INDUSTRY INSIGHTS YOUR PEERS ARE READING
It also has a huge impact on cost, productivity, and customer service. MORE
We call these people Cost Center Consumers, and they come in two flavors. Divas: These are high maintenance consumers who drive costs up after purchase. They tie up your call centers, incur costly returns, and generate other costs that occur below the gross margin line, which is harder to see. calling plans, ancillary devices like headphones or chargers, international calling, home internet, cable) as well as their true cost to serve (e.g., MORE
My favorite: HR as a cost center. My favorite: HR as a cost center. MORE
But replicating the facility- and labor-intensive American model — which is more costly than that of any other nation yet produces subpar results — will set these emerging economies on the same course of endless cost escalation that has plagued the United States. One major reason for the rapid cost inflation in health care is burgeoning hospital construction. Insight Center. Victor Albrow/Getty Images. MORE
Who at your company will be put in charge of turning buildings operations from a cost center to a revenue center? Cost Savings. Energy Information Administration, with a combined annual energy cost of over $200 billion. And many companies also face additional energy-related costs from their commercial vehicles, of which there are over 12 million in operation in the U.S. according to IHS, incurring fuel costs in the billions annually. MORE
If you are running a large company anywhere in the world, you have almost certainly asked yourself some version of this question: “How can we get tens of thousands of employees to deliver memorable customer experiences that enhance our brand, all at a reasonable cost?”. In a customer service center, for example, you would create scripts for every possible interaction. To keep costs under control, you’d set goals for reducing it every year. MORE
Captive offshore operations centers — company-owned delivery units located in low-cost countries such as India and the Philippines — have come a long way. Originally designed to provide labor cost arbitrage, they are now on the brink of being a source for strategic advantage. Since 2008, we've benchmarked the performance of nearly 250 operations centers working on both core operations (e.g., Cutting costs Global business Operations MORE
As founder of the Center for Hispanic Leadership, I can attest to the fact that the U.S. Full disclosure: I teach classes on this topic at the Center for Hispanic Leadership.) Think profit center, not cost center. According to the Center for Talent Innovation , only 5% of mid-level Hispanic managers have sponsors, as Hispanics have not been as effective at earning a seat at the table with senior executives. MORE
Talent, purpose, culture and creating meaning is the peopley work mostly viewed by the performance folks as "cost centers," or departments that exist only to manage legal risk. Every day I go to meetings where language suggests people are cogs. MORE
They make the workplace more political, needlessly enforcing nerve-wracking centers of power. This is pain avoidance up the ladder at the cost of pain induction everywhere else. Your competitor is getting nothing but a disingenuous cost center. MORE
Typically an in-house cost center, service is usually viewed as a necessary evil and constantly targeted for "efficiency." Over time, notable service firms built outsourcing capacity in India, Malaysia, Singapore and elsewhere to allow any firm to have a global service workforce at low cost. Isn't This Just Another Way To Cut Costs? A Stanford Professor quit his job. But he doesn't plan to go to another prestigious university. MORE
For one, it’s a cost center. Marketers get no respect, writes Ivey Business School professor Niraj Dawar on INSEAD's blog. The CEO wonders how you spend your time, the CFO wonders how you spend the company’s money, the sales folks think you’re too conceptual, too abstract, and not sufficiently focused on the immediate business, and the production and supply chain guys just think you’re full of hot air.". MORE
Certain aspects of IT fall squarely under the category of Risk Management and are generally considered a “cost of doing business”. However the level to which a solution is implemented is weighed against the cost of the risk it is designed to mitigate. Survive Your Promotion! MORE
GFNorte recently established a Central Analytics Business Unit (ABU) with the mandate to convert information into profits at a rate of 10X cost and to lead the adoption of a customer-centric approach within the organization. The results significantly exceeded expectations: In its first year the ABU yielded profits 46X its costs, in the second year 106X (equivalent to $275 million of net income), and during its third year it is on course to produce 200X. David Malan/Getty Images. MORE
“It’s already changing organizations, by moving IT from a cost center to something with a place at the table in a lot of different meetings,” said Chris Jackson, head of cloud platforms at Pearson, a global learning company. The cost may be lower, but like traditional computers, it is still a cost. Others use cloud computing software in their own data centers, as a means of increasing resources and working faster. yagi studio/Getty Images. MORE
