Wednesday, 7 December 2011

IT a cost or a source of income

Is IT a cost to be minimized or a, sometimes in a roundabout way, source of income to be maximised.  For a long time companies has seen IT as a cost centre, a necessity.  IT started out as a way of giving your business an advantage.  As your competitors got the same or similar systems iITbecame more of a necessity than advantage.  This has lead to the thinking of coomoditating IT.  Seeing IT as a service that can be bought from somebody else sample in the recent growth of cloud services.  A way of hardware makers to sell you hardware without actually giving you the stuff. 
The people in IT then will want to redefine themselves.  This together with the need for IT directors ad CIO’s trying to gain entrance to the very top management means that they will try to make more of a mark.  Why not by, instead of being a cost,  becoming a source of revenue. 
Early attempts lead to the invention of internal cost centres.  The problem her is the word cost.  Now other departments see IT as even more of a cost.  Something that can be bought internally or sourced externally.  It brought the cost of IT to people that before wasn’t used to paying directly for anything.  And with that a backlash. 

If we think about it, IT is already a source of revenue generation for many businesses.  The growth of the web has seen to that.  IT runs websites that in some companies all sales goes through.  However this is seldom attributed to IT.  Even though they often sourced the system, organized all the technical necessary, and created the site itself. They are just the facilitator, and out of the goodness of their heart, or as a lack of being present at the top where these things are discussed, IT has let the company continue to believe that.  
There is many other examples on where IT is revenue generating.  Take the customer helpdesk or call centre.  Sometimes originally an extension of the IT helpdesk it facilitates the continued sale of your products.   And at some companies at a cost of contacting.
What IT becomes in a company often depends on the person in the IT director role (+his/her team)  some times, but not necessary, combined with the interest the CEO has of the area.  If your IT management is inventive and has a good business acumen they see the potential in the new trends of the market in areas like social advertising, network building and customer interaction.  With the current development rate IT has not yet reached the stage where it cannot bring business advantage for the inventive that can redefine the market by their differentness.  To state anything else is to say the world has come to its pinnacle of development and there is nothing more to be done. 
For the rest maybe commoditation is the way forward.  There is certainly enough internal naysayers, and external forces, that sees profits to be made, for that to work too.  But then you have given away a potential avenue of making your offering different from everybody else.  If you sit down and wait, eventually a competitor will seize the advantage.

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