Why IT matters in midsized firms

There is considerable confusion among academics and practitioners over how (or if) information technology (IT) impacts corporate performance. Can a typical company 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. In our study 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. Our results show a high correlation between IT capability and profitable business growth. Firms that build high capability IT systems grow faster than firms that do not, and do so while increasing both revenue and profits.