Custom Built Software Is a Depreciating Asset


Custom built software.  It occurred to me this week that this ‘asset’ as it’s categorized by GAAP is a depreciating asset, much like a car or piece of capital equipment ( machinery ).

Does it derive value?  Yes….indirectly.  But ultimately it’s value is underutilized, and quickly de-valued.

Imperfect as it is…there is little alternative….FOR NOW.   So what’s the best strategy for investing in this ‘asset’?

Minimize it.  The less you put in.  The less you lose.

Find the cheapest way to accomplish your custom software needs and invest in that first.  Any other investment strategy invites disappointment, and reduced expectations in the future.  This strategy, however stark, also recognizes the truth…..big things start small and simple.

Prove it out with a minimal project and then decide whether additional value could be derived.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s