Capex and Opex terms are commonly appear in company budgets planning. Both are types of expenditure based on their allocation and taxation process.
Capex stands for Capital Expenditure, whereas Opex stands for Operational Expenditure.
Capex is a company’s investment in the form of fixed assets or adding value to existing assets. Opex is daily business operations expenses such as sales, general, and administrative costs.
Managed Services can turn Capex spending into Opex and have a positive effect on business. Cost flexibility and Managed Services facilities can increase the effectiveness of your business activities.
Want to know the positive impact of Managed Services IT in budget planning? First, gain an understanding of Capex and Opex along with its examples in depth.
Capex Definition
Capex is an expenditure intended to increase the value or acquire fixed assets for a company. Fixed assets are acquired using Capex expenditure is known as corporate investment.
The assets obtained from Capex expenditure have a long-time use, which is more than one year. Over time, these assets will experience a decrease in value resulting in depreciation costs.
Acquisition of assets in the Capex budget has a minimum value, generally around IDR 10 million. Even so, this value can change based on the scale of the company’s industry.
Examples of Capex are servers, production machines, warehouses, and routers. Capex assets procurement is carried out so business activities can run smoothly to increase revenue.
The impact of the Capex purchase will not be immediately apparent in the company’s earnings in the near future. Even so, the procurement of these assets is still needed to increase profits in the long term.
Opex Definition
Opex is expenditure for daily operations. The Opex budget supports the sustainability of fixed assets and ensures that the company’s business activities can run well.
Opex spending has no long-term benefits. In other words, it will run out at a moment’s notice. Generally, companies allocate most of their funds to Opex expenses. So that the potential for bankruptcy and financial difficulties for the company will be high if the Opex budget is not under control.
Examples of Opex costs are machine maintenance costs, domain rental fees, salary and commission fees, promotion costs, and building leases.
Capex and Opex are the grouping of spending budgets made by each company. Capex is expenditure to add value or acquire fixed assets, while Opex is regular expenditure to maintain the continuity of fixed assets.
So, can Capex expenses be converted into Opex?
Can Capex Become Opex?
Capex is generally considered a massive and risky investment. Without good planning, Capex can disrupt the company’s cash flow.
The Capex procurement process also takes quite a long time. As a result, it can hamper company activities if rapid infrastructure upgrades are required.
Careful consideration and calculations, both in terms of price and benefits, are required before purchasing.
Capex assets may be classified as Opex under certain conditions. This happens when the company does not purchase assets but utilizes a leasing system. This method allows companies to allocate their funds for other business needs.
Instead of purchasing assets, companies only pays periodic rental fees to the type of asset and facilities chosen. That way, when companies need assets with higher specs, these assets can be available more quickly. One of the services that can turn your Capex into Opex is Managed Services.
Managed Services as Your Company’s IT Team
Managed Services is the practice of outsourcing responsibility to maintain and anticipate the needs of various processes and functions. The main objective of Managed Service is to improve operations and reduce budget expenses by reducing hired staff.
Service providers perform on-demand services and bill customers only for work completed. It is suitable for a very diverse and rapidly growing IT sector.
IT infrastructure requirements are becoming increasingly unpredictable due to the rapid advances in information technology. Managed Services service providers are guaranteed to always be up to date with technology supporting various businesses.
With a rental system, various devices and services are available at once so that they can meet your business needs on time. Your infrastructure will be proactively monitored, and service providers will also recommend the most suitable service for your business.
Curious about other benefits of Managed Services? View the detailed explanation below.
Benefits of Managed Services
More Focus on the Core Business
The company’s business growth causes the company’s IT needs to increase. The amount of responsibility of IT personnel in your company can cause it to transfer to non-IT employees.
This can distract them from your company’s main business goals. Business effectiveness will be hampered and have a negative impact on revenue.
Managed Services free employees from the burden of IT development and return their focus to their main tasks. Your company only needs to hire essential employees.
Managed Services providers offer a variety of flexible service models so companies can determine the level of service required, whether it’s just for support or outsourcing your entire company’s IT department.
Expertise as Required
New technology creates new problems as well. The company’s IT team may not have the experience to solve these new problems.
Companies can recruit various experts or train existing employees to solve this problem. But with so many issues, the costs of recruiting and training can be very high.
With Managed Services, companies can enjoy the expertise of various IT professional teams by paying only a fixed monthly rate.
Unlimited Support Time
Managed Services service providers offer 24/7 support time flexibility, even during national holidays, to support your business activities.
Minimizing Downtime Costs
Managed Services Providers are proactive in conducting monitoring to identify, diagnose, and troubleshoot potential issues before they occur.
Reliable Point of Contact
Companies don’t need to worry about the turnover of recruiting experts because the Managed Services provider will prepare an escalation line or replacement contact who is ready to step in.
Capex can be categorized as Opex in certain conditions where the company no longer buys fixed assets but instead pays rental fees to enjoy various types of assets and selected facilities. One of the services that can turn your Capex into Opex is Managed Services.
Managed Services can extend the company’s choices because you can use an assortment of technologies and services without having to pay substantial funds upfront. There are several advantages of using Managed Services to manage your company’s IT infrastructure, namely, you can focus on the core business, enjoy experts as needed, enjoy unlimited support time, minimize downtime costs, and have a reliable point of contact.
Are you interested in ACS Managed Services? Call us for more information at +62 811 1944 534.
