Path to profit, the new fad?

No longer is growth the only priority for a dot-com. More and more, e-business companies are asked to show a profitable bottom line to remain viable in the new economy.
Written by Stan Gibson, Contributor

Fads of e-business come and go like "razor" scooters. You'd think that some people would have a little more perspective than to just hop on the latest cool thing. But for once the latest thing actually sounds sensible. It's called profitability. Or more precisely, P2P, or "path to profitability." And everyone's got to have one. Yes, e-business may not be profitable now, but the notion of P2P holds that they, well, ought to be, some day.

It seems odd that such an ancient verity should appear on the scene as a novel idea. But in fact, a lot of traditional values are swinging back to the fore after being on the outs for several years. The bottom line is if you want to thrive in e-business today, you've got to know how to produce a thriving bottom line.

Does this mean that companies are looking for a different kind of CIO to build an e-business than they were only six months ago?

Yes, says executive recruiter Scott Dunklee, corporate officer for executive search at the Lancer Group, in Menlo Park, Calif. The swing couldn't be more clear-cut—a CIO now must be able to manage for profitability as well as growth. That means being able to justify purchases as well as make them. "The most valuable executives are those who can execute in the market and generate revenue," Dunklee says.

Dot-com CIOs, says Dunklee, are being asked to examine their budgets and reduce costs. They're being asked to find ways around just adding 10 Sun boxes to solve a problem. "CIOs are being asked to be very smart and very business-minded in running their piece of the business," he says. "CIOs are being asked to defend their purchase of a supply chain application, for example. It gets back to good old-fashioned business metrics."

Oh, and he says you can put away the Grecian Formula. It's OK to have some gray hair. It'll add credibility when you're pitching the IT game plan.

Does this mean we all entered a time warp and returned to the '70s? Not necessarily. The ability to grow a company rapidly remains a checklist item.

Still, it does make you stop and think. Twenty years from now, you'll come across that scooter in the attic and wonder why you just had to have one. Will you look back on your current e-business strategy and wonder the same thing?

Growth or profit? Or can you have both? Write me at stan_gibson@ziffdavis.com.

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