The Revenue Generator IT Organization (a.k.a. the Revenue Generation IT Organization) is an IT organization that independently packages, markets and sells pieces of itself or all of itself for revenue. Revenue is used to, at a minimum, offset expenses to the Business and, at a maximum, generate real profits.
Unlike the Order Taker and Advisor IT organizations types, which are viewed as Cost Centers that drain Business expenses, the Revenue Generator (or at least parts of it) is viewed as a Profit Center.
In its boldest form, the successful Revenue Generator will successfully sell to and exploit direct competitors of the Business it services because its own leadership and the leaders of the competitors’ Businesses both know that the IT services and products offered by the Revenue Generator will far exceed what the IT organizations of the competitors will be able to offer for the same costs. This is because the IT organizations of the competitors are commonly Order Takers and, at best, Advisors. In this scenario, the Revenue Generator has achieved an Economies of Scale Model through commoditization of its technical products and services, where it can provide such offerings in a sweet spot that is at a low enough cost to be very attractive to the competitor but high enough to make a justifiable profit. Significant profits are made by selling not to one competitor but to many (i.e. profits gained by higher sales volume).
In its most successful form, Revenue Generator IT Organizations generate such high profits that their Business gets IT services for free, while making more than enough in profits to control itself as a separate and profitable company (i.e. a separate legal entity).
There are many small IT organizations that achieve limited success in their attempts to provide revenue generating IT services. Usually they specialize in very limited areas of IT that benefit other small enterprises and very few rarely scale up to become large enterprises. For example, we can find many small companies that offer Web Site development and hosting services, along with basic Document Management and Email Services, with very few IT offerings that go beyond such basic things.
Only an extremely small percentage of all the mid-sized and larger IT organizations in the world fall into the Revenue Generator category. This is mostly because very few are granted the complete freedom, flexibility, and significant funding necessary to achieve such a level.
Traits of Revenue Generator IT Organizations
- Highest Levels of Available Funding: Because Revenue Generator IT Organizations generate their own revenue, they have far greater financial funding to spread throughout the organization. In many cases, there is money that comes from two sources: 1) The Business and 2) Revenue. This means that IT Organizations that generate revenue far exceed, both, Order Takers and Advisors.
- Highest Levels of Freedom to Act and Execute: Given the very high levels of available funding, there is a tremendous amount of autonomous discretionary-spend-freedom that is spread throughout Revenue Generator IT Organizations. Unlike Advisor IT Organizations, where the accountability for spend decisions tend to be at the higher levels of the organization, Revenue Generators push such decision authorities closer to the people doing the actual work. This means individual group and staff members get to make more autonomous decisions about where to spend their time. They are trusted to do so because their marching orders are to find the best ways to create even more revenue.
- Highest Levels of Creativity and Innovation: Because there is tremendous freedom and autonomy, and because there is a great deal of funding available for research and development, Revenue Generators usually have the highest levels of internal creativity and innovation. Their culture understands that waste is bad and that new groundbreaking features attract new customers while maintaining existing customers. As a result, they are continuously exploring, continuously learning, continuously researching, and continuously delivering impactful solutions. Their culture is to look, feel and act like a For-Profit business and they drive profits by out-innovating their competitors.
- Highest Levels of Internal Automation: One thing Revenue Generators excel at, by far, is internal automation. Like any company that manufactures product, quality and high levels of production throughput are of the utmost priority. As a result, just like any company that automates manufacturing, so does the Revenue Generator IT Organization. This organization understands that automation raises quality, raises delivery throughput and, most importantly raises knowledge maturity… because the data that is constantly collected from Continuous Integration and Continuous Delivery (CICD) build, testing, and deployment solutions becomes invaluable for establishing constant improvement feedback loops.
