General News

CIOs and IT Departments: Profit Centre or Profit Center?

Published

11 years ago

September 10, 2015

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In business, an operating unit is either making money or it’s detracting from a company’s profits. In simple terms, it’s the difference between a profit center and a cost center.

IT Departments worldwide face the difficult task of demonstrating the ROI that they provide to their parent companies.

IT Departments provide essential support services to other departments within a company, however; these contributions are often not easily quantified into revenue.

Most IT departments traditionally function as cost centers, a business model in which funds are invested but an obvious return on investment is not easily visible.

There’s an increasing need to transform IT Departments into a revenue contributing business. The impact of IT on business is deep, pervasive, and growing.

We literally can’t separate IT and general business. The better any company exploits technology, the better they are at their jobs, knowing customers, working with partners, capturing markets, growing profits.

IT is being called on to transform business, and to do so IT must transform itself, too.

As the developing markets e.g. Nigeria matures, executives becomes wiser and sees the need to focus more on their core business.

And these we have seen with decreasing IT budgets, or outright outsourcing of all IT function. We can broadly say that enterprise in Africa are at a cross-road and are facing typical business challenges – which are changing the way IT function is organized.

Then Role of CIO is also changing – with the change in the IT requirements and model of IT engagements. IT is getting more and more aligned to business functions – and is seen as a critical enabler for conducting operations.

Traditionally enterprises in the Africa have taken a CAPEX centric approach, – however they now starting to realize the need for and benefits of – OPEX based models.

What this means is that organizations are looking at means to improve ways in which business is conducted.

This may be true for all functions within an organization like Supply Chain, sales and marketing etc.

In the current context of business transformation, including IT departments, CIOs need to innovate in order to stay relevant. Based on survey amongst CIO in the West Africa region, the top priorities for CIOs and IT Managers are getting executive buy-in and support for strategic/innovative IT projects; obtaining budgets for IT investments and managing growing expectations and service needs. I strongly believe CIOs can take advantage of these challenges to re-invent themselves and be seen differently by the business. CIOs need to more from IT productivity to business productivity.

IDC had in different forum highlight the advent of disruptive technology with the 3rd Platform: Cloud, Mobility, Big Data & Analytics and Social technologies had impacted the way IT is consumed. This in itself provides both opportunity and a threat to CIOs and their IT Departments.

An opportunity, if the CIO takes advantage of these to reinvent his IT department by showing value beyond that been seen as a cost center to becoming a profit center.

And the 3rd platform could be a threat if The CIO does nothing other than “keeping lights on” and just maintaining IT systems. Some CIOs can hardly leverage IT to unlock real value and profit, and as a result, most businesses treat IT as a cost center, because that is what it is to them. CIOs need to take advantage of exploits in technology, knowing the business, knowing the business’ customers, working with partners and to growing profits, thereby maintaining their relevance to the organisation.

Already a new class of strategic IT organization is emerging, one that uses the business of the 3rd Platform in cloud, mobile, mixed-sourcing, strategic souring, and e-commerce as core components by delivering business services even better and cheaper than some IT departments.

How Can CIOs transform their IT Departments from a Cost Center to a Profit Center?
The process of transforming a cost center to a profit center is not a simple one, but it’s very achievable.

The first step in transitioning to a profit center is performing a gap analysis. IT leaders should take stock of what they really need to transit, that is, judge what the current position is and decide on the eventual goal of the department.

IT leaders must be certain to ensure that they identify and assess all barriers to transforming the IT department as well as discover what variety of the profit center model is most suitable to the company. Questions that could be asked during the gap analysis are the following:
•    Is there a market or how can I create a market for the IT department to sell identified services to external companies?
•    Do I have resources or partnerships to evolve the transition?
•    Do O I have a sellable transition business plan to the business?

Take a stock of your IT investments in Licenses or infrastructure, there is a service you probably can compartmentalize and extend to provide and sell to small businesses?

CIOs and IT Managers may also consider a “Charge Back” model to internal sister departments within the corporate depending on the size and structure of the parent company.

A charge back method would strive to frame and describe the means in which an IT department’s sister departments can compensate IT for “extra” or “additional” or “add-on” services delivered e.g. Bring Your Own Device (BYOD) implementation for enterprise mobility.

Creating a charge back method requires participation from all of IT’s internal business partners. Developing a compensation or charge back has the potential to be politically explosive within a corporate, but the benefit to IT is that it can help dispel the notion that it is a cost center by enabling IT to prove that it can generate obvious revenue or at lease save significant cost by regulating technology consumption.

By charging internal business partners for IT services, IT would be able to clearly show the benefits their services provide. For bigger corporation where departments are responsible for their own IT budgets, IT departments need to determine competitive differentiation in delivering its services. Competitive differentiation in this context means that IT should realize that they are not guaranteed to win all contracts put up for bid by internal departments.

IT departments must ensure that they are competitive with their outside competition and must display this competitive advantage by completing projects in an efficient and timely manner.

It is important to know that transforming IT departments from cost center to profit center is a new paradigm that is essential because of the way technology usage is changing. While it may not be popular now does not mean it’s not worth considering.

