When we talk about our data-driven engineering vision, it's not the full picture unless we're also empowering engineering teams to turn operating expenses into capital assets.
Software cost capitalization is the first step towards optimizing your engineering assets, and improving the financial health of a company.
It is the intersection point of engineering and finance teams, and a powerful way to structure your engineering expenses, reduce the overall financial burden, and unleash engineering excellence even on a tight budget.
Despite all the potential benefits that cost capitalization brings; engineering teams still dread it. Tracking software capitalization has been a recurrent challenge for engineering teams:
- The ambiguity in GAAP rules about what can be capitalized. In today’s ever changing landscape, assessing the feasibility of your next product without any north-star can be a daunting task.
- Tiring, and time-consuming manual efforts to collate engineering data from multiple sources– VCS, issue trackers, project management tools, and budget allocation dashboards.
- Currently, engineering teams are squandering 500+ hours annually in just collecting data across the toolstack. A clear engineering expense, and silent productivity killer.
- Accuracy, and precisional challenges with no single source of truth
- Guesswork, anecdotal evidence, and conformity bias involved in calculating effort allocation
- Manually logging IC work hours can spiral into micromanagement, higher incidences of context switching, a haywire engineering team, and distracted developers disengaged from their core work items
- Logging work hours manually is a fast track to micromanagement, increased context-switching chaos, a team in disarray, and developers who'd rather be anywhere else but actively coding and grooming.
This manual burden derails engineering teams from putting their best version in work, and reduces engineering effectiveness at all levels.
R&D cost capitalization demands not just adherence to rules but a deep understanding of the engineering pulse. The balance between financial precision and the fluidity of technology is a tightrope to walk. However, it does get easier with the right set of tools, and objectively tracking software spending.
Cost Reporting Made Easy With Engineering Analytics
Manually collating data-points comes with enormous opportunity cost, and even lacks insights for engineering leadership to make sense of the outputs that lack outright precision, and accuracy.
The best way forward is engineering analytics.
Forward-looking engineering teams are riding the data wave to effortlessly sync their engineering resources with financial goals. No more hand-cramping, manual mapping of team efforts to cash-generating missions.
This means saving scarce manpower for more strategic initiatives- build visionary products, and budgeting effectively.
And Hatica does precisely that. We help you realize the true potential of cost capitalization for your engineering team.
Hatica pulls data from IDEs, VCS and code repositories, so you can monitor engineering costs in real-time.
What’s more is that engineering leaders can customize software capitalization reports for different projects, teams, and time period, and get a 360 degree breakdown of opex, and capex engineering efforts.