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In a modern company, every department is a cost center and only the CFO reports profit. This structure is part of Apple’s success, for example. The idea of “co

In a modern company, every department is a cost center and only the CFO reports profit. This structure is part of Apple’s success, for example. The idea of “cost center” vs “profit center” is an outdated holdover from a Jack-Welch-style conglomerate approach to management where departments are pitted against each other. As the other commenter implies, it’s a great way to starve R&D. It’s also a great way to create silo’d, fractured operations. In contrast, a unified approach to managing the business encourages collaboration and complementary decision making. It also reduces the opportunity for internal politics to distort decisions. Specifically it takes sales out of the driver’s seat, a place they previously accidentally found themselves by virtue of being “the profit center.” I agree that every employee should be able to articulate how their work creates value. But that’s not the same thing as getting out of a “cost center.”

alephnerd 1y ago
> it’s a great way to starve R&D R&D can show proof of direct customer value, or a path to generating customer value. Managing compute infra for a pharma company or an accounting department calculating deferred revenue for a tech company does not, hence why software spend is low in pharma companies and accounting related roles tend to be contracted out in tech companies. > The idea of “cost center” vs “profit center” is an outdated holdover from a Jack-Welch-style conglomerate approach to management where departments are pitted against each other Every company has a finite amount of budget, and every function is arguably as important as the other. You need to prioritize. Every dollar spent by a pharma company on compute is arguably a dollar that could be directly attached to IP generation. Similarly, every dollar spent on an accounting team in a tech company is a dollar lost thet could be attached to software R&D. > a unified approach to managing the business encourages collaboration and complementary decision making I absolutely agree, but people on HN need to realize that depending on the industry, software is lower on the hierarchy of needs. And this is why it's best as a SWE to target tech-first companies or move geos to work in a tech cluster.

alephnerd 1y ago

> it’s a great way to starve R&D R&D can show proof of direct customer value, or a path to generating customer value. Managing compute infra for a pharma company or an accounting department calculating deferred revenue for a tech company does not, hence why software spend is low in pharma companies and accounting related roles tend to be contracted out in tech companies. > The idea of “cost center” vs “profit center” is an outdated holdover from a Jack-Welch-style conglomerate approach to management where departments are pitted against each other Every company has a finite amount of budget, and every function is arguably as important as the other. You need to prioritize. Every dollar spent by a pharma company on compute is arguably a dollar that could be directly attached to IP generation. Similarly, every dollar spent on an accounting team in a tech company is a dollar lost thet could be attached to software R&D. > a unified approach to managing the business encourages collaboration and complementary decision making I absolutely agree, but people on HN need to realize that depending on the industry, software is lower on the hierarchy of needs. And this is why it's best as a SWE to target tech-first companies or move geos to work in a tech cluster.