One phenomenon that we already see putting threat on the job and relevance of CIOs and IT Departments is Business Process Outsourcing (BPO). It’s gradually permeating the IT space as well. Locally, we’ve seen where a whole IT department is outsourced.

You may argue that that is on bigger scale and only big companies can possibly do that. The truth is that when Cloud Computing is at its best, and regulations permit, small and mid-size companies may decide access ERP, CRM services from the cloud on a subscription basis and move from CAPEX to OPEX model as far IT is concerned.

Ten years ago, CIOUpdate.com columnist Sourabh Hajela states that “IT cannot work as a profit center because it fails to meet the requirements for a department to function as a profit center because of the following reasons:
•    Revenues and costs: Accurately quantifying revenues and costs.
•    Market: A focus on customer relationships that are generating higher profits and either discontinue or deemphasize those that aren’t.
•    Product Mix: The creation of a portfolio of products and services driven by market demand.
•    Product pricing: Price products and services to maximize profits.
•    Timing: It is often said that, in business, timing is everything. Profit centers are profitable when they can quickly respond to a market opportunity.”

Mr. Hajela general surmises that IT departments cannot work as profit centers because of its close alignment with other business departments. “An ITO cannot work as a profit center because it has a captive relationship with its “customers,”

I am sure this suggestion by Mr. Hajela has been over shadowed by the advent of the disruptive technology in the 3rd Platform and the emergence of new models and options for businesses to consume.

In a short while, there will be an increasing pressure to transform IT Departments into a business, a revenue generating entity. CIOs should be prepared to answer the question, what kind of transformation makes the most sense for my business?

I’ll close this article with a quote from Charles Darwin that “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”

Bola Adisa
Email: [email protected]
Phone: 07061547518

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General News

IHS Nigeria, Ilorin Innovation Hub Showcase 19 High Growth Startups

Published

18 hours ago

April 20, 2026

Chike Onwuegbuchi

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IHS Nigeria, part of the IHS Holding Limited (NYSE: IHS) (“IHS Towers”) group, one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count, has partnered with the Ilorin Innovation Hub to host the maiden edition of its Demo Day at the state-of-the-art facility in Ilorin, Kwara State.

The event, themed “The Convergence,” is designed to spotlight 19 emerging startups that have participated in the Hub’s accelerator and incubation programs, and invite them to pitch their solutions to investors, venture capital funds, corporate partners, and the media.

The Ilorin Innovation Hub, a partnership between the Kwara State Government and IHS Nigeria, began operations in February 2025 with programs managed by Co-creation Hub and Future Africa.

The Demo Day presents an opportunity to take stock and assess how the Ilorin Innovation Hub is helping to nurture and bring to life groundbreaking ideas and solutions supporting economic resilience and addressing real-world societal challenges. The event is expected to help unlock funding opportunities, foster strategic collaborations, and amplify visibility for these startups that are developing solutions across critical sectors including agriculture, health-tech, green energy, lifestyle, and digital services.

Beyond the startup showcase, the Demo Day highlights Kwara State’s continued commitment to driving digital innovation and entrepreneurship, and IHS Nigeria’s commitment to bridging the digital divide and deepening the digital economy in Nigeria.

Mohamad Darwish, CEO, IHS Nigeria, commented, “We believe innovation and digital technology are powerful drivers of economic growth and sustainable development. This is why we partnered with the Kwara State Government on the Ilorin Innovation Hub. It is impressive and very fulfilling to see the diverse portfolio of ideas and solutions showcased today from the hub within a year of the commencement of operations.

This speaks to the depth of creativity among Nigerians and what is possible when they are equipped and supported. Today’s event makes me proud of our investment in the space and underscores IHS Nigeria’s continued commitment to supporting technology, entrepreneurship, and digital innovation in Nigeria.”

Temi Kolawole, Managing Director, Ilorin Innovation Hub, commented, “Today, we showcase 19 startups that have shown that when you combine talent with the right support, the results speak for themselves. The Ilorin Innovation Hub exists to ensure that geography is never a barrier to building something extraordinary, and this Demo Day is proof that we are on the right track.”

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General News

AfriStakes Unveils Platform to Connect SMEs with Investors

Published

3 days ago

April 18, 2026

Chike Onwuegbuchi

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AfriStakes has launched a new capital platform in Nigeria aimed at linking African small- and medium-scale enterprises with a broad range of investors in a move to address persistent funding gaps across the continent.

In a statement, the firm said the platform would improve capital allocation by bridging the disconnect between available funds, investment-ready businesses, and viable opportunities.

The launch comes as many African businesses continue to face funding constraints despite the availability of capital within the financial system.

AfriStakes said structural barriers have limited access to funding, even as capital remains concentrated in traditional instruments such as fixed deposits, equities, and managed funds.

The platform enables businesses and investors to connect directly by creating profiles, listing funding needs, and identifying suitable investment partners.

According to the company, businesses can upload key documents and showcase their funding requirements, while investors can outline their interests and financial capacity.

Founder of AfriStakes, Henry Adebisi, said the initiative was designed to tackle inefficiencies on both sides of the investment market.

