System Economics
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Monday, May 12, 2003
 

Boyd's Law

Stowe Boyd highlights a research report he just wrote on Time to Get Real: Challenges for the Real Time Enterprise.  Most of the report is on systems that realize economies of speed, but he also offers his own law:

I get the opportunity to dig into the value of real-time communities, explore the rapidly emerging real time enterprise architecture from folks like Microsoft, IBM, and Oracle, and examine the explosion of instant messaging and its impact on business. I explore Reed's law and extend it into the real time context:

"The third law [explored later on as Boyd's Law] is what I call synchronization amplification: As companies seek to increase their individual responsiveness and decrease the impacts of volatility in their markets, they will increase their synchronous communications with partners, but the net effect will be an increase in asynchronous operations of the meta-enterprise. This seeming paradox is simply explained. A real-time enterprise will have more frequent communication with its partners – passing information from application to application, or conducting real-time communication between people. As a result, the latency in information transfer decreases. This means that companies in the meta-enterprise are free to take action on this lower latency information, increasing overall performance across the meta-enterprise."

Boyd's Law is one method of achieving economies of span.  When a company effectively integrates vertical production functions, sequencing results in lower transaciton costs.  This can happen both at the system economics and firm-level


2:29:42 PM    comment []


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