by: Javier Aguayo
First let me define what economics really is. Economics is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices on allocating resources to satisfy their wants and needs, always trying to determine how these groups should organize and coordinate efforts to achieve the maximum output as possible. It is not only about money; it is about all the available resources.
Sometimes when we think about economics as an engineer, we do not really match this concept with our careers. It is ironic, because many future engineers are so worried about how much money are they going to make, because you know, they are studying an engineering, but they also despise economics as if it was a topic of another inferiors careers. Maybe this people see economics on the wrong way, looking only at the surface of a great science.
Software engineering economics is about making decisions, always related with our area of expertise, which is software development. It is very important to consider every decision on a project thinking about the benefits or loses that this decision is going to cause on the finance of the project.
Decision-Making process is very important, because usually it is a large difference in the costs and incomes between the options. There are many implications to take in count before making a decision, for example, if every option solve the problem from a technical perspective, then the selection of the most appropriate alternative
should be based on commercial factors, such as optimizing total cost, maximizing the short term return, etc.
The way to administrate or to see the results of your decisions is by the accounting part. Accounting is allowing people to know the results of their investments. Did they get the profit they were expecting? Accounting is very useful and necessary in every company.
My opinion
Well, an interesting fact about my life is that my parents are accountants, and they have a little company in which I work as an assitant. As an accounting assitant I have been familiarized with a lot of concepts about economics inside a company, but the weird thing about this is that I have never understand until now that every peso that I am registering belongs to a decision that someday someone did. It is awesome to think it that way, and this reflexion made me notice that. Ironic.
References:
http://swebokwiki.org/Chapter_12:_Software_Engineering_Economics
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