I seem to keep referencing economics when talking about testing, so here is my mini overview of the microeconomics courses as related to testing. Or at least the important parts.

Opportunity Cost

Read the wikipedia entry on Opportunity Cost, or for the lazy, here is the important part

Opportunity cost or economic opportunity loss is the value of the next best alternative foregone as the result of making a decision. Opportunity cost analysis is an important part of a company’s decision-making processes but is not treated as an actual cost in any financial statement. The next best thing that a person can engage in is referred to as the opportunity cost of doing the best thing and ignoring the next best thing to be done. Opportunity cost is a key concept in economics because it implies the choice between desirable, yet mutually exclusive results.

Sounds a lot like Technical Debt, eh? In fact, I would argue that they are synonyms; but from different lexicons. Example: By not internalizing our product now we can release it sooner, but we must forego something down the road to put that functionality in place.

Factors of Production

Someone remarked on Twitter the other day that they dislike seeing people described as resources (which is actually what got me back on this train of thought). This idea of people being a resource is taken straight out of the economic concept of Factors of Production. So what are those economic factors? This page describes them nicely. But again, for the lazy, the main ones are:

  • Land – Land includes all of the natural physical resources – for example the ability to exploit fertile farm land, the benefits from a temperate climate or the ability to harness wind and solar power and other forms of renewable energy. Some nations are richly endowed with natural resources and then specialise in the extraction and production of these resources.
  • Labour – Labour is the human input into the production process. It is inevitable that some workers are more productive than others because of the education, training and work experience they have received. What matters is the size and quality of the workforce. An increase in the size and the quality of the labour force is vital if a country wants to achieve economic growth
  • Capital – Investment in capital goods that can then be used to produce other consumer goods and services in the future.
  • Enterprise – An entrepreneur is an individual who seeks to supply products to a market for a rate of return (i.e. to make a profit). Many economists agree that entrepreneurs are in fact a specialised part of the factor input ‘labour’.

Everything used or involved in the production of anything, including software, can be described in these economic terms. Things get a little shaky around Land as software is a creation activity, but with a bit of sleight-of-hand it works still.

Availability of Resources

One thing I have heard James say a couple times is Testing is exhaustive only when the tester is exhausted (or something very close to that). This meshes nicely with one of the basic principles of economics which is ‘resources are finite’. And don’t forget that in this conversation people are resources, so ‘people are finite’ which leads to the idea that when the people are exhausted, so is your testing. How could they become exhausted? There are two main ways. The first is that their Time availability has exhausted (ran against a fixed release date). And the other is their Financial availability is exhausted (ran out of budget).

Other
The rest of a first-year microeconomics involved Supply and Demand curves and elasticity. I’m sure there use for those in testing, but I haven’t got their relationship quite figured out yet.