The health care industry is now focusing on value-based care — improving the health of populations while reducing costs. The overwhelming majority of health care costs involve managing patients with chronic conditions such as diabetes, heart disease, and asthma. Insight Center. MORE
Many of the small and midsize manufacturers that did manage to survive kept going by cutting costs, which has led to stagnant wage growth. Some companies that built lengthy global supply chains have wound up with greater complexity and costs than they anticipated—not to mention greater exposure to a whole host of risks, including currency fluctuations, geopolitical disruption, delays, quality issues, and reputational risk. These costs are significantly higher for U.S. MORE
Usage brands, by contrast, elevate customer service and loyalty from resource-starved cost-centers to key drivers of growth and profitability. Ilka & Franz/Getty Images. What makes a brand successful in the digital age? A joint study by SAP, Siegel+Gale, and Shift Thinking suggests that digital brands don’t just do things differently; they also think differently. MORE
Other organizations are simply cost centers and the budget is a reflection of expenditures only. The primary organizational responsibility of every executive and manager is the diligent management of resources. MORE
Government in its entirety is a cost-center to society, so we desperately need to create not just jobs, but private sector jobs. Europe's young people are bearing the brunt of the fallout from the collapse of the financial system and the struggle to save the Euro. In Britain, where I live, youth unemployment has topped one million. In Greece, the rate is nearly 50% — that's one out of every two young people in the country. MORE
IT was viewed as noncore, a cost to be outsourced like janitorial services and security. But surveys show that more than 25% of firms still think of IT as a cost center, 53% of CIOs' time is focused on cost control, and 54% of companies outsource their IT services. It's easy to fall into the Kodak trap, especially in austere times when there's almost overwhelming pressure to cut costs. MORE
Like marketing, IT is often seen as a cost center rather than revenue generator. While many teams within your organization contribute to your success, one that cannot be overlooked or understated is the relationship with your IT group. MORE
The standard approach is to apply tough cost control. That generally means that front line, in many cases, are the lowest cost of labor, who are generally working off a well-scripted common recipe of how to provide tech support. Reinventing Corporate IT An HBR Insight Center. MORE
Who at your company will be put in charge of turning buildings operations from a cost center to a revenue center? Cost Savings. Energy Information Administration, with a combined annual energy cost of over $200 billion. And many companies also face additional energy-related costs from their commercial vehicles, of which there are over 12 million in operation in the U.S. according to IHS, incurring fuel costs in the billions annually. MORE
Given that the service department is a cost center in most companies, service leaders have long relied on AHT as a critical lever for keeping staffing levels, and therefore costs, in check. It’s not unusual to walk into a contact center and see “leader boards” and stack rankings publicly celebrating those with the lowest AHT and shaming the slowpokes. Most fear that doing so would cause call length to skyrocket, increasing costs. MORE
Mega weather took many lives and cost over $120 billion in the U.S. Individual companies are feeling the bite: analysts at Morningstar estimate that input costs at Tyson Foods will rise by $700 million — more than its 2012 net income. MORE
These efforts have enabled operational efficiencies, cost reductions, and greater agility, preparing companies for the next phase of digital transformation: driving growth. We expect the next few years will continue to see a lot of shuffling around in the C-Suite as companies turn their attention to growth, recognize the insufficiency of incrementalism, and place the customer experience at the center of their transformation. There are some new faces these days in the boardroom. MORE
Here are her ideas and reflections: Chief Marketing Officers (CMOs) are usually under pressure because most organizations see marketing as a cost center and are not aware of how it is contributing to the bottom line. Q: Do you have any specific suggestions for marketing executives in this challenging climate? A: Great question. During hard times companies often cut back on marketing budgets. MORE
In too many companies, IT leaders, relegated to their cost centers, are subordinate to other C-level executives. Just recently, InfoWorld magazine pointed out that CIOs have split into two groups: those who are driving value and those who are still trapped inside the data center. Recently I’ve been having a very hard time talking to students, executives, and business leaders about information technology. MORE
