Complexity cost is the cost associated with making something more complex. Complexity can have a range of costs, including increased operational costs, higher maintenance costs, and greater difficulty in making changes to the system.
Adding complexity to a system or process can sometimes be justified if the value that is delivered by the complexity outweighs the associated costs. However, it is important to carefully consider the trade-offs between the value delivered by complexity and the costs that it incurs.
In general, it is important to strike a balance between the benefits of complexity and the costs that it imposes. Too much complexity can lead to inefficiency and increased costs, while too little complexity may not provide the necessary functionality or value. Finding the right balance will depend on the specific context and the needs of the system or process in question. The following are generalized examples of complexity costs.
It is more difficult to learn to use something that has 100 functions than something that has 10 functions.
It may be more pleasing and productive to use a tool that has 10 buttons as opposed to a tool that has 100 buttons. For example, an air conditioner with too many functions may be unpopular with customers who simply want clean, temperature controlled air.
Complexity may reduce economies of scale. For example, a production line that produces one product may produce far more total value than a production line that is stopped and reconfigured for production runs of different products.
Communication & Politics
Complex organizations face increased communication costs as coordinated efforts involve more stakeholders. Office politics may be more intense in a large firm leading to irrational decisions such as hiring middle managers to boost the status of an executive.
Complex things with many unique parts may be costly to maintain. For example, a machine composed of thousands of obscure parts may be costly to maintain as compared to a machine with dozens of commodity parts.
The cost of operating complex things. For example, troubleshooting software with 1 million lines of code may be more difficult than solving problems on a smaller code base.
Administrative and marketing overhead. For example, it is more costly to manage promotion, advertising, distribution, sales, pricing and customer service for a large portfolio of products.
The cost of procurement and managing a supply chain. For example, an organic cosmetic company that uses 12 ingredients from 3 suppliers may have reduced supply costs as compared to a competitor that uses 250 ingredients from 28 suppliers.
Complex things may be slow. Given the same resources, software with 2 million lines of code typically runs slower than software with 20,000 lines of code.
It can be costly to identify and manage the risks associated with complex things. For example, information security is more challenging in an environment with hundreds of different technologies as opposed to a single platform.
It tends to be costly to change complex things. For example, improving a food product with 3 ingredients is less costly than improving an aircraft with 2.3 million parts.