“In Africa, businesses suffer from low access to capital while investors suffer from low access to investable opportunities. With AfriStakes, we ensure businesses are properly prepared and positioned for investment, while investors gain the clarity and confidence needed to deploy capital effectively,” Adebisi said.

The company noted that a major challenge for many SMEs is not a lack of value but poor investment readiness, which affects their ability to attract funding.

AfriStakes said it addresses this gap by providing a structured framework that helps businesses present financial information, develop investment narratives, and prepare realistic projections.

The platform also offers support services such as due diligence, deal structuring, and preparation of investor-facing materials.

It added that the platform would facilitate capital inflow from local and international investors, including individuals, angel investors, diaspora investors, entrepreneurs, and institutional players.

Adebisi said the platform would promote efficient capital flow into businesses driving economic growth across Africa.

“Our vision is to build a system where capital flows more efficiently into real businesses that drive economic change. By positioning both businesses and investors for success, we enable stronger investment decisions and more impactful economic outcomes,” he said.

AfriStakes said it supports multiple funding pathways, including debt financing, equity investment, partnerships, and acquisitions.

The company added that the platform would promote transparency, inclusivity, and structured investment processes across the African business landscape, adding that the initiative positions AfriStakes as a key player in addressing the continent’s financing challenges by creating a bridge between capital and opportunity.

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General News

LG MoodUP™ Refrigerator Adds Expression and Innovation to the Kitchen

Published

3 days ago

April 18, 2026

Chike Onwuegbuchi

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The modern kitchen is no longer just a place to cook, rather where families gather, conversations happen, and lifestyles are expressed. Today’s homeowners want appliances that don’t just work efficiently but also reflect their personality and enhance their living experience.

This is exactly where the LG MoodUP™ Refrigerator stands out. Designed to combine innovative technology, customizable design, and smart entertainment, the LG MoodUP Refrigerator transforms the kitchen into a vibrant, expressive, and connected space.

A Refrigerator That Matches Your Mood and Lifestyle

Traditional refrigerators focus solely on storage and cooling. The LG MoodUP Refrigerator takes a bold step further by redefining what a kitchen appliance can be.

At the heart of this innovation are colour‑changing LED door panels that allow users to personalise their refrigerator’s appearance. With just a few taps via a smartphone app, you can effortlessly change the colors of the refrigerator doors to match your mood, décor, or occasion.

Whether you prefer calm neutral tones, vibrant colours for entertaining guests, or subtle lighting for a relaxed evening at home, the LG MoodUP adapts seamlessly.

Customizable LED Panels: Design Meets Technology

One of the most striking features of the LG MoodUP Refrigerator is its customizable LED door panels. These panels offer multiple colour options and lighting combinations, helping you create a kitchen that truly reflects your personality.

Why This Matters for Modern Homes

Enhance kitchen aesthetics without renovations
Allows you to refresh your space instantly
Creates a dynamic, stylish focal point in the kitchen
Ideal for design‑conscious homeowners and young professionals

In Nigerian homes where kitchens are increasingly becoming open, social spaces, this feature adds a unique blend of style and innovation.

Built-In Bluetooth Speaker: Entertainment at the Heart of Your Home

The LG MoodUP Refrigerator goes beyond design by introducing entertainment into the kitchen. With a built‑in Bluetooth speaker, users can connect their smartphones directly to the refrigerator.

This allows you to:

Play music while cooking
Listen to podcasts or radio shows
Enjoy audio while hosting family or friends
Make daily kitchen routines more enjoyable

From meal prep to weekend gatherings, the kitchen becomes a more social and engaging environment.

Smart Technology for Smarter Living

LG is known globally for pioneering smart home solutions, and the MoodUP Refrigerator reflects this commitment. Using LG’s intuitive app interface – LG ThinQ, users can control lighting, sounds, and certain settings directly from their smartphones.

This smart connectivity ensures:

Easy customization
Seamless user control
A modern, connected kitchen experience

For tech‑savvy Nigerian consumers looking to integrate smart appliances into their homes, the LG MoodUP Refrigerator fits perfectly into today’s digital lifestyle.

Designed for Style, Comfort and Everyday Use

Beyond its innovative features, the LG MoodUP Refrigerator remains a high‑performance refrigerator built for daily use. It delivers reliable cooling performance, efficient food preservation, and durable construction expected from LG appliances.

Key lifestyle benefits include:

Elegant, premium design
Reliable cooling efficiency
Smart functionality without complexity
A blend of practicality and visual appeal

This makes it ideal for homes that value both performance and style.

Why LG Continues to Lead in Home Innovation

LG’s approach to product development focuses on understanding how people live today and how technology can improve everyday moments. The MoodUP Refrigerator is a strong example of this philosophy, demonstrating that appliances can be both functional and expressive.

Rather than blending into the background, the LG MoodUP stands out as a lifestyle statement; one that reflects individuality, creativity, and modern living.

For anyone looking to upgrade their kitchen experience and embrace the future of smart living, the LG MoodUP Refrigerator delivers a bold and refreshing approach where your kitchen truly matches your mood.

For more information, kindly visit https://www.lg.com/africa/refrigerators/lg-gr-a24fdmmb

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