Take a look at this draft paper on the Harvard Business School site called Why IT Matters in Midsized Firms. It explains why increased IT spending doesn’t always lead to increased profitability. It’s not the technology, the authors say; it’s a company’s ability to integrate scalable technology into its core business functions.
From the intro:
The crucial question has still remained open -- can a typical company truly benefit from a focus on information technology to differentiate itself from competitors and achieve important business objectives?
Our research has found this is indeed the case, but that the answer is not found in a simple measure of the dollars invested in IT. The amount a company spends on IT is a poor indicator of IT functionality and business impact. It is easy to spend a considerable amount of money on technology with very little improvement in the functional capability of the business. In our study, however, we wanted to focus on what IT actually does for a business. To accomplish this, we developed an approach that measures the business capabilities IT can enable. This approach details forty different business scenarios that accurately measure how IT impacts all major areas of the firm: Sales & Marketing; Finance; Operations; Employee Productivity, and IT Infrastructure. Put together, these scenarios provide a comprehensive view of the real impact of IT on firm performance. …
In short, our research indicates firms that have closely aligned the design of business processes and IT systems find it easier to manage the intrinsic complexity of their businesses. This enables them to grow their revenues and their profits faster than competitors.
The paper is not too long (20 pages) and has two case studies at the end. Take a few bites. Chew on it. It could change the way you think about ROI.
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