Analyzing the Cost-Effectiveness of Corporate IT Investments

Antoine Chaya earned a PhD in information technology (IT) management from the Georgia Institute of Technology (GT). During his studies, Antoine Chaya collaborated with GT professor Sabyasachi Mitra to publish a paper on analyzing the cost-effectiveness of corporate IT investments in 1996. Their study assessed the IT budgets of more than 400 large and medium-sized businesses in the United States.

The study showed that since the 1970s corporate IT investments had increased dramatically. However, it was difficult to quantify the benefits derived from these IT investments. In fact, some research showed a drop in productivity for information workers as companies ramped up their IT investments. Nonetheless, the 1996 GT study found that higher IT investments correlated to lower average production costs as well as total costs. In addition, the GT study determined that large companies typically spend more on IT as a percentage of revenues when compared to smaller firms.

IT continues to be a major area of investment for businesses of all sizes today. A recent survey of IT executives found that more than 40 percent of those surveyed expected their budgets to grow in 2015.

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