IT Investments Deliver Profits, Study Finds

Computerworld: A team of academic researchers have completed a study which found that IT spending can have a bigger impact on profitability than investments in R&D and marketing. However, some types of IT investments were more profitable than others. For example, cost cutting systems did not lead to greater profits because a firm’s competitors were likely to purchase similar systems; however, companies that invested in unique business intelligence systems that helped sell more products did see an increase in profits.

Companies should focus on IT systems that “are highly differentiated from your competition” said Sunil Mithas, the paper’s lead author. “It will be very hard for your competition to replicate that.”