Leaders in many of the organizations tend to ignore the cost centres. But that is not the case with leaders at Amazon. They always listen to business ideas of cost centres. AWS was a ‘cost centre’ as it was procured mainly for the infrastructure required to run the Amazon.com portal. However, Amazon never saw cost centres as supporting units, as the other companies do; if they did, they wouldn’t have been able to innovate and work towards long-term market goals.  Enterprise IT should be positioned not as a cost centre but as a partner to deliver business value. Your cost centres can be converted into revenue-generating resources by creating a culture to innovate.

Leaders also face a challenge in balancing the existing revenue and at the same time, fostering innovation to capture new markets and areas. The approach which organizations follow is treating innovation creation as a separate unit and revenue-generating business as an independent business unit. However, my point of view is that the innovation team needs to have a more robust, structured alignment with revenue-generating units.

By building internal capability through incremental innovation, Amazon has been successful in business model innovation for creating world-class technology infrastructure capability and monetizing it as a separate business, thus launching a whole new industry in the process.