Seeking examples of corporate departments that have been turned into profit centers. Maybe an in-house advertising, market research, PR or R&D function that was recast as a profit center--either selling internally or externally. (I am not interested in IT examples please). Seeking case studies that document such examples--whether successful or not in attaining profitability.
I don't think it is what you are looking for, but MailChimp.com was created by mistake from a services agency. They were sending emails for their clients and the next thing you know, they were making most of their money from send costs and the rest is history. Sorry I can't be more help.
Pardon my answering a question with a question, but are you looking for specific public examples or individual organizational experiences? As an accounting and management consultants, a few very specific client projects come to mind when considering the answer to this question. I would like to offer examples from two different clients, in two different industries.
Example 1: Oil-field Services Organization Company Store
Background: First case was the development of a company store for a multi-division oil-field services organization. Historically, all of the divisions of this organization purchased tools, gloves and other miscellaneous items from external vendors.
Concept: The concept of the company store was designed to centralize purchasing activities and achieve economy of scale by creating a large purchasing power. The “Company” store not only supplied the divisions with tools, it was also open to the employees and other organizations within the industrial area where it was located. The “Company” store had to have competitive prices and had to win the business of its fellow divisions.
Outcome: In 2003 the store generated an average of $50,000 in sales per month.
Example 2: Heavy Equipment Leasing Company
Background: The second case was engineering company that developed a leaving company for it operating divisions and the general public. The organization sold all of its heavy equipment to a newly-formed, wholly owned subsidiary. The new leasing company then leased the equipment back to the individual divisions and to the general public.
Concept: The objective of this project was to increase the rate of utilization of the company’s assets by converting idle time to billable utilization.
Outcome: The organization was able to generate revenue from external customers by leasing/renting heavy equipment that was not being fully utilized internally.
I am uncertain if these examples will help you with your current project. Should you have any questions, please don’t hesitate to reach out to me at anytime.
All of these *had better be* profit centers--otherwise, why are you running them?
Advertising MUST bring in an ROI. Kill the campaign if not.
Market research should be bringing you very valuable information about what your market wants, and why they'll buy. If not, the department's not doing its job.
Same with R&D. We're not doing applied research here--investigation for the sake of science. We're doing R&D *in a direction*! The direction that makes the product or service better for our customers...in accordance with what they told us they wanted via our market research.
Organizations need to be sales-driven. If they're engineering-driven, or accounting-driven, they'll die.
