No man is an island,
Entire of itself,
Every man is a piece of the continent,
A part of the main.
– John Donne
Thanks to Information Technology, I’ve built a successful professional software engineering career that pays well and keeps me eternally engaged. I’m not exaggerating when I say no two days are ever the same. Every day requires new thinking and new solutions to interesting problems.
Are there many other professions that can claim the same thing?
Technology continues to move at an ever faster pace, which is why most organizations have an Information Technology department in one form or another. An IT department is the steward for any applied technology an organization uses, just as the Accounting department is the steward for the financial health of the organization and the legal department is the steward for any and all legal concerns an organization may have.
Yet there is a peculiar problem with how IT departments operate within an organization, which I like to refer to as the “IT Vacuum Problem”.
There are two particular things I’ve personally witnessed about IT departments I’ve worked with, that act as detriments to the full potential of an organization.
- The IT cost center syndrome
- The friend or foe problem
The IT Cost Center Problem
We’ll start with this problem, but let’s make sure we understand the terminology first. A cost center represents a department within the overall organization, which contribute to the organization’s EXPENSES. That is, any and all incurred costs of the organization.
The way any organization makes money is with the following business formula.
GROSS REVENUE – TOTAL EXPENSES = NET OPERATING PROFIT.
What contributes to the gross revenue? It’s primarily the SALES DEPARTMENT of the organization. The sales department is responsible for bringing in paying customers interested in purchasing a company’s primary product or service. From the smallest mom & pop shop to the largest corporations on the planet, the sales department “brings home the bacon”.
It’s the reason why quarterly company meetings always start with information about gross sales for that quarter. Investors want to know from fiscal quarter to fiscal quarter, how much incoming revenue enters a company’s coffers. And more importantly, whether the revenue is continually increasing.
It’s no wonder why companies place high value and emphasis on the sales division of a company. After all, they are the ones crucial to the financial success of an organization. It’s why salespeople are considered so important, and get rewarded with fat commissions if they can manage to bring in new customers and potential revenue.
The “Total Expenses” part of the equation, is any sort of incurred costs generated by divisions of an organization, usually referred to as a “cost center”.
Departments like Human Resources, Accounting, Marketing, Operations and Information Technology, all incur costs. They don’t contribute DIRECTLY to the gross revenue that goes into a company. But that’s not to say they aren’t important.
What if there was no Human Resources department for an organization? A company wouldn’t be able to find the right employees to fill the roles of all the crucial job positions of a company, included valued salespeople.
The same goes for the Accounting department. Without skilled accountants, a company wouldn’t be able to accurately track the money flowing IN and OUT of the company.
The IT (Information Technology) division of a company is responsible for all applied technology used within an organization. It’s actually a pretty huge umbrella. It includes all computer hardware used within the organization as well as the software, operating systems, and applications that are either homegrown or purchased from a third party.
It also includes the network routers, the telephony, the technical support, the databases, and of course, all custom software application development that is handled in-house.
Yes, IT incurs costs, and usually doesn’t contribute directly to a company’s bottom line, unless of course, the company’s primary product or service is actually CREATED by the organization’s IT department.
But it’s amazingly easy to take for granted just how crucial IT is.
Say the company’s e-mail server suffered an outage. All of a sudden, all electronic communications to and from the company come to a screeching halt. You can bet everyone from the administrative assistant all the way up to the CEO will be urgently calling the IT Help Desk and asking when the e-mail server will be back up.It’s amazingly easy to take for granted just how crucial IT is. Click To Tweet
I’ve even personally seen a bit of negativity and attitude towards folks in IT. I still remember hearing about a sales executive making fun of the IT department of the company, and how they weren’t really a necessity to the success of the company.
People who don’t work in the IT department, often take for granted the huge amount of effort and maintenance involved in ensuring that all digital systems, networks, and applications are running smoothly.
While not directly responsible for creating direct revenue for the company, in most cases, these digital systems are crucial in enabling everyone, including the revenue generating department of an organization, to do their jobs.
Yes, IT is a cost center, but the cost is well justified. A company simply cannot afford to not have an IT department these days. The company who wins is the company who utilizes technology to maximize their revenue and gain insight into new revenue streams. The company who doesn’t is going to be left in the dust.
An IT department has the power to do the following;
- The power to automate redundant or manual processes which save money for company
- The power to create new products and services which are new revenue generators
- The power to provide valuable data and information to the top decision makers of a company
Yes, it’s usually the business division of an organization that focuses on new product development and ways to bring in new streams of revenue. But there isn’t any law that forbids other departments, including IT, from doing the same. Especially when someone from IT has the technical insight to know how implementing a particular set of technologies can help grow new products.
Which leads to the second major problem that contributes to the IT vacuum problem…
The “Friend or Foe” Problem
Sometimes the sales division of an organization will work at odds with the IT department of a company.
This can lead to serious conflicts and counterproductive results that will end up costing the company potential time and money.
We all know the salesperson is responsible for bringing in new sales and customers.
Yet I’ve seen salespeople promise the moon to a potential customer, in terms of features and functionality of the company’s product, without consulting with the technical division of the company.
This may lead to a new sale, but at the price of an impossible deadline for the IT division of the company to finish.
This often leads to death march schedules for the IT department in a feverish attempt to make the deadline, burnout the IT staff, and still not guarantee the deadline will be met, which will lead to lost confidence from the customer, and perhaps the customer deciding it’s just not worth it to do business with the company.
Sadly, I’ve seen this type of problem happen time and time again … the sales division of a company treats the technical wing of the company as a foe instead of a friend.
What SHOULD happen is the sales and technical divisions of the company need to be working closely together. When the business and the technical folks work closely together, you end up with a well-focused synergy. You end up promising and more important, DELIVERING, a product or service that the customer is happy with.