One of the biggest challenges in the public sector at the moment is budget uncertainty. Balancing a decreasing OpEx budget and the uncertainty of future CapEx is only getting more challenging.  

But what if there were a way to creatively leverage your OpEx budget and plan strategically for your CapEx spending?  

Just to be clear about the definitions, we consider CapEx to be the organisation’s capital budget (an amount of money that's usually given each year, or perhaps phased over multiple years) that's typically for a specific improvement in that financial year. It could be a system. It could be a project or a transformation program to deliver  

And then there’s the organisation’s operational expenditure, or your OpEx budget. This is usually allocated to maintaining “business as usual” and covering all your recurring costs, including payroll and software maintenance contracts. Again, this is typically an in-year budget allocation.  

For most organisations, their OpEx is typically a flat amount, but in recent years, more teams have seen this budget declining. This means that many organisations want to save money or are relying more heavily on their CapEx budgets to maintain and continue scaling up operations compared to previous years.  

This creates a big, ongoing challenge for the public sector…  

The biggest challenge with capital funds is that it often takes a long time for funding bodies in the public sector to make decisions, approve, and release the funding. Without clarity on the budget, it’s difficult to plan or get the required planning in place in advance to support your CapEx spending. Suddenly, the money lands, and you must then make quick decisions in order to spend and deliver what you've allocated within the year. 

We also see an added complexity in this scenario, as a result of this ongoing annual frustration, it can be commonplace for leadership in organisations to leave or change roles. This is because they get frustrated by the ‘feast and famine’ and the pressure to deliver capital projects in a very short timeframe, and they just cannot meet expectations.

This cycle of capital spending poses a major problem for many public sector organisations, as it leads to many quick decisions, sometimes at the expense of strategic action. We call this being “Stratical”. It’s the process of thinking strategically but only acting tactically due to the direct pressure of the CapEx budget landing late in the financial year.  

Getting creative with your OpEx budgets 

To overcome these challenges, we see organisations needing to be creative AND strategic in how they spend their OpEx budget.  

One of the most effective ways this can be achieved is by investing this OpEx budget in a service that fulfils a monthly role in the organisation, focusing on a particular area and ensuring you are being creatively strategic.  

For example, what CoStratify offers as part of our Transformation Enablement service is essentially a Chief Technology Officer-as-a-service model, which means your approach is focused on being strategic and planning ahead. That means if the CapEx lands late, you have a fully managed approach to dealing with this delay, as it is the responsibility of that service to accommodate and plan for this scenario, looking at all the what-if scenarios and being ready to go. So, instead of saying it is too late to implement a strategic approach, having that dedicated service always keeps your strategy and transformation plans up to date.  It allows organisations to pay a monthly amount to achieve a set of outcomes and have an integral role fulfilled. The main outcome is to continue business as usual, as if the ‘service’ is part of the team, and also, over time, hand over those skills and experience from the service back to the organisation to enable the team to run it and think in this way without a long-term commitment to a 3rd party.   

If you have any questions about how you can be more creative with your budget, or would like to find out more about our ‘as a service packages’, drop us a line today at https://www.costratify.com/contact-us.