Figure 1. AI Agents in Action

AI Transformation at It From Bit

We’re sharing quantified impact data from AI transformation of our own software development with AI. We are a small AI consultancy, It From Bit, with 10 experts. Our three-person core team now matches what previously required six developers – without sacrificing work-life balance.

Figure 2. AI Agents – Impact on It From Bit

The impact compared to pre-AI development has been transformative (see Figure 2):

• 65% reduction in development costs

• 114% increase in revenue per developer per quarter

• Normal working hours maintained

Figure 3. AI Agents – Deeper Effect on It From Bit

Most revealing is how AI amplifies different experience levels (see Figure 3):

Experienced staff now run 3x experiments and find more creative solutions. Mid-level members reach high-quality prototypes in ¼ the time. Junior staff have learning curves cut in half and handle more complex work independently sooner.

Here’s what we learned: Success required rethinking our entire workflow, not just adding AI tools. Yes, there was an initial 20% productivity dip in month one. We overcame it by building capacity buffers and measuring weekly impact metrics.

Current reality check

While AI dramatically speeds up our prototyping (3x faster), production scaling gains are more modest, and developers spend similar time refining due to AI’s limitations. However, these tools already transform how we evaluate opportunities, allocate resources, and respond to market shifts.

Future view

We expect further gains within the next year with learning effects and upcoming development tool releases. New tools will increasingly address the production side of work as the remaining gains are most significant there. These advances will increasingly change the way businesses build, buy, and use software.

Written on: December 27, 2024