CAPEX AND OPEX DIFFERENCES

Capex Opex

Capex items are usually a one-off purchase charged to a capital account

Capital items are procured for a long period with a lifespan of many years

Capital items tend to be high value assets

Capex purchases often involve complex decisions with many stakeholders

Capex preparation work usually requires building a business case, investment appraisal and an assessment to buy or lease

Opex items are usually repeat purchases charged to a profit and loss account

Operational items are procured for short-term consumption

Operational items tend to be comparatively inexpensive

Opex is less complex and with repeat spends

Opex is usually straightforward, with predetermined budgets for regular use met by a budgeted Opex account,” Kontzle says.

“Of course,” he adds, “organisations will need to consider their own tax position and decide upon what process to apply for the acquisition of goods and services, and to assess which route is most suitable for their own requirements.”

FM budgets

When working in the public sector, FM consultant John Bowen used to toggle between Opex and Capex depending on the goal and available funding.

“There was always a pressure on reducing Opex, so budgets tended to get tighter year on year,” Bowen says. “One way to make that work is to spend capital, because a capital project has to ‘cost in’ and benefits will come – in part from working more efficiently. I’d look across the estate and pull several smaller projects into a big one because it’s often easier to get a big budget than a small one, so lumping things together works well.”

Bidding for a single big project carries risk as an unsuccessful bid could result in no funding for the subsumed smaller projects. But Bowen says it worked for him.

“Calling the big project a refurbishment, or something like that, enabled us to get buildings redecorated, refurnished and upgraded. Within that, we could normally get more people into the space, thus avoiding renting extra space, or reducing our occupancy. Anything we could find that worked as a saving towards the current or next year’s Opex budgets was fair game.”

Using Opex for Capex happens less, “usually when there was money in the open budget and we could get away with using revenue rather than capital”, Bowen explains. “The problem was around business rules on how expenditure had to be accounted for. It is quite easy to bury minor revenue work in a capital project, but to use capital funds on revenue work is normally not possible. We did sometimes do something that would normally have been paid for under a capital bid under revenue accounting, but it was rare.”

Budget reallocation can work well – but not always. “Sometimes it went pear shaped,” Bowen says. “I remember one job where we needed to put pallet racking into an area and we slipped that into the capital budget as part of a wider scheme at that site. All went well until one day when the accountant arrived wanting to see the capital asset. He was totally confused by several thousand square metres of pallet racking when he was expecting one item according to the asset register.”

Looking to switch budgets must be done with the right objective in mind, Bowen urges. “Get the best job done for the business. All the switches I made were done purely for that aim. I used my knowledge of how money moved and where to find it to that end. I needed to make things happen and I did it the best way I could whilst staying within corporate policy.”

Microsoft’s vision for meeting rooms of the future, alongside the ‘Signature’ Teams Room solution, incorporates enhanced meeting and collaboration tools such as Front Row and integration with whiteboard capture cameras.

Nevertheless, many think videoconferencing has gone full circle, with room solutions looking like traditional telepresence systems. But Microsoft has two main goals:

1. Everyone in the meeting feels included, represented, and productive; and

2. Connections feel natural and immersive.

The design principles drive guidance of Signature Teams Room solutions including furniture, layout and technology, as well as floor and wall finishes, and acoustic and lighting requirements.

No other organisation has yet to put out a similar statement identifying a need to transform meeting spaces to accommodate new ways of working. Cisco, Google and others simply adapt traditional meeting spaces with additional features and enhancements while Microsoft increases its share of the UC market with Teams and broader software integration.

Given the impact on room size, layout, and usage, Signature Teams Rooms and Microsoft’s vision for future meeting rooms require significant investment in, and modifications to, existing or proposed workplace strategy, meeting room quantities, layouts, and capacities. But is Microsoft’s vision likely to become a reality and will it be universally applicable or just for certain organisations or use cases?

For any organisation, let alone those not using Teams as their chosen UC platform, designing offices based on a single vendor’s strategy is risky. However, if companies choose to ignore Microsoft’s approach, they risk missing the next wave of hybrid working benefits. Will other UC vendors do as Microsoft has done?

To scale Microsoft’s strategy documents do not include fully scalable solutions. It has solutions for small and huddle rooms, and medium and larger rooms. But solutions for large areas – training rooms, boardrooms, client suites, divisible rooms, and events spaces – remain undefined.

Microsoft’s best practice information is absent for such spaces, and in creating curated, locked-down solutions for smaller rooms, Microsoft is limiting integration of its solutions in complex spaces. It is left to system designers to develop solutions based on multiple product sets that cannot be given formal Microsoft Teams Certification.

The message from Microsoft is clear: it does not support the use of Microsoft Teams in spaces beyond their standard meeting room designs. So companies face another choice: limit their workplaces to include UC integration only in meeting rooms up to a certain size, or deploy a bespoke solution in larger spaces. Choosing a UC platform requires that technology and spatial needs be considered together.

Experience equity

Experience equity for local and remote attendees is commonly requested, but we often see remote attendees prioritised through expensive and excessive solutions. It’s possible to provide remote attendees with a framed head-andshoulders shot of every local participant, but this isn’t the experience of those in the room.

Better to take a pragmatic approach, blending the possible and practical to deliver a costeffective, functional solution.

Consistency remains a challenge, not in small and medium rooms, but in larger, complex spaces. Designers, consultants and integrators must provide solutions that offer a consistent experience. Ultimately, the sky’s the limit –it’s up to us to bring this back to earth.

Creating inclusive policy is a continuous process. It never stops. It is about constantly re-evaluating the world around you, consulting with others and asking the difficult questions to ensure you are proactively making positive change. Not just reacting to negative incidents that may have occurred.

As part of our inclusion committee activities, we have been reviewing company policy and it became apparent that our policies in relation to change of gender expression were not satisfactory. To the point where people who were to go through a process of change of gender expression were not adequately supported by the business. Therefore, we agreed to create a new standalone policy to support this.

We called in our HR solicitors

The first step we took was to liaise with our HR solicitors and request a standard policy. We received a very cold, hard, factual ‘transition’ policy. After review, we knew this didn’t represent our values and we set about exploring how we could make it more fit for purpose.

We cast the net wider

To do this, we engaged with a wide audience. We accepted that within our teams we did not have enough knowledge to authentically build this policy. Therefore, we reached out to several different groups including our wider team members and LGBT+ in FM for support and advice.

Through the process we worked collaboratively to redefine the original document we’d received and made some key learnings in the process too. We’ve outlined these key areas of improvement in the hope of assisting others going through a similar process.

Key learnings

1. From the outset it is critical to recognise that this is an employee- led journey. The updated policy ensures there is no obligation for the team member to inform the company unless they wish to do so. The policy cannot dictate to people how to act in this scenario, only provide guidance and support for when it may be needed.

COLIN KIMBER (He/Him) is associate director at Pareto FM

2. No action occurs without consent. The team member is fully in control and the obligation falls on to the employer if, and only if, the employee requests it.

THE GENDER AGENDA