AlixPartners’ collaborative research with the MIT Center for Information Systems Research reveals that although the IT spending-to-revenue ratio metric can be useful, obsessing about it can distract businesses from more important goals. Digital transformation calls for a more strategic approach to IT spending decisions.
At a glance
- Digitally transformed companies have higher IT spending-to-revenue ratios—and they’re more profitable than their industry peers.
- On the flip side, many companies that don’t use digital to transform their operations have to spend heavily to keep legacy systems running.
- Businesses should make the infrastructure investments necessary to develop reliable and scalable platforms that support automation and reuse.