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OpEx vs. CapEx: A Paradigm Shift for Executives

Government innovators seeking to enhance and expand digital services for constituents are running into limitations with traditional capital expenditure (CapEx) funding models. Complicated budget approval requirements, long project lifecycles, and getting locked into specific solutions on a long-term basis are just a few of the many problems that program leaders and IT departments face with CapEx initiatives. For government technology projects in particular, the CapEx approach makes it fundamentally challenging to respond to changes in demand, and executives are finding it increasingly difficult to deliver on desired outcomes within this framework.

Considering the limitations associated with CapEx projects, operational expense (OpEx) is now coming into favor as the preferred funding model for delivering digital services and achieving strategic ambitions. This simple shift in mindset has liberated program executives and technologists, giving them a positive outlook in an otherwise challenging field.

The benefits of the “pay-as-you-go” model are numerous, including speed to service and outcomes, ability to iterate and continuously enhance solutions, improved access to modern technology platforms, and timely access to the latest innovations. Additionally, the OpEx approach results in fewer hidden costs and lower overall risk. It’s no wonder, then, that digital government and cloud services– which leverage the OpEx funding model– go hand-in-hand as top priorities for State CIOs, according to a 2022 survey by the National Association of State Chief Information Officers (NASCIO). Savvy decision-makers are increasingly transitioning away from outsized capital budgets toward a more operational mindset, allowing them to better serve constituents and stakeholders alike.  

M Corp’s platform solutions, delivered as a service, support the transition to OpEx so that government innovators can realize the numerous benefits of this modern approach. Instead of long project timelines with unexpected costs and high-risk profiles, a partnership with M Corp enables program leaders and IT departments to deliver customized digital services quickly, easily, and without the risks or headaches of traditional technology projects.

For organizations seeking greater speed and ease in realizing the benefits of innovation, the path to success is paved with OpEx solutions.