The internet may seem to exist in the ether, but its plumbing includes a vast network of data centers, also known as server farms, which need power to function. In 2010, data centers represented 2% of all electricity use in the United States. MORE
To get the most out of this substantial cost center, employees and employers need to maximize attention and retention at every meeting. Americans have more than one billion meetings per year. MORE
On the other hand, they are set up as cost centers and service bureaus, mandated to meet the needs of all their constituents as rapidly as possible under the ceiling of their budget. Most companies struggle to differentiate themselves. MORE
As founder of the Center for Hispanic Leadership, I can attest to the fact that the U.S. Full disclosure: I teach classes on this topic at the Center for Hispanic Leadership.) Think profit center, not cost center. According to the Center for Talent Innovation , only 5% of mid-level Hispanic managers have sponsors, as Hispanics have not been as effective at earning a seat at the table with senior executives. MORE
I observed that leaders often treat security as a liability cost — until the company experiences a security breach, after which increased support is a given. Insight Center. Instead, it was forged by individual engineers and managers who recognized the opportunity to collaborate across the organization for improved performance, lower costs, and faster development cycles. MORE
Many businesses view marketing as a cost center without recognizing how it contributes to the bottom line. Many marketers make the mistake of talking about lowering costs instead of talking about increasing revenue. Marketing is everywhere, but with the ubiquity of slogans and ads, it's easy to forget that there's more to marketing than meets the eye. As a result, it is often one of the first budgets to be cut in economic downturns. MORE
IT is asked to the table far too late to advise on the difficulties of consolidating systems after a merger , then faulted when the task takes longer and costs more. We propose business and IT work in that direction by bringing a few tough technological trade-offs front and center, with the goal of finding some middle ground. Today, this topic simply doesn’t come up often enough, leading to a one-size-fits-all approach to managing IT, often as a cost center. MORE
Among the trends are an increased emphasis on project management soft skills, the Project Management Office (PMO) being viewed as a potential profit center (vs. a cost center), sustainability aggressively planned into projects, and an increased emphasis on corporate social responsibility. MORE
HR is an enigmatic profession, as the authors write, “the sad reality is—even in today’s enlightened age of recognizing the value of people to the business—too many top executives still view HR as a non-strategic cost center instead of a core, profit-contributing function.” Most HR Departments have developed a matrix HR Structure with Generalists (Advisors or Business Partners) mixed with Specialists (in Centers of Excellence, aka COEs). MORE
Rather than serving as an adjunct to the core business, or merely a cost center, IT is becoming intrinsic to the very products and services that every company offers. "You only gain an edge over rivals by having or doing something that they can''t have or do," wrote Nicholas Carr ten years ago in his controversial HBR article, " IT Doesn''t Matter.". MORE
Similarly, the role of the dealmaker is to find a way to drive the “cost” of the deal down to as close to zero as possible — so the decision maker can’t possibly refuse to buy that ticket. MORE
Slowly but surely, as the little database grew bigger and bigger, the manager would wedge the cost into her operating budget. They're simpler to implement than their enterprise-wide counterparts and business people see them as worthwhile and cost-effective. MORE
For managers and executives, customer service is either a golden opportunity or, as some seem to treat it…a cost center. For managers and executives, customer service is either a golden opportunity or, as some seem to treat it…a cost center. MORE
Cost Center Related Topics Survive Your Promotion
DECEMBER 7, 2009
Certain aspects of IT fall squarely under the category of Risk Management and are generally considered a “cost of doing business”. However the level to which a solution is implemented is weighed against the cost of the risk it is designed to mitigate. Survive Your Promotion!
Strategy Driven
AUGUST 4, 2013
Among the trends are an increased emphasis on project management soft skills, the Project Management Office (PMO) being viewed as a potential profit center (vs. a cost center), sustainability aggressively planned into projects, and an increased emphasis on corporate social responsibility.
Strategy Driven
APRIL 3, 2012
Other organizations are simply cost centers and the budget is a reflection of expenditures only. The primary organizational responsibility of every executive and manager is the diligent management of resources.
