cost accounting

I’ve said it before, but I’ve seen it so many times in the last two weeks that I just have to get it off my chest again: measuring the benefits of a software project in terms of reduced staff costs or man-days is an error. As an accounting practice, it confuses the cost of a resource with the value of the things it produces.

This is one of the areas in which Taiichi Ohno and Eli Goldratt are in striking agreement. And yet in an organisation like the one where I’m currently working, cost accounting is deeply institutionalised, to the point that even the programmers have been infected. Unfortunately my projects are going to be measured in the same way…

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