Overview

A new global study by Keystone Strategy suggests that how well you equip your company with information technology (IT) has become a more important factor to increasing profitability and revenue than how much you spend. Keystone Strategy is a global research organization formed by professors from the Harvard University Business School.

This study found that the role of IT is critical to corporate revenue growth because it can enable companies to scale. In other words, businesses appropriately equipped with IT are more effectively able to manage and accommodate the necessary increases in complexity of processes, organization, and business model that accompany business success.

This ability to scale business processes without serious organizational disruption is not, as some may assume, simply a result of the amount of money a company invests in IT. In fact, it can be easy to spend considerable sums on IT yet realize very few overall benefits.

To find out how information technology actually does impact business performance, the Keystone Strategy study team developed an approach that measures the effect of IT investments on 40 different business scenarios across all major areas of a company, including sales, marketing, finance, operations, product development, supply chain management, human resources management, and technology infrastructure. Taken together, these scenarios provide a comprehensive view of the real impact IT can have on company performance as a whole.

The results dramatically demonstrate that the amount of money invested in IT alone is not the determinant of business success. Rather, companies that focus their technology budget on building high-capability IT systems are able to grow faster than those that do not--while also increasing both profitability and revenue. See this research paper (at right) for more.