Looking ways to increase company income

[infinitelo]

I work for a company that does not directly sell technology. I would like to see real increases in saleries/bugets in the IT department. Other than the usual cost savings by increasing productivity/loss prevention, are there other ways IT can generate income.


if it is to be it's up to me

 

[jsteph]

You could have a bake sale. %-)

Seriously, I know of very few (actually none) companies--non-consulting firms or firms that don't sell IT--where the IT department is a profit center.

However, our company attempted to sell some interal software applications to similar industries. It turned out to be more hassle than it's worth. That's not to say that it couldn't be profitable, but the overhead and time involved in porting the app, meeting with prospective clients, almost requires you to hire a third-party broker, who would want most of the profits.
--Jim

 

[chiph]

jsteph -
I've seen companies that are a blend of product and consulting services, who only sell a product because of the services revenue it generates.

Chip H.


____________________________________________________________________
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[jsteph]

Right, but I think what infinitelo is referring to is a company that has an IT department, but that company's business is not IT related, either in product or services.

The consulting firm I used to work at did what you refer to--we sold AS/400's because they generated demand for our services in both the config/setup of the hardware, but also for us developing custom applications or selling commercial apps to them. We made very little money on the hardware, if any.

Now, I develop for a former client, and we tried to sell some of the friuts of my labor. We realized that we're either in the software business or in the widget-making business, but not both. So we just write off my time as the cost of doing business, and hopefully I can show that it's cheaper and better for me to develop in-house than buying off-the-shelf apps.

In this way, I can show 'profit' for our department in the same way my wife 'saves' us money by buying the $200 dress that was "$50 cheaper on sale"
--Jim

 

[chiph]

I suppose if you could become a micro-ISV by selling your product over the internet, and keep it low-overhead, that might work. By getting someone like Digital River to do your distribution and sales processing, you cut down the overhead (well, except for the percentage that D-R will charge, but that can be made up via increased pricing).

Chip H.


____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first

 

[SQLSister]

You forgot reduce costs. Suppose you are paying a consultant to do work, taking it in-house might save the company money. Other ways to reduce costs include getting new equipment with a lower maintenance cost (this requires some sophisticated cost analysis to prove you deduce costs by spending money, but it can be done if you are currently paying too much.

Change over to VOiP telephony and reduce telephone costs.

And on and on and on.

To be successful at this you need a good understanding of cost-benefit analysis. It can often reduce costs and not get credit fo doing so becasue the accountants only see the cost to purchase new equipment or hire new people and are not told the relationship between this and the current costs.

Questions about posting. See faq183-874

 

[kmfna]

SQLSister is right...I would first look for any cost saving features you guys could perform in house....from hosting your own web/e-mail servers to designing proprietary software you may paying licensing fees for...just be careful not to design too closely to your purchased products, lest ye be sued for copyright infringement....though, admittedly, bringing some stuff in house may not work out on a cost/benefit analysis...which is something I heartily recommend performing prior to any major process redesign decisions.

Good Luck,
Kevin

- "The truth hurts, maybe not as much as jumping on a bicycle with no seat, but it hurts.

 

[SQLSister]

Don;t forget when estimating your own time to triple the estimate.

Questions about posting. See faq183-874