The Business of IT: Cost Center or Revenue Generator?

FEB 11, 2019

“The global managed services market was valued at USD 155.91 billion in 2017, and is expected to reach USD 296.38 by 2023, witnessing a CAGR of 11.32% during the forecast period, 2018-2023.”[1]

Long the go-to scapegoat for budget overruns, is it time for the marketing team to happily hand the cost-center baton to their IT colleagues?  Not so fast say CIOs and IT departments who stake claim to a much bigger role in the business.  Forward thinking IT leaders rely more and more on outsourcing to managed service organizations for enhanced applications, services and cybersecurity, enabling them to target their core strategic area.

A company’s day-to-day IT operations will increase operational efficiency and create predictable, recurring costs, enabling teams up to do other, revenue generating projects.  For example, an unencumbered and empowered IT team can locate and eliminate internal inefficiencies, identify opportunities through the analysis of data, determine technology threats and opportunities in the industry and better manage customers through CRM tools.

The Business of Data

Beyond “enabling” the business to “becoming” the business, IT should focus on enabling insights – “what moves the needle” with customer satisfaction, user experience, margin/revenue/EBITDA growth, etc. It is crucial to move to a data-driven organization and scale beyond KPIs to business insights where the business is proactively leveraging analytics to identify and unlock new opportunities.”[2IT can support and drive the efforts aligned to how a company utilizes the vast amounts of data it generates and focus on ensuring the resources and tools needed are available to the lines-of-business to mine and put the data to work.

The Business of Improving Customer Experience

Through the deployment of automation in areas such as IT Operations Analytics, Security: End-point, Identity & Access Management, SecOps, etc., data management, and more – internal IT resources can be freed up to focus on improving the customer experience through innovation – think technologies like chatbots and apps such as appointment scheduling.  How does this help with revenue?  Consider that a better customer experience will equate to improved customer loyalty and increased customer retention theoretically leading to a continuance and/or boost in customer spend.

CRM software is a good example of utilizing technology to view customer behavior and act accordingly with respect to offering a coupon or suggesting a newly released item even before the customer knows they need it.  Leveraging innovation and emerging technology through the IT team provides business the opportunity to enhance the customer experience and grow the business.

The Business of Developing New Products and Services

The office of the CIO is often a first stop when it comes to introducing new products and services to the marketplace.   Do we have the infrastructure to support the initiative?  Is the operations side of the business in lock-step with the Development team?  Do we have the resources to support the new offering?  Can IT help with the integration plan?  Does the offering create a security risk for the business?  These questions and more rifle through the IT department to ascertain the ability to support new products and services.

Reports show that developing new products and services rank near the top of the list for IT executives in terms of driving revenue generation.  So, the answer is yes – IT can support new initiatives with the understanding that investments may be required to support the opportunity.  Another consideration is how IT can enhance product development by creating tools to gather customer and partner input for new product or service designs and approaches.  Interestingly, many companies are opting to assign IT staff into product development and many IT execs take it a step further by advocating the integration of IT staff within business units.

It’s true, historically in many organizations IT has often been viewed as a cost center.  But the technology landscape in changing rapidly and IT is needed more than ever to ensure the business can support Mobile requirements, defend the Enterprise, enable applications, scale the infrastructure, govern the data, manage the data, respond to tickets, image machines… and the list goes on.  Today – it may also be very true to say that IT is a Revenue Enabler for the business.


As a Transformative IT Authority, Trace3 is the premier provider of IT solutions and consultation services. Through elite engineering and dynamic innovation, we empower executives and organizations to keep pace within the technology landscape through the transformative power of IT.  Learn more about Trace3 and how our Consulting and Engineering teams can help you and your IT team enable the business.




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