Wednesday | 8 October, 2008
Computerworld
Making IT a profit centre
Michael Hugos 31/05/2004 14:44:38

Computerworld Buyer's Guide - Vendors Matched to this Article
Related Features
  • +

    Ticked Off at Tick the Box Mentality 04/02/2008 13:01:15

    Does your executive search firm know the difference between an MIS manager and a CIO, and if it does, can it explain that difference to its corporate clients?
    Does your executive search firm know its MIS managers from its elbow? Does it even know the difference between an MIS manager and a CIO, and if it does, can it explain that difference to its corporate clients?
  • +

    What Price Innovation? 05/11/2007 13:44:31

    CIOs say they want more than the traditional “your mess for less” relationship with their outsourcing providers. And the providers want to market themselves as partners in innovation. So why isn’t it happening?
    CIOs say they want more than the traditional "your mess for less" relationship with their outsourcing providers. And the providers want to market themselves as partners in innovation. So why isn't it happening?
  • +

    Strategies for Dealing With IT Complexity 24/12/2007 10:30:47

    Every innovation, every business process improvement, comes with an IT complexity tax that must be paid by CIOs in time, money and sweat. Here are strategies to mitigate the increasing complexity of IT as it enables new business.
    Every innovation, every business process improvement, comes with an IT complexity tax that must be paid by CIOs in time, money and sweat. Here are strategies to mitigate the increasing complexity of IT as it enables new business.
Additional Resources
Executive Guides
Whitepapers
Zones
Zone logoZones provide focussed content from Computerworld and leading technology partners.

Newsletter Subscription

Sign up for our Computerworld newsletters!
Computerworld's twice-daily news service keeps you in touch with the latest, most important headlines from Australia and around the world.
Keep up with the latest virtualisation technologies, products, news and features.
RSS Feeds

It's great to use IT to cut costs, but people expect that. How can IT be used to increase your company's revenue? How can IT be used to differentiate your company from similar ones? How can IT be used to better please the people your organization serves?

Think about this: how can you employ IT to enhance the value of your company's products or services by adding additional features that your customers will value? Let me illustrate the idea. I work for a company that sells basic commodity products: food service disposables such as paper cups, napkins and plastic spoons, and cleaning supplies such as mops, floor wax and paper towels. Our customers can buy these things from many suppliers. One of the main reasons they buy from us is that we use IT to significantly increase the value of the products we sell.

When customers buy from us, they get a customized package of value-added services that fit their specific operating needs. They can order using our Web-based order entry system or their EDI systems. They can use XML or FTP. Or they can phone or fax us. They get daily updated sales history reports through our Web site that show their usage of our products at each of their locations, by supplier, product and volume over any time period, from one day to three years. To invoice customers, we can send them electronic invoices or statements in any format they need in order to automatically import them into their accounts payable systems. We format and preprocess the invoices or statements to insert whatever special general ledger codes or other data their accounting systems may require.

All of these services enhance the value of our products. We work with customers to enable them to control who in their company orders our products and which products they can order. We then provide them with sales information that lets them do a much better job of planning and budgeting their purchases and monitoring daily usage of our products. We help them streamline their back-office accounting procedures. We even provide customers with weekly or monthly report cards that track our performance against certain agreed-upon key performance indicators.

These services enable us to provide tangible proof that we do indeed lower customers' overall costs. And all of these services required IT in order to become a reality.

Because of these services, we don't have to compete on price alone. Our prices need to be close to those of our competitors, but we don't need the lowest prices to win new business. In this way, IT delivers part of all the products we sell. IT helps my company actively manage its profit margins.

Try this: write up a description of the value-added services your existing IT infrastructure can add to the products or services your organization provides to its customers. Work with managers in your sales department to educate salespeople about these value-added services and train them in how to spot opportunities to sell these services to customers. When salespeople ask you to come out and meet customers and help them win new business, you will know that you have succeeded in jump-starting your career. Through helping your company add new value to its products, you have added new value to yourself. And, unlike my company's paper cups, you're no longer a commodity.

Michael Hugos is CIO at Network Services Co, and author of Essentials of Supply Chain Management (John Wiley & Sons, 2003)

Computerworld Buyer's Guide - Vendors Matched to this Article
Market Place

Computerworld Member Login


 

Smart SOA World Tour

Discover how SOA can create smarter outcomes for your business.

Attend and learn:

  • How SOA is helping leading companies to become more agile
  • Where you should be applying SOA processes in your company
  • The top SOA implementation mistakes to avoid

Click here for more information.
Whitepaper

Email Archiving 101—Customer Case Study

Join Lee Benjamin, a Microsoft Exchange MVP and Ryan Shipkowski, network administrator for Matthews, to discuss the process and ROI of implementing an email archiving solution, with emphasis on a case study from Matthews International.

Enterprise IT Buyer's Guide
Find Technology Vendors Fast
 
Find vendors by name | Find by category
Sponsored Links