I’m going to take a chance that my old accounting professors aren’t Sazbean readers because in this series of posts, introduced here, I will be violating some Generally Accepted Accounting Procedures. If Dr. Burke or Mrs. Kim are reading this, please click on this link.
In most companies the mail room still does not generate direct profit for your company. They are a needed part of making a profit, whether its delivering vendor bills to Accounting or customer’s letters to the sales departments, but they are not demonstratively profitable on their own. Traditional cost centers like office services, HR, help centers, and Research & Development are the first looked at for cuts during a downturn in sales because their contributions aren’t realized on P&L statements.
With the cost of some IT departments landing in the double digit percentages of total expenditures, elevated by the high salaries demanded by experienced workers, it is easy to understand how the label ‘Cost Center’ is putting a giant bulls eye on backs of our hard working technology professionals. Unless your company is a pure technology player, the chances are that your CFO has looked longingly at the options of down sizing or out sourcing part or all of your technology budget.
In this series of posts I will be setting up straw men and then knocking them down, because the idea that IT is still considered a cost center is a farce. When tallied directly, IT will be the greatest difference maker between profit and loss in your company.
In the first of this series, we will look at how IT can reduce costs in every area of your company, boosting profits logarithmically over the department’s cost. Then, we will discuss how IT should be the first place a company turns to help sales enter new markets, broadening the revenue potential of the company and lifting the bottom line directly.
Photo attributed to Monochrome