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Does your organization have a capex habit?

Detox from technical debt

It’s true – capitalizing the cost of an asset often makes a lot of sense. Assets can require significant investment over a number of years, and the benefits aren’t realized immediately. Transformation takes time. Capitalization seems like an obvious solution.

But it’s easy for management teams to get addicted to the instant high of a buy-now, pay-later mindset. Many organizations fall into the trap of saying, “If it can be capitalized, then capitalize it.”

In fact, the costs of a capitalization strategy can be significant. You may already be experiencing long-term fallout such as

  • Compounding depreciation

  • Increased opex pressures in years to come

  • Asset write-offs or write-downs

  • Increased administrative overhead

  • Misaligned priorities

  • Institutional knowledge loss

But recovery is possible. At cShell Consulting, we have tools that can help you assess your capitalization patterns and eliminate the risks that are driving harmful practices. It’s never too late to break the capex habit.

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