Tanveer Naseer
NOVEMBER 10, 2015
They make the workplace more political, needlessly enforcing nerve-wracking centers of power. This is pain avoidance up the ladder at the cost of pain induction everywhere else. Your competitor is getting nothing but a disingenuous cost center.
Chart Your Course
JANUARY 19, 2016
To get the most out of this substantial cost center, employees and employers need to maximize attention and retention at every meeting. Americans have more than one billion meetings per year.
Management Excellence
AUGUST 31, 2011
For managers and executives, customer service is either a golden opportunity or, as some seem to treat it…a cost center. For managers and executives, customer service is either a golden opportunity or, as some seem to treat it…a cost center.
Marshall Goldsmith
AUGUST 15, 2011
Here are her ideas and reflections: Chief Marketing Officers (CMOs) are usually under pressure because most organizations see marketing as a cost center and are not aware of how it is contributing to the bottom line. Q: Do you have any specific suggestions for marketing executives in this challenging climate? A: Great question. During hard times companies often cut back on marketing budgets.
Sales Wolf Blog
SEPTEMBER 27, 2010
My favorite: HR as a cost center. My favorite: HR as a cost center.
Marshall Goldsmith
NOVEMBER 30, 2010
Many businesses view marketing as a cost center without recognizing how it contributes to the bottom line. Many marketers make the mistake of talking about lowering costs instead of talking about increasing revenue. Marketing is everywhere, but with the ubiquity of slogans and ads, it's easy to forget that there's more to marketing than meets the eye. As a result, it is often one of the first budgets to be cut in economic downturns.
Harvard Business Review
MAY 31, 2012
For one, it’s a cost center. Marketers get no respect, writes Ivey Business School professor Niraj Dawar on INSEAD's blog. The CEO wonders how you spend your time, the CFO wonders how you spend the company’s money, the sales folks think you’re too conceptual, too abstract, and not sufficiently focused on the immediate business, and the production and supply chain guys just think you’re full of hot air.".
Harvard Business Review
FEBRUARY 22, 2017
Given that the service department is a cost center in most companies, service leaders have long relied on AHT as a critical lever for keeping staffing levels, and therefore costs, in check. It’s not unusual to walk into a contact center and see “leader boards” and stack rankings publicly celebrating those with the lowest AHT and shaming the slowpokes. Most fear that doing so would cause call length to skyrocket, increasing costs.
Harvard Business Review
DECEMBER 17, 2015
The internet may seem to exist in the ether, but its plumbing includes a vast network of data centers, also known as server farms, which need power to function. In 2010, data centers represented 2% of all electricity use in the United States.
Harvard Business Review
NOVEMBER 30, 2017
Many of the small and midsize manufacturers that did manage to survive kept going by cutting costs, which has led to stagnant wage growth. Some companies that built lengthy global supply chains have wound up with greater complexity and costs than they anticipated—not to mention greater exposure to a whole host of risks, including currency fluctuations, geopolitical disruption, delays, quality issues, and reputational risk. These costs are significantly higher for U.S.
Harvard Business Review
JUNE 4, 2014
It also has a huge impact on cost, productivity, and customer service.
Harvard Business Review
SEPTEMBER 13, 2012
Slowly but surely, as the little database grew bigger and bigger, the manager would wedge the cost into her operating budget. They're simpler to implement than their enterprise-wide counterparts and business people see them as worthwhile and cost-effective.
Harvard Business Review
SEPTEMBER 12, 2014
Who at your company will be put in charge of turning buildings operations from a cost center to a revenue center? Cost Savings. Energy Information Administration, with a combined annual energy cost of over $200 billion. And many companies also face additional energy-related costs from their commercial vehicles, of which there are over 12 million in operation in the U.S. according to IHS, incurring fuel costs in the billions annually.
Harvard Business Review
JANUARY 4, 2018
GFNorte recently established a Central Analytics Business Unit (ABU) with the mandate to convert information into profits at a rate of 10X cost and to lead the adoption of a customer-centric approach within the organization. The results significantly exceeded expectations: In its first year the ABU yielded profits 46X its costs, in the second year 106X (equivalent to $275 million of net income), and during its third year it is on course to produce 200X. David Malan/Getty Images.
