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

But what if there was a way of creatively leveraging your OpEx budget and planning 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 given usually each  a year, or perhaps phased over multiple years) that's usually for a specific improvement of some kind in that financial year. It could be a system. It could be a project or programme that needs to be run.  

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 are wanting to save money or are relying more heavily on their CapEx budget to maintain and continue to scale up operations compared to previous years.  

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

The biggest challenge around capital funds is that it often takes a long time for funding bodies in the public sector to make these 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 that, as a result of this ongoing annual frustration , it can be common place for the leadership in organisations to often leave or change roles. This is because they get frustrated with the ‘feast and famine’ and the pressure to deliver capital projects in a very short delivery timeframe and they just cannot deliver what is expected of them.

This cycle of capital spend poses a major problem for a lot of public sector organisations as it means that a lot of quick decisions are made, sometimes at the expense of acting strategically. We call this being “Stratical”. It’s the process of thinking strategically but only acting tactically as a direct pressure of 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 to focus on a particular area and make sure  that you are being creatively strategic.  

For example, what we offer is essentially a Chief Technology Officer as a service type model that means your approach is focused around 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 an amount per month to get a set of outcomes as well as 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 that 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.