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(from TechRepublic) There are several recurring debates in the IT management community. Most of us have read articles or perhaps engaged in debates over topics like IT “alignment,” the best way to implement an ERP, and that old favorite argument of whether IT should be a profit center or a cost center.

In most organizations, IT ends up taking its place beside logistics, order processing, and other back office functions as a cost center — the fancy accounting term for an entity that generally consumes cash rather than producing it. In these organizations, IT might be “the man behind the curtain,” putting in systems and processes that help the folks over in sales bring in cash or creating efficiencies that conserve cash, but at the end of the day, in this model IT is essentially a corporate expense.

Proponents of the profit center model point to the savings and efficiencies created by IT. This school of thought supposes that if a massive systems implementation is predicted to save $10M over five years and if it is successfully implemented, IT generated a “profit” of $2M in each of those years. (…)

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