In any organization, the role of a department can either be divided into cost centre or profit centre. A cost centre is a department that adds to the cost of the company. A profit centre is a centre that creates profit for the company.

The aim of both the departments is to add something to the bottomline. The profit centre achieves this by generating profits for the company. The cost department tries to reduce costs which effects the bottomline indirectly( A penny saved is a penny earned).<

A cost department in one company may be a profit department in some other company. For example, Human Resource in a manufacturing organization may be a cost department. The company does not gain any profit from the department (directly). However, in companies like http://www.naukri.com/ the recruitment department may be a direct profit generating unit for the company. Therefore, the department that directly relates to the core competence of the company is usually a profit department and all others department become cost departments.

How does all this discussion relates to a technical guy like me. Well, I'm working for a shipping company and handling the IT department for this company. Like all other non-IT companies, the role of IT in my company is that of an enabler, to enable our company to achieve what it cannot achieve without the use of IT.

The role of IT heads in non-IT companies should be to reduce the cost of implementation to the lowest level. Try to foresee all the available alternatives and then achieve one that satisifes all your requirements and will require the least investment. This can be the most important performanc measure for IT heads in non-IT companies. We must use technologies that help in reducing the overall expenditure without compromising on requirements and quality.

Open source technologies offer a very attractive approach to cost reduction. With plenty of trained manpower available in Linux, these can be deployed to manage your various applications in order to nullify the licensing costs and the hardware cost too. These applications are able to make a more judicious use of hardware and therefore the overall hardware requirements for running an applications reduces which brings down the total cost of implementation. You can also achieve project requirements which cannot be achieved in proprietary technologies or can be achieved at a very high cost.

Some other means to reduce cost spending could be bottle neck optimization and sub-optimization of non bottlenecks. Try to utilize your bottlenecks to the maximum capacity, after all the overall efficiency would be determined by your bottleneck. You may even try to shift the bottleneck in the overall process. Also, try to exploit your most costiliest resource to the maximum. For example, if you have a webserver running on a high end solaris server (because it came in just now) and your two year old database server is running on an old model intel server, it is better to swap them. This would help you to exploit the most expensive resource to the maximum, which in this case is the sun solaris server. If the bandwidth is a bottleneck in your organization, try to optimize the use of this bottleneck. For example, you can introduce caching servers like squid, introduce name caching in the server which would help you in utilizing your bandwidth in a much better way.

The bottomline is, if you are working for a cost centric division, try to reduce costs, if you are working for a profit centric division, try to increase profits, the bottom line in both case would be an increase in revenue generation for the company which would have a positive effect on your performance evaluation.