• Forge strong relationships with other departments. An IT team that has a deep understanding of the company's business is much more apt to be able to spot opportunities for external revenue-generating projects. Once they get the green light, technologists will most likely be required to work closely with experts in other departments to identify customer needs and market products.
Sharma's team was able to identify opportunities for products because he had IT workers embedded in business units. "We had a level of industry domain and technical expertise to really make it happen," Sharma says.
• Foster an entrepreneurial culture. Employees -- and their leaders -- must feel comfortable taking risks, Sharma says. "A CIO can drive this by having the right environment by encouraging people to be curious," he says.
At the highest corporate level, GE has established a software center of excellence to support innovation in IT departments across the various GE divisions, says Jim Fowler, CIO for GE Power Generation Services.
The center of excellence will enable GE's various IT teams to share components, such as user interfaces, that could be used in multiple products designed for client use.
"It will help us grow faster," Fowler says.
Purdue University: IP Generates Revenue
Despite such success stories, Constellation analyst Scavo says he doesn't expect revenue generation to become the norm for IT departments. "Many CIOs don't have the skills or interest," he says.
Chris Curran, chief technologist for the PricewaterhouseCoopers advisory practice, agrees. While successful CIOs will continue to collaborate with C-suite colleagues to create value internally, he says, only a small number of CIOs are able to bring products to market. Such ventures tend to be one-time results of opportunistic activities rather than ongoing objectives.
The one exception might be in nonprofits and industries where organizations don't directly compete with one another, Scavo says. In sectors like public transportation, healthcare and government, IT leaders could explore the prospect of turning their internally developed software and systems into money-making products without worrying that they're providing rivals with a competitive advantage.
At Purdue University, Gerry McCartney, CIO and vice president of IT, is looking at selling internally developed software to other universities.
Educational institutions, like many businesses, are seeking new revenue streams, and IT is a logical partner to help in that quest, McCartney explains.
"We produce a lot of intellectual property, and we have not historically done a very good job of turning [that IP] into revenue," says McCartney, who, as inaugural director of Purdue's Innovation and Commercialization Center, is overseeing the push to change that.
One project that's part of that push involves an application called Course Signals. Developed by the Purdue IT team, Course Signals is designed to monitor student behavior and academic performance to identify individuals who may be at risk of earning low grades. IT can prompt faculty members to intervene and suggest actions they could take to help students improve their grades.
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