This week's MIT Sloan CIO Symposium brings together MIT academics and CIOs to discuss how IT leaders can overcome some of the common hurdles to
Don't fear your new revenue role, IT leaders
Intimidated about generating revenue? You fit the task better than you realize, says Ellucian CIO Lee Congdon
It’s becoming much more common for CIOs to be tasked with using technology to create new money-making opportunities for the business. It’s a consequence of the fact that in today’s environment, all businesses are becoming digital technology companies. But CIOs and their teams shouldn’t feel blindsided or intimidated by this new mandate. In fact, they may be more prepared and well-suited for the role than they realize.
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The IT organization typically has skills and expertise relevant to revenue generation that other parts of the enterprise do not. For instance, IT probably already has people who understand and deliver technical solutions to customers. Who better than those people to lead the way on revenue-generating technology investments? IT people are likely ideally suited because of their understanding of cloud solutions, mobility, and what technology-oriented consumers want and need.
Many emerging opportunities for revenue generation require a deep understanding of information security to ensure that the investment is adequately protected. IT is typically well positioned to do that. At Ellucian, we deliver a set of information security solutions through our cloud business unit in IT. Not only do the offerings generate revenue, but they enable us to develop a deeper understanding of our customer’s requirements and deeper relationships with our customers.
Do's and don'ts for IT leaders
Although IT is the logical owner of some for-profit services in this new era, there is a right way and a wrong way to go about it. As businesses are becoming more digital, IT must become more businesslike. Further, it’s important that all parties have a clear and shared understanding of the business objectives. IT must stay aligned with the strategy and the capabilities of the organization. It’s not advantageous for an IT team to create a small stand-alone, non-sustainable, non-growing revenue stream that isn’t aligned with the rest of the enterprise. Doing so could create customer dependencies that could be awkward or complicated if you decide to get out of that business.
Rather, revenue-generating initiatives in IT should be well thought out and appropriately managed. The objective isn’t to state, “We created a digital business.” Rather, it is to be aligned with the overall objectives of the organization and its customers. Initiatives should integrate with and support the overall business strategy. IT should think about how it’s going to grow customer relationships, rather than simply focusing on a revenue number.
A typical IT team already has the infrastructure, data, security, digital, and mobile skills and awareness to take existing businesses and extend them into new spaces. Because IT sees so many of the business processes across the organization, they may also be in a place to synthesize a set of requirements that define, for example, a variation of an internal service that can be developed and sold directly to customers.
The concept of IT as a revenue generator is likely to continue to grow. At the same time, business units are going to become more technology-oriented and have more technology built into the offerings they present to customers. This is a natural evolution of today’s environment, and one that IT is well-suited to lead.