There's an old Manufacturer's rule of thumb. A product should be sold at the retail price six times the cost of making the product. This way it covers advertising, accounting, legal, and all other incidentals that eat away at the potential profit that keeps the company alive.

Hmmm, this gives me pause. Let me ask you this basic question.

How much does the project you are on cost the company? Make sure you add in your team's full salary (benefits included), all the tools you use, the equipment you use, and the space you take.

Now, what is the projected yearly revenue generated from that project? If it's more than six times the cost, you are in good shape. If it is less, you need to take a hard look at what you do and how you do it.

Look at this from a Project Focus and an Individual Focus:

On a Project Focus, you need to look at things from the Information Technology perspective and from the business perspective.

Remember, business is in the business of making money. It is not in the business of trying new things for the sake of improving your resume. It is not about analyzing to find the perfect solution long past the market deadline. This is not the "Just Do It" mentality. That mentality often causes defects that are extremely costly. I'm talking about stopping analysis paralysis. Find a cut-off point where the business needs can be met and is flexible enough to move forward. Design can be started before the requirement specifications have been formatted into the tool of choice or a low-level grammar defect is corrected. Use some common sense when you can move to the next phase or implement a project. Nothing is 100% perfect. If so, you probably missed getting market share.

Sometimes business personnel forget that they are in the business of generating revenue for the business. Sometimes they request things that will not pay back through revenue generation or cost cutting. IT can educate them by asking for public revenue estimates (you can quote if asked by higher ups). What I find amazing is that cost--justification is rare. I see development organizations jump through hoops to satisfy the latest whims of the business. Use some common sense by providing an estimated (not inflated) time and cost estimate to the business community. Ask them if it is 1/6th of the revenue the feature will generate.

Now let's look at it from an Individual Basis.

I've heard so many people say that they aren't paid enough to do the work they do. On top of that, IT salaries and consulting has decreased 1/3 to what it was in 2000. Businesses, on the other hand, are looking for additional ways to cut costs. Therefore, the idea of using the latest and greatest technology recommended by techies is scrutinized.

That's reality. Face it. Businesses are in the business of making money. That is how they can pay all the payrolls. Before you stop reading in a huff, let me explain in financial terms.

If your salary is $10,000 a year, you should be contributing $100,000 in revenue to the company. Yes, 1/10 of the revenue generation AT A MINIMUM. The more you do, the better your chance is to build a case to get a higher salary, get a promotion, get chosen for the next big project that you want.

But Pat, I'm a cost center and I'm not on a project that brings in revenue.

Oh really? Here are some ways you can contribute to the bottom line by being pro-active:

      1. Help your business contacts. Talk with your business person about some way you can generate your estimated revenue by helping them.

      2. Find ways to meet the business person's needs without upgrading your PC or buying new software tools. Offer to be another pair of eyes for the business person's next report.

      3. Take on the role of mentor. Save the company money by training a less-experienced employee. Pick an employee that values mentorship (just picking any employee is a time and cost waster).

      4. Take responsibility for your education. Buy your own books to keep current (at least 10 a year). Attend a seminar with your own dollars (at least one a year). Join organizations that will help you grow as a person of character (Toastmasters.org). (oh, see #3 again. Share your knowledge with the people you mentor).

      5. The biggest cost-saving: spend a little more time desk-checking your work! Don't make a business person spend time reviewing and correcting grammar. Don't force QA to unit test your code or initial design. Don't make your manager come searching for you for your status report.

To paraphrase: Ask not what your company can do for you until you've done something for them, tenfold!

Bottom line, if you make money for the company, you will make money. If the business doesn't make money…mainly profit, it goes out of business and can not pay your wages. But if you make money for the business…mainly profit, chances are you will make more money.

If the company doesn't run itself well despite your efforts, you will still make money. You will make money because you will be remembered. All those that have moved on (especially business people) will take your call and help you find a place to land.

Make money for the company first!

SBDi speaks both Business and IT languages. Bring SBDi in to help communication between both organizations. Let us help you find the right flexible solution that will help business increase revenue.

Pat Ferdinandi, Chief Thought Translator