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The question is whether the shape of the cost vs. size curve is an L or a U.
I believe it is a U as at the small end of the size spectrum you don't have the scale to be efficient, at the large end, the overheads and inter-communication overwhelms the benefit of larger scale.
I also do not believe the model that it is an L with a downward slope out to infinite size, because then the true cost of any activity is zero, ergo, being flat, there is no further economy of scale to be gained past a certain point.
Your experience has been borne out in my experience many times, and it is always complicated by the learning curve into the new "normal", which may include lessening service levels and increased workloads.
You have my sympathies. Been there. Done That (many times). Am the cause of it (usually).
Dennis
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