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Which business technology expenditures will yield a sustainable, differentiable advantage?
Who can blame business technology executives if half a decade of overspending on IT now makes them somewhat obsessed by costs? Indeed, companies in much of the world are capping their IT expenditures. Some companies even peg the performance bonuses of chief information officers to how much money they cut from technology budgets. New technology, deployed intelligently, can help organizations make dramatic leaps in productivity and redefine competition within whole sectors, as Wal-Mart and Dell Computer, among others, have shown. The essence of smart deployment is knowing where and when to invest.
McKinsey & Company talks about how businesses need to shift their think about their IT spending. Concepts such as:
- Establish priorities for investments
- Innovation and diffusion
- Making investments to differentiate your business
Smart IT investing doesn’t require a return to the spendthrift ways of the late 1990s. Companies that understand where to focus and how to time their efforts can find IT investments that will not only differentiate them from competitors but also provide a lasting competitive advantage—and avoid investments that won’t.
Read the entire article on business technology at McKinsey Quarterly.
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