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Should You Use CapEx or OpEx for IT Investments?

 
  Sherry Rahbar, Partner, CFO Edge, LLC  
   
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  Article Summary  
Whether Los Angeles and Southern California executives should use CapEx or OpEx for IT investments is dependent on weighing the pros and cons of both.

While the capital expense (CapEx) model has traditionally been used to buy software, computers and other IT equipment, there are a number of advantages for using the operating expense (OpEx) model.

Software as a Service (SaaS) and cloud computing present the attractive option of "leasing" IT equipment rather than buying it outright.

Reviewed in this article are seven benefits that can occur with an OpEx model, as well as five potential challenges that can come with it.

Deciding whether OpEx or CapEx is right for your business is based on an assessment of both models along with evaluations of potential vendors and risk factors.

Executives weighing the advantages and costs of OpEx and CapEx models can benefit from talking with a provider of outsourced CFO services with a proven track record of evaluating, implementing, and managing both models.

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