Using Story Points to calculate CapEx (Capital Expenditure) and OpEx (Operational Expenditure) in finance involves a combination of project management estimation and financial classification of work efforts. Story Points themselves are abstract units of effort and don’t map directly to dollars, so you'll need to translate them into time and cost first, and then assign them as either CapEx or OpEx based on Generally Accepted Accounting Principles (GAAP). Usually, CapEx/OpEx applies only to full-time Software Engineers (SWEs) and Quality Assurance Engineers (QAEs). It doesn’t apply to independent contractors or vendor teams. As such, only Story Points completed by full-time SWEs/QAEs should be used in your calculations. Moreover, only “New Development” and "Enhancement" work should be included in CapEx, while all remaining work should be included in OpEx. How to Classify Work as either CapEx or OpEx We use the following rough guideline to classify stories into CapEx or Op...
Cloud platforms like Amazon Web Services (AWS), Google Cloud, and Azure promised a revolution: infinite scalability, agility, and paying only for what you use. For many startups and enterprises, this was an irresistible siren song. But as businesses mature and scale, the melody often changes into a jarring cacophony of unexpectedly massive bills. It might be time to question the default "cloud-first" strategy. The Illusion of "Pay-As-You-Go" The "pay-as-you-go" model sounds efficient on the surface. In reality, it often means "pay for every little thing you touch," and costs can accumulate at an alarming rate, often unpredictably. A minor configuration change, a sudden surge in traffic, or an overlooked service running in the background can lead to budget overruns that make CFOs sweat. That predictable $3,000 monthly estimate can easily balloon into a $7,000 reality without clear warning signs. Beware the Hidden Costs Beyond the obvious compute ...