Most businesses accept that they have “customers”, people who pay for the products and/or services that the business provides. However, the customer many businesses fail to recognize is the “internal” customer – the consumer of services delivered internally to the organization. These customers, most frequently recognized as co-workers and team members, depend upon the services delivered to them in order to do their jobs for the company. This dependency represents the value of the service, and every organization has a need to get as much value as possible for the cost they expend for these services. When the business approaches these internally delivered services as profit centers rather than pure cost centers, the impact to the business could be highly beneficial as the application of resources gets focused on building strategic benefit for the company and not simply on supporting status quo.
Calling a part of the business a profit center doesn’t mean it’s going to sell services externally for money. Rather, it means that the activities of the department can have a direct and meaningful impact to business profitability, and are participants in the development and facilitation of business strategy. Profit centers can come in many flavors in a business, and may be identified as managers and owners reflect on areas of the business where changing conditions may introduce business risk. Risk often translates to opportunity at some level.