Mention profit centers and most people immediately think of the IT department - don’t they? Well they should.
The debate about IT departments being a cost or profit center has been ongoing for many years. If data centers just keep doing what they have done in the past – data processing, ERP, desktop applications, helpdesk, IT infrastructure etc. – then it is just a cost of doing business. In other words, if IT just keeps the business running smoothly, like electricity for example, then it is hard to say whether it provides any competitive advantages.
But today it is different. If every company is becoming a software company, (and they are; look at Octo, Bosch, Siemens, DHL & ADAMOS) and if all executives must be conversant in IT, and if software is innovation driver number one in every industry, then it logically flows that IT departments must be the major profit center in the 21st Century. That might look like a very long sentence; just look at it as a very condensed business guide to our times.
The debate has come firmly down on the side of IT as profit center. Now and for the foreseeable future!
The next question is: “Are you maximizing your IT profits?” This should be the only conversation in town. Everything leads from this – digital business models, enterprise architecture management, dynamic regulatory compliance, wringing every last nuance from every last insight through streaming, real-time data, medium and long-term trend identification and responding to live business events, deep machine learning, optimized and automated business processes - all of it!
And I include maintenance. Maintenance is vital – you wouldn’t fly on an aircraft that isn’t maintained – or take a bullet train based on “The tracks were fine in 2003, so don’t worry…” So why should maintenance of your major profit center be viewed as anything but an investment in continuing business success? It stands to reason. If predictive maintenance is the name of today’s machinery game then this applies to software too. The IT department must provide a well-maintained, open, flexible and scalable infrastructure ready for any new business challenge thrown at it.
Only IT innovation and related maintenance can deliver the digital business services that enable you to survive and thrive in the digital economy; today’s value chain depends on them. IT represents the capability of organizations to succeed in the digital era and, as I cannot imagine that we will go back to the abacus, the digital era will last a long time. If IT is the competitive edge, the digital survival instinct, then every department must look to it for leadership and understand the innovations that it can deliver. This is what I mean when I say every company must be become a software company.
Are you already maximizing your IT profit? It should be the first question that any software sales person asks the CIO, the CEO, the CFO and the CTO – it is relevant to all and should be welcomed by all. But don’t ask unless you can answer it and, believe me, we can help you to do that. And, with customer-centric co-innovation as our standard go to market approach, we can help any enterprise answer the question too.
The IT budget as the main driver of enterprise profit is a subject that should be on the agenda of every enterprise. You don’t get the right answers unless you ask the right questions.