In some mid-sized businesses IT has developed unique insights and services that could, in theory at least, be productised and sold to existing customers as a value-add, thereby creating revenue from a function that has traditionally only operated as a cost-centre.
But just because this is possible and usually puts a smile on the faces of business executives, doesn’t necessarily mean it is a good idea.
How should the IT leader think about and approach such an opportunity?
One of our IT Leader Mastermind groups recently tackled this question. Here is a summarised version of the outcomes.
The short answer is that IT has become so integral to the future success of businesses that it would in most scenarios be a grave mistake to go down this route.
There are just too many opportunities for adding massive business value internally as well as accelerate the overall transformation to digital across the business (read “SMEs Potentially Biggest Losers of Digital Disruption” to learn why this is so important).
A special case, however, exists when the proposed service is complementary to core business operations and when the internal IT function already delivers on the above expectations, has spare capacity and has an IT leader who likes to experiment and engage with customers.
In such a scenario, treating the productization of specific internal IT as just another business technology project that needs to be executed could very well lead to exciting new revenue streams from the existing customer base.
Key to the success of such an initiative would be to carefully consider the strategic implications (e.g. how would customers and partners respond) and to agree that this new capability would at some stage have to transition out of IT.
DX Sensei, Mastermind Facilitator, Abundance Thinker or CEO, call me what you like, but know this: I am extremely passionate about helping IT leaders from mid-sized businesses discover their true potential and realise just how important they are to helping their employer survive and thrive in our increasingly digital world.
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