Cut Costs Or Grow Profits: What Should A CIO Do?
Let me ask you: which is the most important thing for the CIO to accomplish – reduce expenses or increase revenues? I believe it’s safe to state that due to the importance of technology in the information, it is necessary to accomplish both simultaneously. However, they shouldn’t each be equally valuable. The one must be more significant in comparison to the others. Which one of them should we spend more time with?
How Investing In IT Boosts The Company’s Bottom Line
The past research hasn’t proved that investing in a company’s IT department was related to how profitable the business was. Recent research is yielding diverse outcomes. What’s happening is that investing in IT could have a direct effect on the company’s bottom line.
Information from more than 400 businesses all over the world was looked over. The findings of the study revealed that investing in the area of information technology could positively impact the profit margins of the business. In some instances, the impact could be more significant than what you would get from advertising expenses for the business!
The researchers dug deeper to discover the kinds of IT projects that have the most significant impact on the bottom line. They found that IT projects were focused on increasing revenue had the most significant impact on the bottom line. This contrasted with initiatives that were focused on reducing expenses.
Why Growth IT Projects Have The Greatest Return
The results are great news for us, who are in the CIO post. This raises the question of what influence an IT project could impact the bottom line. There’s no doubt that certain CIOs are better at their task of making a profit from an IT project in comparison to other CIOs.
The study’s authors say that when a CIO invests in a growth-oriented IT project, they are likely to get positive bottom-line outcomes. The study found the fact that an increased IT expenditure of just $1 per employee could be correlated with an improvement in the sales rate of around $12 per employee.
What all this will mean what this means for CIOs is pretty evident. As we move forward, we should keep these findings in mind. If we’re presented with the chance to make a decision on a venture that can generate revenue or reduce expenses, we should make an investment in the project that will generate revenue growth.
What All Of This Means For You
Being in the CIO job implies that there is always something to complete. It is essential to make choices about the type of tasks you and your IT department are working on, whether cost-saving projects or revenue-generating projects. Both are likely to positively impact the bottom line of your company. Which one is best for you?
Studies have shown that investing in IT can be beneficial to the company’s revenue. The projects your department works on and that focus on increasing revenues will bring the most significant financial impact.
It isn’t a straightforward option: either way of the two. In fact, as CIO, you will be required to make the IT department tackle both revenue and cost-creating projects. If you are faced with the option, it’s evident that doing revenue-generating projects will result in a higher ROI.