Harvard Business Review
OCTOBER 14, 2015
The health care industry is now focusing on value-based care — improving the health of populations while reducing costs. The overwhelming majority of health care costs involve managing patients with chronic conditions such as diabetes, heart disease, and asthma. Insight Center.
Harvard Business Review
DECEMBER 6, 2016
Like marketing, IT is often seen as a cost center rather than revenue generator. While many teams within your organization contribute to your success, one that cannot be overlooked or understated is the relationship with your IT group.
Harvard Business Review
SEPTEMBER 21, 2016
I observed that leaders often treat security as a liability cost — until the company experiences a security breach, after which increased support is a given. Insight Center. Instead, it was forged by individual engineers and managers who recognized the opportunity to collaborate across the organization for improved performance, lower costs, and faster development cycles.
Harvard Business Review
JANUARY 16, 2015
Similarly, the role of the dealmaker is to find a way to drive the “cost” of the deal down to as close to zero as possible — so the decision maker can’t possibly refuse to buy that ticket.
Harvard Business Review
JULY 16, 2014
In too many companies, IT leaders, relegated to their cost centers, are subordinate to other C-level executives. Just recently, InfoWorld magazine pointed out that CIOs have split into two groups: those who are driving value and those who are still trapped inside the data center. Recently I’ve been having a very hard time talking to students, executives, and business leaders about information technology.
Harvard Business Review
SEPTEMBER 12, 2014
Who at your company will be put in charge of turning buildings operations from a cost center to a revenue center? Cost Savings. Energy Information Administration, with a combined annual energy cost of over $200 billion. And many companies also face additional energy-related costs from their commercial vehicles, of which there are over 12 million in operation in the U.S. according to IHS, incurring fuel costs in the billions annually.
Harvard Business Review
FEBRUARY 2, 2016
On the other hand, they are set up as cost centers and service bureaus, mandated to meet the needs of all their constituents as rapidly as possible under the ceiling of their budget. Most companies struggle to differentiate themselves.
Harvard Business Review
JUNE 2, 2011
Talent, purpose, culture and creating meaning is the peopley work mostly viewed by the performance folks as "cost centers," or departments that exist only to manage legal risk. Every day I go to meetings where language suggests people are cogs.
Harvard Business Review
MARCH 5, 2012
Government in its entirety is a cost-center to society, so we desperately need to create not just jobs, but private sector jobs. Europe's young people are bearing the brunt of the fallout from the collapse of the financial system and the struggle to save the Euro. In Britain, where I live, youth unemployment has topped one million. In Greece, the rate is nearly 50% — that's one out of every two young people in the country.
Harvard Business Review
JUNE 26, 2013
Rather than serving as an adjunct to the core business, or merely a cost center, IT is becoming intrinsic to the very products and services that every company offers. "You only gain an edge over rivals by having or doing something that they can''t have or do," wrote Nicholas Carr ten years ago in his controversial HBR article, " IT Doesn''t Matter.".
Harvard Business Review
FEBRUARY 8, 2018
“It’s already changing organizations, by moving IT from a cost center to something with a place at the table in a lot of different meetings,” said Chris Jackson, head of cloud platforms at Pearson, a global learning company. The cost may be lower, but like traditional computers, it is still a cost. Others use cloud computing software in their own data centers, as a means of increasing resources and working faster. yagi studio/Getty Images.
Harvard Business Review
OCTOBER 1, 2013
IT is asked to the table far too late to advise on the difficulties of consolidating systems after a merger , then faulted when the task takes longer and costs more. We propose business and IT work in that direction by bringing a few tough technological trade-offs front and center, with the goal of finding some middle ground. Today, this topic simply doesn’t come up often enough, leading to a one-size-fits-all approach to managing IT, often as a cost center.
Harvard Business Review
FEBRUARY 7, 2018
Usage brands, by contrast, elevate customer service and loyalty from resource-starved cost-centers to key drivers of growth and profitability. Ilka & Franz/Getty Images. What makes a brand successful in the digital age? A joint study by SAP, Siegel+Gale, and Shift Thinking suggests that digital brands don’t just do things differently; they also think differently.
