Delivery Reimagined - CAPEX to OPEX

Executive Zone >> Project to Product >> CAPEX to OPEX

CAPEX vs. OPEX

It's important to distinguish CAPEX from OPEX (Operating Expenditure):

CAPEX: Investments in long-term assets.
OPEX: Ongoing expenses for day-to-day operations (e.g., rent, utilities, salaries).

Think about how your software engineering team is funded compared to, say, the hardware team. The team that looks after the servers and networks is almost certainly an OPEX expense, while many companies still see software engineering as discretionary spending, so CAPEX.

Now, think about how your Marketing team is funded, I dare say there is some CAPEX, but for the most part it will be OPEX because it is challenging to qualify the return on Marketing expenditure, wisdom prevails that Marketing is a strategic cost of doing business. Isn't keeping software up-to-date, purposeful and efficient the same? Would you not say that many of the challenges your organisation has today is because of legacy software systems?

The project-to-product goal works, but it is near impossible to implement and attain the value of the benefits if your business still views the upkeep and evolution of software as an occasional cost that can be addressed through projects, AKA CAPEX funding models.

"This won't work for us!"

Then maybe not, don't reimagine and stay still, or keep funding running through projects. There is a middle ground, where the core of the resources is OPEX and then you adopt a framework that can flex by adding CAPEX funding for targeted "Business" projects.

CAPEX vs. OPEX

"This won't work for us!"

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