Note on What Does It Mean to Be a Cost Center? via Irrational Exuberance

A cost center is a function that is operated by optimizing its existing components.

This definition gets at the root of why I think explaining engineering’s contribution through optimization metrics is a flawed endeavor. When engineering departments ask their CEOs and Boards to evaluate them through the context of optimization metrics (“cycle time decreased by 20% QoQ!”), they are training those bodies to evaluate them as a cost center.

FROM:

Irrational Exuberance

What Does It Mean to Be a Cost Center?

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