The Last Nick Carr Story Ever - Promise (But it's a corker)

Far too many of Nick "It Doesn't Matter" Carr's critics didn't bother to read past the headline of his Harvard Business Review essay. Now, in his new book, Carr posits an even more depressing scenario. Perhaps it's worth more than a casual squiz and a heap of knee-jerk reactions.

If the IT community thought Nicholas Carr's "IT Doesn't Matter" article damaged their cause, then they should not rest easy just yet. His recent book includes an even more worrisome message, which no one seems to have noticed. When they do, it will be fireworks all around.

In Does IT Matter? Information Technology and the Corrosion of Competitive Advantage (Harvard Business School Press, 2004) Carr makes the provocative statement that IT not only fails to add to competitive advantage, it can actually destroy it. If that is not enough to worry already anxious executives, he suggests a possible scenario where "a very different and altogether less attractive economic dynamic" may play out. "The stock of jobs may begin to decline, unemployment may drift upward, the supply of goods may outstrip demand, prices may drop, and the divide between the wealthy and the poor may grow wider and deeper."

And all this is brought about by the commoditization of IT?

The book is largely an elaboration of the arguments from his contentious article published in the Harvard Business Review in May last year. The shortish essay created a furore, triggering discussions and arguments that are still flowing today. Many of the more vituperative responses were inspired by the piece's uncompromising title, with some commentators making it painfully obvious that they had read no further than those first three words.

When he visited Australia in May for this magazine's CIO Agenda 04 conference, Carr told CIO that the book's less provocative title was his publisher's idea, but he has not resiled from his earlier views. The book's subtitle is his own, and by discussing "information technology and the corrosion of competitive advantage", he believes, as he told us, that "the fundamental argument from the article I still think is correct, and I haven't moved away from that".

The argument itself has been discussed, dissected and in some instances discarded many times: that information technology (both hardware and software) is growing increasingly commoditized and, as such, offers little differentiating and competitive advantage to individual companies, particularly for early adopters who find that the time span between their taking up pioneering technology and their competitors buying the same items more cheaply is diminishing at an increasingly rapid rate.

The initial responses concentrated on whether IT has become commoditized. This centred on the nature and the level of customization and in-house development that goes on today. Most commentators seemed to agree that certainly hardware and much (if not all) software has become packaged, off-the-shelf, commoditized product that anyone can purchase. The argument then moved on to competitive advantage, and the role of innovation in ensuring advantages are produced and maintained. It was often said that it is that top 10 percent of customization that organizations put into commoditized products that makes all the difference, and companies like Wal-Mart, Amazon, Google and other icons of the post-boom days were regularly referenced.

Many critics came to a view that can be paraphrased as: "It ain't what you have but the way that you use it that counts." In other words, it is not the technology as such but the talent, skills and strategy applied to it that creates competitive advantage. This, in effect, seems to support Carr while trying to refute him at the same time.

The book repeats these issues, taking a more detailed and contextual approach than the original article's fairly brutal eight pages.

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