A professor in a medical school once told me that a key lesson for his students was to get them to not just perform their diagnoses based on the data they had for a case but to "look at the patient," too. This important message is one that should be applied to many areas in which the foundation for interpreting a situation, arriving at key insights and developing intelligent foresight is based on a combination of quantitative and qualitative information.

For example, such a balanced outlook is essential for assessing the interaction of technology with the global economy, national competitiveness and policy, and company performance. This balance is critical to the use and interpretation of industry technology data and benchmarks.

Although technology spending represents approximately 5 percent of revenue and 7 percent of operating expense across all business sectors worldwide and is as high as 10 percent to 12 percent of net revenue and 16 percent to 18 percent of non-interest expense for the world's most technology-intense financial services institutions, its dynamics -- the interactions of technology investment and the creation of value -- are uncharted. They haven't been calibrated and are misunderstood.

We can learn a lot by looking at both the "numbers" (key measures relating to technology investment patterns and expense) and the "patient" (the performance and strategic plans of the business itself). Such a multidimensional context is essential for companies to consider as they look inward to understand and evolve their technology strategies and look outward to benchmark and compare themselves to peers and attempt to discern applicable best practices from other sectors.

2008 Average IT Spend Per Employee
The importance of this approach is clear against the backdrop of the global "technology economy." At the most macro of analytic levels, the global technology economy is huge. As a reference point of initial calibration, 2008 global technology spending was approximately $4.2 trillion dollars. This is the equivalent of $701 for each person on the planet, or the equivalent of one personal computer (or 3.5 iPhones) per year for every inhabitant of the planet. If the $4.2 trillion dollars of 2008 technology spending was treated as a gross domestic product (GDP), it would rank behind only the United States, Japan and China (in 2008 terms) as the fourth-largest economy of the 186 tracked by the World Bank.

The Financial Services Technology Economy

And the technology economy of the financial services sector is the largest of any of the non-governmental sectors. With perhaps $40 billion of IT spending among just the top 5 largest financial services institutions in the world, this alone would rank above the GDP of 108 nations. In terms of technology "intensity" -- a measure of technology spend in the context of revenue and operating expense simultaneously -- the financial services sector is at the top of the charts: four times that of construction and engineering, three times that of consumer products, twice that of pharmaceuticals, and one and a half times that of media, which is the No. 2 sector in terms of total technology spend.

At this early stage of knowledge in the field, it is highly likely that those companies that can understand the workings of technology economics and take charge of their own internal technology economy microclimates today (and get it right) by mastering the balance of expense and value before such learnings are documented and taught in the standard business school curricula will be in the best position to leverage technology for extreme competitive advantage.

And in no sector is this "taking charge" more critical and evident than in financial services, which is the most technology-intense sector worldwide. This is not only true because of the absolute dollar amount of technology spending; it also is true because of the high stakes associated with effective technology investment. Technology economics in financial services is about more than just the commonly used taxonomy of "Run the Bank" and "Build the Bank" expense and investment -- it is about leveraging technology to grow revenue, protect revenue, reduce cost, avoid cost and manage risk. Perhaps the old RTB-BTB terms should be thrown away because they mask the linkage between technology and the "patient."