For CFOs and executives

Development spend shifts
from expense to asset management

Move from P&L thinking to balance-sheet thinking.

In modern business, software is not a deliver-and-done fixed asset, but a financial asset whose value grows through iteration.

1. Paradigm shift: P&L thinking vs balance-sheet thinking

In traditional SI delivery and modern agile/DaaS, the financial definition of success is fundamentally different. Which lens guides your investment decisions?

P&L mindset (traditional)

  • 1
    Development spend equals cost Lower is better; reduction is the primary goal.
  • 2
    Goal equals delivery The project ends the moment the spec is delivered.
  • 3
    Risk equals change Scope change is a cost driver and should be avoided.

Balance-sheet mindset (next)

  • 1
    Development spend equals asset building An investment that generates future cash flow.
  • 2
    Goal equals LTV maximization Value grows after launch through continuous improvement.
  • 3
    Risk equals silence Change signals market fit and should be welcomed.

2. The hidden cost: opportunity loss

Delaying development by one month to finalize a perfect spec is not just a schedule slip. It wipes out a full month of future cash flow the product would have generated.

Insight

This chart compares 3-year cumulative profit for a product earning 3 million JPY per month when it starts now vs. starts three months later. Small delays compound into tens of millions of JPY in lost value.

3-year cumulative profit forecast (unit: 10,000 JPY)

3. Asset value over time: depreciation vs value growth

Unlike buildings or hardware, software can appreciate if you keep investing. The gap between 'deliver once' and 'grow continuously' widens exponentially over time.

Asset value lifecycle comparison

Traditional waterfall

Value peaks at delivery, then decays as markets move. Additional work is treated as maintenance cost.

Modern agile asset

Release is the starting line. Iteration based on feedback increases fit and LTV, raising asset value over time.

Investment cash-flow comparison

4. Shift investment style: from capex spikes to opex flow

Large one-time capex bets amplify failure risk. A sustained opex model keeps teams intact, spreads risk, and adapts to market shifts.

  • Capex lump-sum: High upfront risk, hard to change
  • Opex continuous: Risk spread, high adaptability

Conclusion: a new CFO yardstick

Time to market

Speed beats perfection to avoid opportunity loss.

Agility as value

Change readiness is insurance for asset value.

Asset growth

Define development teams as value engines, not cost centers.