ORGANISATIONAL DESIGN INSIGHT

Epsilon Cost Scaling

How to transform isolated data scientists into an 80+ person distributed organisation delivering hundreds of production AI models

By The AK Dispatch • A case study in organisational design for AI at scale: reducing marginal deployment cost to near-zero

View All Insights

Epsilon (ε) Cost Scaling

The principle that once foundational platforms are built, the marginal cost of deploying additional AI products approaches zero (ε → 0)

Cost_n+1 → ε as n → ∞

Where n = number of deployed models

Product Management, Not Projects

Continuous design → research → MVP → test → evaluate → deploy cycles

Reusable Patterns

Complex systems teams build once, stream-aligned teams deploy many times

Automated Pipelines

Self-service deployment eliminates manual bottlenecks

Multiple Value Generation Points

Deploy at scale to create numerous opportunities for business impact

The Transformation

The Fragmented State

<10
Team Size
data scientists
6 months
Time to Model
for simple predictions
0%
Production Rate
no deployment path
Minimal
Value Created
POCs with no impact
  • Point POCs with no productionisation path
  • Data scientists isolated from domain engineers
  • Jupyter notebooks on sample data dumps
  • No understanding of data provenance or meaning
  • Predictive maintenance on rare failure events
  • Six months of work → zero business value

The Organisational Architecture

Four distinct team types, each with a specific mandate, working in concert to enable epsilon cost scaling

Global Distribution Strategy

To access top talent and maintain proximity to operations, teams were distributed across three continents:

5 locations
Europe

Close to headquarters and major operations

2 locations
North America

Access to regional operations and tech talent

1 location
Far East

Expanding operational presence

Strategic Rationale: Proximity to operations ensured teams understood business context, whilst global distribution provided access to diverse talent pools and enabled 24/7 development cycles.

The Transformation Journey

Assessment

Months 1-2
  • Identify bottlenecks
  • Audit existing capabilities
  • Map stakeholder landscape
  • Design target architecture

Outcome: Clear transformation roadmap

Foundation

Months 3-8
  • Build data platform
  • Establish MLOps infrastructure
  • Recruit platform teams
  • Create initial patterns

Outcome: Platform ready for scale

Scale

Months 9-18
  • Deploy stream-aligned teams
  • Launch complex systems research
  • Implement design thinking
  • Distribute globally

Outcome: Production AI at epsilon cost

Optimisation

Months 18+
  • Continuous improvement
  • Pattern expansion
  • Advanced capabilities
  • Organisational learning

Outcome: Self-sustaining AI capability

Critical Success Factors

Platform Investment

The 40% of resources dedicated to platform teams was the key enabler. Without robust data and MLOps infrastructure, stream-aligned teams would have remained stuck in the old paradigm.

Embedded Engineers

Placing domain engineers directly within data science teams eliminated the 6-month "translation" phase where data scientists tried to understand problems they weren't qualified to solve.

Complex Systems Teams

Research teams building reusable patterns meant stream-aligned teams didn't reinvent the wheel. One transformer architecture was deployed hundreds of times across different use cases.

Design Thinking

Technology adoption depended on user acceptance. The design team ensured solutions fit the cognitive models and workflows of both field workers and expert engineers.

Epsilon Cost in Practice

Model 1
Cost: £500K
(Platform + initial development)
Model 10
Cost: £50K
(Reusing patterns)
Model 100
Cost: £5K
(Self-service deployment)

The Epsilon Moment: When marginal cost approaches zero, the strategic question shifts from "Can we afford this?" to "How many use cases can we deploy this week?"

This shift from scarcity mindset to abundance mindset fundamentally changes how organisations approach AI investment.

Lessons for Replication

1. Invest in Platforms First

Resist the temptation to deliver quick wins before building proper infrastructure. The platform investment is painful upfront but pays dividends exponentially.

2. Co-locate Technical and Domain Expertise

Data scientists alone cannot define good problems. Domain engineers alone cannot build sophisticated models. Embedding them together is non-negotiable.

3. Separate Research from Deployment

Complex systems teams do deep research once; stream-aligned teams deploy many times. This separation of concerns prevents every team from solving the same hard problems.

4. Design for Users, Not Engineers

The most sophisticated model is worthless if users won't adopt it. Invest in design thinking from day one, especially when serving diverse user populations.

5. Think Products, Not Projects

Projects have end dates; products have continuous improvement cycles. The design → research → MVP → test → deploy loop should never stop.

The Epsilon Cost Paradigm

Scaling AI is not about having more data scientists writing more notebooks. It's about designing organisations where the marginal cost of deploying the next AI product approaches zero.

"When you can deploy a sophisticated ML model in hours instead of months, when engineers can self-serve rather than wait for data scientists, when patterns are reused rather than rebuilt—that's when AI transforms from a cost centre to a value multiplier."

— From building an 80+ person distributed AI organisation delivering $100M++ annual impact

Insight by The AK Dispatch

Based on real organisational transformation in the energy sector | Several €100Ms value creation across 10+ companies and sectors

← Return to All Insights