A new management structure is being put in place at the club following the departure of ex-manager Mark Warburton and his staff.
It has been reported that director of scouting and recruitment at Southampton, Ross Wilson, has turned down the chance to become director of football with the Light Blues.
While under-20s boss Graeme Murty is currently in charge of the first team, Rangers are trying to finalise a deal to bring Portuguese coach Pedro Caixinha in as manager as the Gers trail rivals Celtic by 33 points ahead of their Ladbrokes Premiership meeting at Parkhead on Sunday.
McCoist, the former striker and assistant manager who was also Rangers boss between 2011 and 2014, believes “massive investment” is the key.
He said: “I am not against a director of football but it is absolute garbage if anyone thinks that a director of football is going to solve Rangers’ problems right now.
“It is nonsense. I have never heard so much nonsense in all my life.
“Did Jock Stein have a director of football? Alex Ferguson, Walter Smith, Martin O’Neill? No.
“What they needed was a club run very well and financial backing and that is what is required at Rangers.
“The boy at Southampton, Ross Wilson. What is his budget at Southampton? I don’t know but I would bet it is millions. Is he going to come to Rangers and solve the problem with no budget?
“The answer is no.
“Ross Wilson is clearly very good at what he does but my point is he is backed financially to do what he wants to do.
“Rangers need investment, that is exactly what is needed.
“Clearly you don’t want to put the club in any financial trouble again. That goes without saying.
“But for Rangers to improve on the park, massive investment is needed.
“I couldn’t tell you where it is going to come from, I can only tell you what I think is going to solve the problem.
“I know there has been a bit of money spent but I think we need serious investment.”