CIO 100 | Revenue Generation: Money (That's What They Want)
After years of focusing on the bottom line, CIOs are setting their sights on top-line growth.
CIO — Money was very much on the mind of Dr. O’Neal Smitherman as he tested and implemented a bleeding-edge broadband wireless network for Ball State University and the surrounding community in 2004. University president Jo Anne Gora had just challenged administrators and educators to develop new business opportunities that could generate much-needed revenue. The VP for information technology knew his organization was as capable of contributing moneymaking ideas to support the university’s core business—developing and distributing knowledge—as any other academic or administrative department. And the wireless project had real revenue potential.
Smitherman had secured $850,000 in federal funding and an additional $500,000 in donations to test the educational and social value of delivering high-bandwidth wireless technology to local elementary schools, surrounding homes and Ball State itself. "We were learning things that everyone else in need of wireless solutions had been struggling with and would want to know," he says. "We were discovering the answers and realized we could generate revenue by providing them [to others] for a fee."
The Digital Middletown Project, as the wireless initiative was called, won the respect of telecommunications companies who now view the university as an essential resource for developing and testing long-distance wireless technologies. It also earned Ball State a 2006 CIO 100 Award. Its most impressive achievement, however, is the $500,000 to $1 million in annual revenue generated by the Office of Wireless Research and Mapping, the business IT spun off the wireless project. Smitherman expects that revenue stream to grow 10 percent each year. "As state-level support declines and the cost of providing education increases, universities are looking for alternative ways of supporting themselves," he says. "The general perception has been that IT is a cost rather than an opportunity to generate revenue. We’re changing that perception."
Smitherman is not alone. Smart CIOs are reclaiming their roles as revenue enablers (which diminished during the cost-cutting years) either on their own or in response to renewed interest from the top. "IT is playing a more central role in revenue generation," says Jeanne Ross, principal research scientist at Center for Information Systems Research (CISR), who’s studying the IT organization of the future. "It’s partly because there may not be a lot more costs to cut, and the efficiency gains left to be made are marginal."
And during their cost-cutting days, she notes, many CIOs "got sophisticated in their knowledge of IT-enabled business process and have put themselves in a better position to enable new ways of doing things."
