It turns out that CIOs can transform the IT department into a revenue generator

It turns out that CIOs can transform the IT department into a revenue generator
Image Credit: Joe+Jeanette Archie

One of the biggest challenges that the person with the CIO job has is that the department that they are responsible for is more often than not viewed as being a cost center. What this means is that the IT department spends and spends and spends and never seems to actually bring in any money. Now I know that we all know all about the importance of information technology; however, to the rest of the company IT sure can seem like a big black hole. However, things are changing and some CIOs are discovering ways that the IT department can actually generate money for the company.

How Waste Management Sells Its Services

Over at Waste Management, they haul trash to the dump. They haul a great deal of trash. Last year the company earned US$13.5B hauling trash. However, even when you are making that much money, you still would like to be able to make more. That’s why Waste Management’s CIO decided that it was time for the company to launch an ecommerce site.

The purpose of the Waste Management ecommerce site is to allow their residential and business customers to purchase additional services from the company. These services can include such things as renting dumpsters as well as getting quotes for both trash pickup and recycling services that are offered by the company.

What makes the Waste Management ecommerce site unique is that it has been designed and is being run by the IT department. What this means is that the IT staff that have been assigned to run the ecommerce site now have sales quotas assigned to them that they have to fill. In order to accomplish this, the IT department plans on adding new products to this site every two months!

From Trash Man To Logistics Consultant

The ecommerce website is only the first step in Waste Management’s plans to transform their IT department into a profit center. They plan on putting the IT department in the center of additional customer-facing revenue-generating projects.

Waste Management’s IT department is planning on putting mobile devices on their fleet of trash trucks. This will allow them to measure such things as load weights, the route that each truck travels, along with how much time is spent at customer sites and at landfills. This will produce a great deal of data that can be combined with the customer related data that the company already collects.

Once the IT department has all of this data, they plan on transforming the company from just being a trash hauler to now being a logistics consultant to their customers. With the data that they’ve collected, they believe that they can start to make recommendations to their customers regarding how they can change their trash habits so that they can save money and recycle more.

What All Of This Means For You

IT departments exist to serve the rest of the company. That’s why in the past, the IT department was treated like a cost center and nobody really worried about where the money was going. As things got tighter, IT budgets got squeezed and now IT departments are being expected to generate revenue just like every other department in the company.

Over at Waste Management, they’ve gotten very creative with their IT department. They’ve created an ecommerce site that the IT department is now in charge of in order to sell more of the company’s services. They are also trying to transform the company from being a simple waste hauler to now being a logistics provider for firms.

Revenue opportunities exist for every IT department. As the person in the CIO position, you need to learn to keep your eyes open in order to spot where the revenue opportunities for your IT department lie. Get good at finding out how your IT department can generate money and soon enough your IT department will be making more than it spends!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: How much time do you think that a CIO should spend looking for ways for the IT department to make money?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

I’m often puzzled by the fact that most IT departments do a very good job of the day-to-day things that we are asked to do. I mean, there is a lot that goes on in an IT department each and every day and somehow we seem to be able to get it all done. However, when it comes time to do a large IT project for some mysterious reason, things seem to fall apart which is odd considering the importance of information technology. All too often we don’t get the project done on time or on budget. Why do we have so many difficulties with these types of projects?

{ 0 comments }

Complexity Is Something That IT Can Do Without

Complexity Is Something That IT Can Do Without
Image Credit: nerovivo

I don’t know about you, but whenever I see something that looks complicated, I am impressed. I mean, somebody took the time to make that and so based on the importance of information technology it must do something complicated very well. Well, it turns out that I’m wrong. Especially within our IT departments, the one thing that we don’t need any more of is complexity. It’s killing our productivity and eating up our budgets. What is a CIO to do?

How Did Things Get So Complex?

Can we all be honest here: no CIO ever sets out to make his or her IT department more complex than it has to be. Unfortunately, it just seems to happen. If you’d like a little bit of slack on this issue I think that I can give it to you. It’s not all your fault.

Instead, there are a number of different things that go on at most companies that contribute to the gradual increase in the complexity of the IT department. One of the real smoking guns is mergers and acquisitions. When those occur, CIOs always have grand plans to merge the two separate IT departments into one seamless IT department; however, for a variety of different reasons this never seems to happen. After the merger is over and done with, we’re left with two sets of everything in IT and things just got a lot more complicated.

As though that wasn’t complicated enough there’s also the challenge of shadow IT departments where other departments just go off and buy their own products and ask IT to take care of them. To round things out, let’s not forget about CIOs who establish standards for the company and then routinely don’t enforce them. In the end, you’ve got a complex IT department.

What Can A CIO Do To Simplify Things?

