Archive for July, 2008

Yes, Mr. Carr, IT Does Matter – It Matters A Lot

By Eleanor Haas

Does IT matter? In his provocative book of that title, Nicholas Carr argues that the strategic importance of information technology is diminishing, not growing, because it has become what he describes as “a commodity input that is necessary for competitiveness but insufficient for advantage.”
He goes on to define what he means by IT: an infrastructure, a common resource – and then proceeds to demonstrate how competitors readily and rapidly copy infrastructure innovations as the infrastructure matures.

In all fairness, Mr. Carr’s challenge was timely. Vast sums were being invested in the early years of this century in IT infrastructure by enterprises on the basis of potentially false assumptions. At the same, time, the challenge seems in retrospect to have been remarkably shortsighted. IT infrastructure per se is not the issue today. Nor was it as late as 2004 when the book was published.

As I reflect on the value and role of IT, commoditized IT infrastructure seems to me to have been an essential first step to what matters today:  (1) The Internet, a network of networks that has become fundamental to all aspects of business and communications. (2) Software applications that have changed and continue to change the way people in industrialized nations work and opened new learning channels for people in both industrialized and developing nations. (3) Out of these has come social computing, which is changing the way increasing numbers of people communicate with each other and relate to one another with profound implications for our society. Software applications and social computing, in turn, are being effectively used to create new kinds of competitive advantage by small businesses and enterprises alike, to say nothing of political candidates and nonprofit organizations.

Forget sustainable competitive advantage – Michael Porter’s dream of continuing cost or differentiation advantages. That died years ago. Today continuous improvement, continuous innovation and relationships are the only viable basis for advantage. Ubiquitous IT accelerated the pace of change. But it also facilitates continuous improvement and innovation, which can provide such competitive advantages as are possible in this environment.

So, yes, Mr. Carr, IT matters a lot. It could not matter more. Commoditized infrastructure was merely the tip of the iceberg.