- Highest Levels of Technical Skills: Since Revenue Generators are always funding high levels of research and investing in their staff to learn more about different technologies and new ways of applying them, all in order to outpace their competitors, their employees tend to have the highest skill levels. In most cases, Revenue Generators understand that buying and integrating vendor software into their own offerings takes away from their potential profits (e.g. paying for vendor licenses and expertise) so they rely more on open source software and even build a great of their own software to do the same things as vendor software, driving the need for the highest internal skills to accommodate such strategies.
- Highest Levels of Staff Morale: Because there are very high levels of freedom, because there is significant funding to research new technologies and ways of doing things, and because internal skills are so high, employees in these organizations feel like they have a significant impact on the outcome of the success of the enterprise. As a result, there are very high levels of employee morale. Employees believe that leadership trusts them and gives them the freedom to solve problems, themselves, in the best ways they know how.
- Highest Levels of Staff Loyalty: Because Revenue Generators have the highest levels of employee morale and feel like they make a real impact on the outcome of company success, they tend to have the highest levels of loyalty to their leadership. Employees know leadership trusts them and, as a result, they work hard to maintain that trust.
- Highest Levels of Flexibility: High levels of freedom, funds to work with, and high levels of internal skill sets that are motivated to be successful equate to the highest levels of flexibility. Revenue Generator IT Organizations can adapt and change much faster than other enterprises and they usually have the capabilities to solve complex problems more than one way.
- Highest Levels of Transparency: Because Revenue Generator IT Organizations have extremely high levels of internal automation, they also have the highest levels of transparency. Just like with companies that have massive manufacturing plants, automated solutions in Revenue Generator IT Organizations continuously transmit data to many different monitoring and intelligence systems that are available to most employees and consultants, giving these organizations massive quantities of data that come from every work area. These organizations also have clear understanding that maintaining and tracking inventories of almost everything is critical for success. They work like large efficient armies that perform consistently across highly dispersed geographies.
- Highest Levels of Knowledge Maturity: Because transparency levels are high, because there is significant investment in education and in research, and because they tend to build and maintain many of their own solutions using their own resources, Revenue Generators have a very high Knowledge Maturity. They have significant quantities of documented and highly accurate resources that can be quickly accessed and leveraged by other people in the enterprise, regardless of where they sit, geographically, and they can provide that knowledge in many different forms to address specific contexts of stakeholders who need to access, see, and share knowledge in many different ways to accommodate the different ways they work.
- Highest Levels of Project Success: Because skills are strong, because funding is readily available, and because Revenue Generator IT Organizations are so flexible, Revenue Generators have very high project success rates as compared to Order Takers and Advisors. They have the internal competencies and tools to get things right the first time or to reign in projects start to go astray. They have much higher levels of confidence when starting projects because they know they have what they need to be successful. Most importantly, because of their high skill levels, they can take on the most complex problems in ways that far exceed, both, Advisor and especially Order Taker IT Organizations.
- Highest Levels of Vendor Autonomy: One of the most powerful traits of Revenue Generator IT Organizations is that they have very little reliance on external vendors for, both, technologies and skilled labor. Revenue Generators understand that every reliance on a vendor is an expense that you cannot control, yourself, so they move aggressively to remove such dependencies. For example, while Order Taker and Advisor IT Organizations go out of their way to avoid technologies like open source technologies, which they view as a risk to their enterprise, Revenue Generators view these technologies as low risk and a competitive advantage that eliminates their dependencies on vendors so they go out of their way to use open source and even espouse its communities’ principles. Simply put, Revenue Generators dislike dependency on vendors because vendors raise expenses and eat into profits so they go out of their way to eliminate such dependencies.
- Highest Levels of Delivery: Because of all the above traits, Revenue Generators have the highest levels of delivery, when compared to Order Takers and Advisors. This is because their skills are high, available funds are high, internal automation is high, and project success rates are high so they simply deliver more solutions with much higher levels of quality. This does not necessarily mean they do so for lower costs, since higher quality and throughput might take significantly higher investments. However, they know that selling their products and services offers an economies of scale revenue stream that provides clear break-even points with clear profit horizons, all which will offset their investments.
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