Notes
07 November 2016
Content of the notes (2)
Page 1
Discuss the four value centres | PICS
Profit center | FIVE
The profit center focus on delivering IT products and services in an external marketplace.
Next to financial benefits the intangible benefits should also be taken into account in investment decisions.
The profit center should work in value networks and partner with other companies in combining complementary skills and resources to deliver value.
The profit center needs an external, marketing orientation, instead of an internal captive monopoly.
Investment center
The investment center has a future orientation.
It focuses on innovations, for example creating new business capabilities by means of IT. This requires more than IT.
New business capabilities are created with a unique combination of structure, processes, systems and expertise.
Investment centers should focus on more than technology. Next to IT investments complementary investments will be needed to realise a business capability.
That is, IT investments become part of a total package.
Investment center involves resource allocations based on strategic redirection and reliance on IT for business innovations. The real options approach fits with the investment center rather than traditional financial metrics, since the real options approach takes risks and uncertainties into account.
The investment center should be run as a venture capitalist. It requires the forward look of a business innovator.