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PKF Texas – The Entrepreneur’s Playbook: IT Drives Growth

by | Nov 23, 2007 | PKF Texas - The Entrepreneur's Playbook®

Note: Running most Fridays in FromGregsHead.comis a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur’s Playbook page of the PKF Texas website.

Microsoft believes in a simple equation: the right people + the right tools = business success. But not everyone agrees. Some say that information technology (IT) has become so common that it confers few advantages on businesses that invest in it. Such arguments, however, focus on superficial measures. As a result, they arrive at ambiguous and sometimes contradictory conclusions.

In a new study, the Harvard Business School and Keystone Strategy examine how businesses deploy IT systems in areas that have a strong impact on business performance. They concluded:

  • IT fuels revenue growth. Companies in the top 25 percent of IT capability grow revenue 6.8 percent faster than that of their peers in the bottom 25 percent.
  • IT helps employees be productive. Firms in the top quarter of IT capability enjoy 23 percent more revenue per employee than firms in the bottom quarter.
  • IT makes managers more effective.

Their study also reveals a simple truth: The single IT investment that makes the biggest difference in increasing employee productivity is an optimized combination of information access, security, hardware maintenance, backup/recovery, and messaging systems. In short, if you’re ready to make your business more people-ready, the first place to look for improvement is your core IT infrastructure.

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