As the person with the CIO job, the responsibility for making things simpler falls squarely on your shoulders. There is no magic silver bullet for taking a complex IT department and suddenly making it simpler. Rather this is the type of problem that you are going to have to peel the layers of complexity away in order to get to where you want to be.

Somewhat surprisingly the very thing that makes IT so difficult may come to your aid in accomplishing your simplification tasks. Since IT is constantly changing, the person in the CIO position has the opportunity to be constantly creating and rebuilding different parts of the company’s IT infrastructure. If you focus on how the overall IT department can be made simpler, then each time you have the opportunity to rebuild you can simplify how it works.

A lot of modern technologies can help with this process. Not the least of which is the ability to virtualize your servers. The fewer physical servers that a company has to maintain, the simpler the IT infrastructure is going to be. This is a good step, but it does not go far enough. The next step that you have to take as CIO is to ruthlessly reduce the number of applications that the company uses. Every piece of software that is being used requires a team to support and manage it. Getting rid of software will greatly simply the task of running an IT department.

What Does All Of This Mean For You

Let’s all agree: complexity is bad. It’s bad for your company and it’s especially bad for the IT department. As CIO, it’s your job to prevent complexity in the first place and then to get rid of it if it does sneak in through the backdoor.

In order to get rid of complexity, we first have to understand where it comes from. The sources are many: mergers, shadow IT departments, failure to enforce standards, etc. When a CIO finds complexity, he or she needs to take steps to eliminate it. We have many tools to accomplish this. These include virtualization and reducing the number of applications that we need to support.

Complexity is a tricky beast for a CIO to fight because it never shows up to battle you. Instead, it sneaks in around the corners and before you know it, you’ve got an IT department that is battling complexity every day. Enlist the entire department to identify processes and systems that have just become too complex and then create simpler solutions to replace them with.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: How often do you think that the IT department needs to go on the hunt to find hidden complexities?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

One of the biggest challenges that the person with the CIO job has is that the department that they are responsible for is more often than not viewed as being a cost center. What this means is that the IT department spends and spends and spends and never seems to actually bring in any money. Now I know that we all know all about the importance of information technology; however, to the rest of the company IT sure can seem like a big black hole. However, things are changing and some CIOs are discovering ways that the IT department can actually generate money for the company.

{ 0 comments }

Do You Know How To Do Strategic Planning CIO?

May 6, 2015

If you ask any CIO to participate in creating a strategic plan for his or her company, you’ll probably see their eyes light up. This is what they live for – getting a seat at the big table to help chart the course of the company. We all believe that we deserve this position because […]

Read the full article →

Who’s In The Driver’s Seat When It Comes To Analytics Projects

April 29, 2015

You know, for years and years we’ve talked about trying to align business and IT and yet we never seemed to make much progress. Well I’ve got some good news for you: the arrival of analytics projects where large amounts of business data has to be crunched in order to get the answers that the […]

Read the full article →

How CIOs Can Mine Other Company’s Data For Gold

April 22, 2015

Data, data, data everywhere. Oh, and then there is that security thing. When you have the CIO job today, you have your hands full because of the importance of information technology just trying to stay on top of all of the data that your company is generating. Your responsibility is to create, store, secure, and […]

Read the full article →

Big Data Is Only Valuable To CIOs If They Know How To Use It

April 15, 2015

CIOs everywhere are being overwhelmed with talk about “big data”. This is simply using IT systems and tools to process very large data sets in order to answer questions about how best to run the company. What used to be too big of a task for anyone to attempt has become doable with new tools […]

Read the full article →

Big Data Comes To The Call Center

April 8, 2015

By now everyone who has the CIO job has heard about “big data”. What this is all about is using modern analytical tools to process very large amounts of data in order to identify trends and opportunities for the business that were previously unknown. The IT department plays a leading role in the big data […]

Read the full article →

BYOD: Is This A Good Thing Or A Bad Thing For CIOs?

March 25, 2015

Who’s responsibility is it to make sure that a company’s employees have proper communication tools? In the past, the answer to this question was simple – these tools were complicated and expensive and because of the importance of information technology it was the company’s job to properly equip their employees so that they could stay […]

Read the full article →

CIOs Need Learn How To Defend Against The Bad Guys

March 18, 2015

The person with the CIO job needs to understand that his or her company is under constant attack. Yes, some of the attacks come from hostile hackers who are always probing your company’s IT defenses trying to find a way in; however, we must not forget the impact that severe weather can have on the […]

Read the full article →

CIOs Need To Always Be Experimenting

March 11, 2015

How good of a CIO are you? I’m willing to bet that no matter how good you think that you are, you also realize that you could probably be better. We all believe this. However, now we run into the big question: how can a CIO become better? It turns out that the answer is […]

Read the full article →