Defining 'Profit Center' and 'Cost Center' for Field Service Management

We want your field service organization to make money. (Hopefully you want that too.) Isn’t that one of the goals of most businesses? 

To make money, regardless of your specific customer service ecosystem, you need to become a profit center — as opposed to a cost center. Thankfully for you, we’ve put together an entire eBook on just that topic — the transition from cost center to profit center — which you can download below. 

Before you download it, though, you might want to understand the difference between a ‘cost’ center and a ‘profit’ center. Even though it seems logical on the surface, many business professionals don’t completely understand how the two concepts differ. 

The Houston Chronicle’s small business page has a good breakdown of the ideas: 

  • A cost center is not operated with the intention of earning revenue or making a profit directly. It essentially exists to enable other areas of the company to make money. Standard examples include Human Resources and Customer Service, which is why field service organizations are often considered cost centers to some larger businesses. 

  • A profit center generates revenue while also taking on costs; this makes it possible to calculate the profit of just that department/division as a self-contained unit. In standard business terms, most people think of Sales departments as profit centers. 

The transition from cost center to profit center typically comes from these activities: 

  • Successful monetization of a product or service 

  • Accurate financial reporting around that product or service  

Those are the two basic steps, but a lot more goes into the process. You can learn more in the eBook below, but here’s a sneak peek at one concept: any effort to pursue profits in field service has to come from providing value to your customers. So, the cost center to profit center transition all begins with the value proposition of your field service organization.  

Learn more about defining 'cost center' and 'profit center' for field service management