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Is marketing a good example? I feel like the whole point of marketing is to generate revenue for the business, albeit indirectly. Maintenance on your building

Is marketing a good example? I feel like the whole point of marketing is to generate revenue for the business, albeit indirectly. Maintenance on your building, IT infrastructure, etc. are more of what I think of. The "cost of doing business". Basically, things you need to have for the business to function but spending more on them won't generate you more revenue, sales, etc.

killjoywashere 3y ago
Profit centers directly produce profit. Cost centers may indirectly produce profit but the administration has a fundamentally different view of the assets. To wit: the leadership of a profit center could molest children and the administration would not notice (this is literally the source of countless headlines), while the leadership of a cost center could get staffing slashed if they use too many post-it notes (this is the source of no headlines ever).
wongarsu 3y ago
> the whole point of marketing is to generate revenue for the business, albeit indirectly With varying levels of indirection that's true of nearly all things a company does, though. When IT fixes some sale person's laptop that will have a direct positive impact on that person's sales, and thus on revenue. Spending too little on those IT people would have lost you revenue, conversely spending more might lead to more revenue. In the end it's all a framework any company can apply as they want. You are right that a marketing department is much more likely to be judged by the company's revenue (attributed by department as much as possible), while maintenance or IT support is unlikely to be judged by that criteria. But imho that's mostly because it's really difficult to judge building maintenance by their contribution to revenue, not because it doesn't make sense to do so if you had the data.
RugnirViking 3y ago
> I feel like the whole point of marketing is to generate revenue for the business, albeit indirectly if there is anything that doesnt "indirectly" make money for a company, then it should be cut immediately... The whole cost center vs profit center is a highly political game anyways. Thats why engineering and IT is often thought of as a cost center (because they often care more about the product) wheras marketing, sales etc are usually profit centers because they are able to direct their skills inwards to make a case for their own existance. Its a persuasion game about where resources will be spent to achieve most impact and for different companies the true answer will often be different. You need less marketing (but not none) if your product is premium. You need less product development (but not none) if your plan is to ship as much low quality garbage as possible. In between these the persuasion game is a distributed way of deciding strategy. There is a sort of almost-idea of risk vs quality, where some areas exist soley to prevent future risk to the company (IT meltdown, no roof over head, legal liability etc) where the rest work on the buisness. But under that thought the vast majority of operations are profit

killjoywashere 3y ago

Profit centers directly produce profit. Cost centers may indirectly produce profit but the administration has a fundamentally different view of the assets. To wit: the leadership of a profit center could molest children and the administration would not notice (this is literally the source of countless headlines), while the leadership of a cost center could get staffing slashed if they use too many post-it notes (this is the source of no headlines ever).

wongarsu 3y ago

> the whole point of marketing is to generate revenue for the business, albeit indirectly With varying levels of indirection that's true of nearly all things a company does, though. When IT fixes some sale person's laptop that will have a direct positive impact on that person's sales, and thus on revenue. Spending too little on those IT people would have lost you revenue, conversely spending more might lead to more revenue. In the end it's all a framework any company can apply as they want. You are right that a marketing department is much more likely to be judged by the company's revenue (attributed by department as much as possible), while maintenance or IT support is unlikely to be judged by that criteria. But imho that's mostly because it's really difficult to judge building maintenance by their contribution to revenue, not because it doesn't make sense to do so if you had the data.

RugnirViking 3y ago

> I feel like the whole point of marketing is to generate revenue for the business, albeit indirectly if there is anything that doesnt "indirectly" make money for a company, then it should be cut immediately... The whole cost center vs profit center is a highly political game anyways. Thats why engineering and IT is often thought of as a cost center (because they often care more about the product) wheras marketing, sales etc are usually profit centers because they are able to direct their skills inwards to make a case for their own existance. Its a persuasion game about where resources will be spent to achieve most impact and for different companies the true answer will often be different. You need less marketing (but not none) if your product is premium. You need less product development (but not none) if your plan is to ship as much low quality garbage as possible. In between these the persuasion game is a distributed way of deciding strategy. There is a sort of almost-idea of risk vs quality, where some areas exist soley to prevent future risk to the company (IT meltdown, no roof over head, legal liability etc) where the rest work on the buisness. But under that thought the vast majority of operations are profit