I've often seen development groups (or their managers) dismiss a good idea with "we can't afford it." The irony is that the group is already "affording" other expenses - developer salaries, MSDN licenses, hardware, and office space - so the question really becomes not "are there funds", but rather "what is the best way to spend our funds". There are at least three common examples where, for some reason, many managers shun the best cost-benefit ratio.
Problem 1: "We cannot afford a star developer - let's get two average developers instead."
The irony is that one star developer is far more profitable than two average developers. The star will build complex things that a dozen average developers will never be able to dream of. The star will write more solid code that spares you costly production errors. The star will solve the same problems faster by leveraging advanced techniques (like code generation, refactoring, or just elegant solutions). So, if you're creating a team of more than 10 developers, exchanging the bottom two spots for 1 star is a good investment. ThoughtWorks, a world-class consulting firm, does a good job of demonstrating the profitability of this business model.
Problem 2: "We cannot afford that tool - just do it another way instead."
Say you spend somewhere between $70K-$120K on an average developer (not just salary, but benefits, payroll taxes, etc...). Let's use $100K for easy numbers. At 50 work-weeks (assume 2 weeks of vacation), that's $2000 a week to pay for a developer - i.e. $50 an hour. So, a $50 tool that saves your developer one hour a year is a break-even investment.
Now about the "power tools" out there - like CodeSmith (for code generation), or ReSharper (for refactoring), or Simian (for detecting code duplication), or NDepend (for code metrics) - say it's a few hundred per tool (i.e. less than 0.5% of your developer labor cost). However, a tool like CodeSmith fundamentally changes the rules of the game, and can save a development team hundreds of hours. Sure, you can try to find open-source alternatives to each of these, and if you find something that fills the niche you need - great. A similar problem applies to hardware (where's there's not an open-source alternative)- for example when management "saves" $200 by not providing sufficient memory on a laptop, such that every hour of coding is sluggish due to a slow machine.
For many groups, a manager refusing to fund this kind of software engineering "equipment" (sounds classier than just "tools"), is like telling a construction worker to dig a trench - but we can't afford a $20 shovel, so use this spoon instead. Again, if a company is creating a 5 person development team, better to have only four people, but funded with the right equipment, then five developers who need to dig with spoons.
Problem 3: "We cannot afford that book - just see if you can figure it out from free, online tutorials."
Of course everyone knows that continuing education is vital in software engineering. In the manager's perfect world, they have a team of self-motivated developers who study on their own time, paying for their own materials, and learning at their own expense. And then, the manager (who has contributed nothing) gets to benefit from having all these learned developers. While yes, a developer is ultimately responsible for their own learning and career, a wise manager would realize that the company has a huge vested interest in the developer's learning, and would hence do things to encourage that learning.
Perhaps the most basic thing a manager could do is to have the company pay for a book that the developer is motivated to read. A book costs between $30 and $50 dollars. If a developer spends 20 of their own hours (on nights and weekends) over a month reading and absorbing that book, such that they can now profit the company with a new skill, this is a no-brainer. It could cost management thousands to send a developer to training (plus the days off work). It could cost management additional thousands to fix mistakes resulting from the developer not knowing that profitable technology. A book is cheaper, can be re-read by other developers, and is often read off the clock. Money speaks, so if management can't even encourage a motivated developer's learning with a $30 every other month, they're effectively telling developers that management doesn't value learning.
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