As necessary as it is, business technology tends to be expensive, especially when things go wrong. Historically, these costs took the form of capital expenditures, which meant they were inherently expensive and unpredictable by nature.
This is precisely why it is so important to shift your business IT to an operating expense. Let’s explore why this is the case and how to implement this change.
First, We Need to Understand the Difference Between CapEx and OpEx
How Capital Expenditures (CapEx) Work
Simply put, CapEx is the traditional model that we have all been accustomed to using for decades. If you need something, you purchase it and own it outright, using it and repairing it until it is ultimately too old and slow, or breaks beyond fixing. There are a few problems inherent in this option, primarily:
- Significant costs coming out of your capital.
- Depreciation eating away at your technology’s value.
- No sense of when expensive repairs or replacements will be necessary.
All this ultimately impacts your cash flow and hinders your ability to budget correctly, straining your finances. Additionally, it encourages businesses to hold onto tech longer than they should, which exposes them to decreased performance and security risks.
How Operational Expenses (OpEx) Work
Comparatively, the OpEx model is a version of IT services that utilizes the full capabilities of modern technology—specifically, remote connectivity—to ensure that it remains available to the user for as close to 100% of the time as possible. Rather than paying for a resolution to IT issues, the business effectively maintains a subscription to the outcome of working technology. This brings a few advantages:
- You aren’t subject to paying a complete sum up front.
- The cost is stable and consistent from month to month, boosting predictability.
- Everything within scope is included in the monthly cost, with the provider ensuring uptime by repairing or replacing troublesome equipment.
As such, cash flow and budgeting are secure, and a business has access to the best IT available to them.
It’s Clear… For Modern Businesses, OpEx is the Right Choice
The question that you now need to answer is whether you’d rather contend with unpredictable costs and stress or operate with predictable spending and confidence.
If the latter option sounds preferable, CoreTech is here to help. Reach out to learn about our outsourced managed IT services and how they’ll turn your technology into a truly beneficial component of your business strategy. Call us at (270) 282-4926.
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