardware. Obviously, you have to make sure that everyone has a desktop, or a laptop. But there is also storage considerations. A certain number of printers that can only be handled by a certain number of users and there again, you might have to add another network printer for every 10th or 15th employee and that's going to push these costs up along the way.

And then finally there's the whole question of support technicians themselves, the people who provide support. In most organizations, there is a ratio. One support tech covers x number of employees. So when you get to this point and you get to that x+1 employee, you've got to go out and hire another support tech, and as the organization grows you have to go out and do that repeatedly. So by punctuated scalability, I'm saying be aware of these choke points within the life of the organization where your spending is suddenly going to increase dramatically.