Harvard Business Review
OCTOBER 12, 2011
IT was viewed as noncore, a cost to be outsourced like janitorial services and security. But surveys show that more than 25% of firms still think of IT as a cost center, 53% of CIOs' time is focused on cost control, and 54% of companies outsource their IT services. It's easy to fall into the Kodak trap, especially in austere times when there's almost overwhelming pressure to cut costs.
Harvard Business Review
DECEMBER 25, 2013
If you are running a large company anywhere in the world, you have almost certainly asked yourself some version of this question: “How can we get tens of thousands of employees to deliver memorable customer experiences that enhance our brand, all at a reasonable cost?”. In a customer service center, for example, you would create scripts for every possible interaction. To keep costs under control, you’d set goals for reducing it every year.
Harvard Business Review
NOVEMBER 8, 2017
But replicating the facility- and labor-intensive American model — which is more costly than that of any other nation yet produces subpar results — will set these emerging economies on the same course of endless cost escalation that has plagued the United States. One major reason for the rapid cost inflation in health care is burgeoning hospital construction. Insight Center. Victor Albrow/Getty Images.
Harvard Business Review
FEBRUARY 22, 2012
Typically an in-house cost center, service is usually viewed as a necessary evil and constantly targeted for "efficiency." Over time, notable service firms built outsourcing capacity in India, Malaysia, Singapore and elsewhere to allow any firm to have a global service workforce at low cost. Isn't This Just Another Way To Cut Costs? A Stanford Professor quit his job. But he doesn't plan to go to another prestigious university.
Harvard Business Review
MARCH 13, 2013
Captive offshore operations centers — company-owned delivery units located in low-cost countries such as India and the Philippines — have come a long way. Originally designed to provide labor cost arbitrage, they are now on the brink of being a source for strategic advantage. Since 2008, we've benchmarked the performance of nearly 250 operations centers working on both core operations (e.g., Cutting costs Global business Operations
Harvard Business Review
SEPTEMBER 8, 2017
These efforts have enabled operational efficiencies, cost reductions, and greater agility, preparing companies for the next phase of digital transformation: driving growth. We expect the next few years will continue to see a lot of shuffling around in the C-Suite as companies turn their attention to growth, recognize the insufficiency of incrementalism, and place the customer experience at the center of their transformation. There are some new faces these days in the boardroom.
Harvard Business Review
AUGUST 13, 2013
The standard approach is to apply tough cost control. That generally means that front line, in many cases, are the lowest cost of labor, who are generally working off a well-scripted common recipe of how to provide tech support. Reinventing Corporate IT An HBR Insight Center.
Harvard Business Review
OCTOBER 4, 2012
As founder of the Center for Hispanic Leadership, I can attest to the fact that the U.S. Full disclosure: I teach classes on this topic at the Center for Hispanic Leadership.) Think profit center, not cost center. According to the Center for Talent Innovation , only 5% of mid-level Hispanic managers have sponsors, as Hispanics have not been as effective at earning a seat at the table with senior executives.
Harvard Business Review
FEBRUARY 9, 2011
We call these people Cost Center Consumers, and they come in two flavors. Divas: These are high maintenance consumers who drive costs up after purchase. They tie up your call centers, incur costly returns, and generate other costs that occur below the gross margin line, which is harder to see. calling plans, ancillary devices like headphones or chargers, international calling, home internet, cable) as well as their true cost to serve (e.g.,
Harvard Business Review
DECEMBER 18, 2012
Mega weather took many lives and cost over $120 billion in the U.S. Individual companies are feeling the bite: analysts at Morningstar estimate that input costs at Tyson Foods will rise by $700 million — more than its 2012 net income.
Harvard Business Review
OCTOBER 4, 2012
As founder of the Center for Hispanic Leadership, I can attest to the fact that the U.S. Full disclosure: I teach classes on this topic at the Center for Hispanic Leadership.) Think profit center, not cost center. According to the Center for Talent Innovation , only 5% of mid-level Hispanic managers have sponsors, as Hispanics have not been as effective at earning a seat at the table with senior executives.
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