Gartner Research

A New Information Technology Business Value Metric Created By Digital Strategies: Gross Profit

Published: 08 June 2017

ID: G00326191

Analyst(s): Ken McGee

Summary

To create new revenue, CIOs are deploying a growing number of digital business and advanced analytics. As a result, information technology is changing from merely being viewed as just a legacy component of operating expenses to becoming a vital new component of gross profit.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • Increasing adoption of information technology solutions that help create revenue is showing senior executives that information technology's business value is much broader in scope than just automating back-office functions to reduce business expenses
    • Recommendation
  • New information technology solutions that help create revenue will present senior executives and investors with the first new, meaningful business-value-of-information-technology metric in years: gross profit.
    • Explanation
    • The Importance of Revenue (Sales) to CEOs
    • Enter Revenue Pursuing/Enabling Technologies
  • Recognizing revenue-creating information technology spending as a direct contributor to gross profit will better enable senior executives to decide when changes in such spending is warranted in the future
    • Recommendation

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