IT is often considered a Cost Center for an organization. It is viewed as an overhead expense and when determining which projects should move forward, senior management tends to considers cost of the IT projects as the key criteria for that decision. In more recent years, some organizations have begun to look at it in terms of a Profit Center, where the IT projects actually generate revenue for the organization and positively impact the bottom line. This has been beneficial for IT departments helping them to prove their worth within the organization.
This week, my new white paper, “IT as a Value Center (not a Profit nor a Cost Center),” was published, where I discussed yet another transformation the IT industry needs to make. CIOs (and an organization’s entire senior management team) need to consider IT as a Value Center. By doing so, organizations will keep a lens on maximizing value through proper prioritization of upgrades and enhancements of existing technologies to meet the ever-changing needs of their customers (both external and internal).
The white paper discusses the differences between the three schools of thought: Cost vs. Profit vs. Value. In my view, the value center approach flips today’s paradigm and positions IT decision-makers to focus on adding value to the balance sheet and to the customer experience.
I welcome you to download the white paper and share your thoughts on IT as a Value Center. Have you tried this approach in your organization and, if so, has it driven a stronger collaboration among IT and the business units?