Business System Consultation Center - Our Business System ColumnVol.45 2014.08.01 Takahashi Minoru

System investment for regulatory compliance is not investment — it's just spending

Thank you for your interest and continued support.
This is Takahashi from the Marketing Plan Research Laboratory.


With the consumption tax rising from 5% to 8%,
I imagine many companies made “additional investments” to modify their systems.


We’ve also received inquiries from companies saying,
we received many inquiries
.


Once a system is built, making modifications
it naturally incurs costs for the modification.
Whether you view this as an investment or simply an expense (cost)
depends on the president’s perspective,
but our classification is as follows:


Items that can be considered an investment
・Costs associated with building and maintaining new systems
・Modifications required to accommodate an expansion of the system’s user base
・Expansion of system functionality (development of new features)
・System renewal (replacement)


Items that can be considered mere consumption or costs
・Costs associated with addressing system malfunctions
・Costs associated with adapting to changes such as tax reforms
・Support for version upgrades (e.g., OS changes)
・Functionality development requested by external parties such as business partners


From our perspective,
We view investment as “something we want to pay for proactively”
We view expenses as “things we have no choice but to pay for, or would prefer to postpone if possible.”
.


"If the law changes, we have to make modifications to comply"
"We have to make modifications to support the new OS"
These are unavoidable, but
if we’re going to spend money on the system anyway,
we often propose improvements to existing system functions or the development of new ones
I often propose improvements to existing system functions or the development of new ones.


Let’s think together and build up not just consumption, but also investment.


That's all, Thank you for reading.

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