Working for a Cost Center vs. a Profit Center

Being an organizational profit center means the work you do generates revenues for the company. Conversely, being a cost center means you are costing the company money; i.e., you amount to overhead. So obviously it’s better to be thought of as a money maker than a money loser. Companies tend to invest heavily in profit centers, whereas they’re always trying to cut costs in a cost center, especially in an economic downturn.

So what kind of developer jobs will land you in a profit center? Typically, product development in a web or software company is associated with a profit center. To put it another way, if your company’s customers pay money to use what you are creating, or if your work generates revenues in some other way (e.g., advertising), then you are part of a profit center.

On the other hand, if you write systems that are used internally, whether by Accounting, Sales, or anyone else, you are most likely working in a cost center. It would behoove you to transfer to another department or to a new job that is associated with a profit center. Even if your internal customers are singing your praises, it may only take some downturn in business before the company decides to engage in belt tightening and the grim reaper visits your department with pink slips.