The latest CIO issue is out and it has a nice article about the “proper” amount of capital to spend on IT systems. The article does a very fair job of presenting the research. Instead of looking at a percent of total revenue or a percent of operating expense, the research details we should use a % of net revenue and % of operating expense.

Other highlights:

• There’s a finite amount that should be invested — beyond which are diminishing returns.
• This is about infrastructure — not software (typically viewed as an investment)
• There are examples by industry.

Enjoy!