97 Things Every Engineering Manager Should Know

Chapter 55. Monuments and Hamburgers

Travis Donia

Work is often allocated based on CapEx and OpEx budgets. These allocations can happen via the organization chart, as a separate career ladder for engineers who are developing new products and features versus those who maintain software that’s already been deployed. In other types of organizations, the same team might do both, and it will fall on an engineering manager to help classify the expenses. In those cases, you might field questions from the finance department asking whether you can CapEx this project or set up a time tracker. It’s easy to brush these topics aside as bureaucracy, but by investigating how they work in your organization, they can help you to understand the business case for your team’s work. As a manager, becoming familiar with that business case and understanding the budget that funds your team will help you take on more ambitious initiatives.

First, some background. CapEx, or capital expenditures, are costs that go toward the creation of an asset that holds lasting value. Think of a monument. These are treated as an expense that is spread across the expected life of the asset. Sure, that pyramid cost us a lot to build, but it’s something we can amortize across thousands of years, so our cost per year is low. There are standards for whether an expense qualifies: it must already be feasible, and management ...