# Optimize Resource Allocation & Cost Capitalization for Engineering Teams

> Enhance engineering efficiency by optimizing resource allocation and automating cost capitalization. Align team investments with business goals and improve R&D profitability.

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[Overview](https://linearb.io/platform/resource-allocation)
[Features](https://linearb.io/platform/resource-allocation/features#)

### Resource Allocation

[What is resource allocation?](#resource-allocation-what-is-resource-allocation)
[Why should you monitor resource allocation?](#resource-allocation-why-should-you-monitor-resource-allocation)
[How do you optimize resource allocation?](#resource-allocation-how-do-you-optimize-resource-allocation)
[Additional Resources](#resource-allocation-additional-resources)

### Investment Profile

[What is your investment profile?](#investment-profile-what-is-your-investment-profile)
[Why should you monitor your investment profile?](#investment-profile-why-should-you-monitor-your-investment-profile)
[How do you optimize your investment profile?](#investment-profile-how-do-you-optimize-your-investment-profile)
[Additional Resources](#investment-profile-additional-resources)

### Cost Capitalization

[What is cost capitalization?](#cost-capitalization-what-is-cost-capitalization)
[Why should you monitor cost capitalization?](#cost-capitalization-why-should-you-monitor-cost-capitalization)
[How do you optimize cost capitalization?](#cost-capitalization-how-do-you-optimize-cost-capitalization)
[Additional Resources](#cost-capitalization-additional-resources)

## Resource Allocation Features

## Resource Allocation

### What is resource allocation?

Resource allocation lets you visualize engineering investments based on teams, product domains, components, projects, and work breakdown.

![Resource Allocation: FTE allocation by issue type, allocation over time, and new value.](https://assets.linearb.io/image/upload/c_fit,w_2560,h_1382/f_auto/q_auto/v1/what-is-resource-allocation?_a=BAVMn6ID0)

### Why should you monitor resource allocation?

Resource allocation is a critical component of building a complete understanding of where your engineering organization is investing time and money and where you have opportunities to reallocate resources to improve the strategic impact of your engineering organization.

Resource allocation is what you use to keep engineering investments aligned with business objectives. A resource allocation dashboard provides an interface for identifying opportunities to reallocate budgets or headcount based on current objectives.

### How do you optimize resource allocation?

1. Monitor engineering investments to detect misalignments with business objectives and reallocate teams to ensure everyone focuses on high-priority work.
2. Empower engineering managers to have complete visibility into where their teams invest effort. Give engineering managers the autonomy to select focus areas to improve the balance between new features and technical debt.
3. Establish a benchmark for your investment profile that balances new value generation, developer experience, and keeping the lights on. Your investment profile is a critical component of building sustainable engineering profitability. Learn how to measure your investment profile.

### Additional Resources

[Blog: How Healthy Engineering Teams Invest Their Time](https://linearb.io/dev-interrupted/blog/how-healthy-engineering-teams-invest-their-time)

[Guidebook: Engineering Leader's Guide to Resource Allocation](https://linearb.io/resources/engineering-leader-guide-to-resource-allocation)

[Video: What Does Good Project Allocation Look Like?](https://www.youtube.com/watch?v=lsetO%5FlsbEU)

[Help docs: Resource Allocation](https://linearb.helpdocs.io/article/xrmcww51ht-resource-allocation)

## Investment Profile

### What is your investment profile?

An investment profile provides a high-level breakdown of R&D resources, new product development, infrastructure, and other projects that support new value generation.

#### New Value 

New features that increase revenue and growth via customer acquisition or expansion. Examples include new features or platforms, technical partnerships, and product roadmap work.

#### Feature enhancements

Improvements to existing features that help drive customer satisfaction. Examples include customer requests, performance improvements, security fortification, and initiatives focusing on adoption, retention, and reliability.

#### Developer experience

Improvements to developer productivity and overall work experience. Examples include improving tooling and platforms, adding test automation, restructuring code to reduce technical debt, and reducing backlog.

#### Keeping the lights on

Requirements to maintain daily operations with a stable level of service. Examples include maintaining your security posture, service monitoring and troubleshooting, and maintaining uptime SLAs.

#### Inefficiency pool

Resources wasted due to inefficiencies in the development process. Examples include excessive context switching, software development bottlenecks, and delayed responses to software delivery pipeline blockers.

![Investment profile and new value charts](https://assets.linearb.io/image/upload/c_fit,w_2560,h_1802/f_auto/q_auto/v1/investment-profile-new-value?_a=BAVMn6ID0)

### Why should you monitor your investment profile?

Long-term under-investment into critical engineering resources typically results in increasing unplanned work creeping into sprints. Engineering teams will increasingly encounter requirement changes and need to respond to failures and unexpected requests rather than productive work.

A holistic view of your investment profile makes it easy to identify areas that are over-invested. This lets you quickly reallocate teams and right-size your investments for long-term engineering profitability.

### How do you optimize your investment profile?

1. Set benchmarks for your team that right-size investments into each category depending on the maturity and needs of individual teams and projects. Track long-term progress toward optimizing your organization to generate new value while maintaining consistent investments in maintenance and overhead.
2. Monitor your inefficiency pool to identify opportunities to improve developer productivity. Invest in developer tooling improvements and workflow automation to minimize wasted time on non-productive work.
3. Build dashboards to track bug investment and rework rate to identify teams managing high volumes of technical debt. Reallocate engineering resources to reduce code complexity in projects that cause large numbers of failures.

### Additional Resources

[Help docs: Investment Profile](https://linearb.helpdocs.io/article/oaf32occ9w-investment-profile)

## Cost Capitalization

### What is cost capitalization?

Cost capitalization is automated financial reporting to categorize, track, and amortize R&D investments.

![DORA Benchmarks: Cycle Time, Deployment Frequency, MTTR, CFR](https://assets.linearb.io/image/upload/c_fit,w_2560,h_1515/f_auto/q_auto/v1/cost-capitalization-chart?_a=BAVMn6ID0)

### Why should you monitor cost capitalization?

R&D investments can create significant tax deductions for organizations that invest heavily in software engineering. Manually collecting cost capitalization data is a time-intensive process that relies heavily on guesswork and error-prone processes.

Automatic cost capitalization reports substantially reduce the effort required to report R&D investments and minimize the risk of introducing tracking errors, making it much easier to manage R&D investment amortization.

### How do you optimize cost capitalization?

1. Visualize your resource allocation across initiatives, product domains, specific components, etc., to get an accurate breakdown of R&D investments across your entire organization. Measure software engineering efforts based on code contributions and issue tracker activity.
2. Generate monthly aggregates or on-demand reports for your finance organization that break down budgets and FTE utilization to complete each unit of capitalizable work. Filter this data by individual developers, line items, or broader initiatives

### Additional Resources

## Now is the time to begin your journey

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