t the funds tend to be capital investment instead of design and develop- ment expense. For example, in the media industry, newspapers and magazines require printing plant infrastructure. If they don't own the facility, they must outsource the production process and pay the cost plus a profit to the owner. Broadcasters and production houses require significant investment in plant and equipment, but require very little design and development. Communications network service providers are similar to broadcast and other media industry 13 TECHNOLOGY FORECASTING AND STRATEGIC PLANNING players in the sense that they require very little design and development; however, like the broadcast business, it is very cap- ital-intensive. So if we have now figured out that businesses in the business of manufacturing and providing services focus their efforts on designing and developing products and services, and the result they are looking for is revenue and gross margin, how does that model play in the IT/MIS and communications spheres where there are no revenue and gross margin? The answer in simple terms: investment and cost reduction. The return on investment yardstick measures the amount of money saved (cost reduction) compared to the investment or cost of capital used to acquire fixed assets. The cost reduction realized may be something as simple as an alternative way to accomplish the same operational function, or it may be more strategic and replace several operational functions. Remember, the bottom line is cost reduction. The other acceptable strategy for acquisition of fixed assets is increased production capacity, which increases revenue and gross margin. You may hear the term incremental revenue and gross margin, which refers to the fact that the entire gross margin falls to the bottom line or increases profit before taxes. This is true only if there is no increase in selling, general, and administrative expense. A kind of mixed-case example in recent years is order entry capability added to a website whereby customers