Sunday, December 17, 2017

CapEx, OpEx and the Enterprise Agile Coach

Are you considering becoming or do you identify yourself as an Enterprise Agile Coach?

To me at least, this implies a certain degree of knowledge of enterprise financial reporting.

As incremental or agile approaches to the delivery of value grow in popularity, the ability to understand the difference between CapEx and OpEx becomes increasingly important.

A large organization may need time to prepare or learn more to properly support some of the changes in approach. 

If for no other reason, consider your ability to be taken seriously during discussion with financially oriented people. 

Imagine that the difference might be the building of a 100 Million dollar asset versus the building of a 10 Million dollar asset and 90 Million dollars worth of expense (an oversimplification only to inspire research. My apologies to my accounting contacts).

Of course, there is much more to the enterprise agile coaching than this one topic, but ignoring it is not good for anyone.  I really dislike lose-lose situations.

Consider ......

At a minimum, you should be able to explain the difference between CapEx and OpEx and the potential impact to Balance Sheet and Income Statement.

If you can't do this basic task with understanding, think about your circle of influence or the circle of influence of the person you are trying to help.

Some ideas for you to get started....

- take a basic accounting course 

- ask a finance or accounting person for insight (a great way to build a new relationship)

- Ask yourself.. "How would I feel as an Investor in the company with the different results ?" (public or private)

- Read some books or articles.

- Ask yourself... "How will I prepare my client for inevitable discussions with regulators, shareholders, or auditors?"

- Consider finding an experienced person with enterprise experience to help you navigate and learn about this.

- Bring someone into your local meetup that understands this topic well.

Many transitioning companies will need some time to learn and assimilate new ideas. In some cases, lawyers may need to get involved to help navigate the change. 

A sample trigger phrase to remind you that you are in an environment where this is fundamentally important: "In service date".  

Enjoy what you learn :->