Fowler and Sharma declined to disclose just how much revenue their software brings in, but they did confirm that these products both add to the company's bottom line and increase GE's competitiveness in the marketplace. "We think about it as driving profitable growth," Sharma 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 the IT department. "Many CIOs don't have the skills or interest," he says.
Chris Curran, chief technologist at PwC 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 opportunistic rather than an ongoing objective.
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, CIO and VP of IT Gerry McCartney is looking at software developed at Purdue that other universities may be interested in buying.
Educational institutions, like many businesses, are looking for new revenue streams, and IT is a logical partner to help in that quest, McCartney explains.
"We produce a lot of intellectual property every year, and we have not historically done a very good job of turning those pieces of intellectual property into revenue," says McCartney, who as inaugural director of Purdue's Innovation and Commercialization Center, is overseeing the push to do just that.
One project is Course Signals, an application developed by the Purdue IT team that monitors student behavior patterns and academic performance determine if students are at risk of earning a low grade. Faculty can be prompted to intervene with suggestions on actions they can take to help students improve their grades.
Developing products such as Signals, which Purdue has licensed for distribution, brings monetary value, McCartney says, but also brings focus to the good work done internally by IT. One good rule of thumb, he says: "If internal people will pay for it, there's a very high likelihood others will, too."
Pratt is a Computerworld contributing writer in Waltham, Mass. You can contact her at marykpratt@verizon.net.