Nicholas Carr's recent article in the Harvard Business Review continues to stir up a hornets' nest of debate.
Over the last couple of months it has been almost impossible to visit an InTEP member without being handed a copy of the May Harvard Business Review article titled 'IT Doesn't Matter'. More than one member has told me that their CFO has taken great delight in forwarding them a personal copy. Since the upcoming InTEP session is on 'Managing Key Suppliers' I elected to preview the article and the counter arguments as part of the IDC Perspective section of the meeting. After all, I reasoned, if IT is no longer important then neither are the vendors who supply it to the business.
In the article the author, Nicholas Carr, reasons that IT has matured to an extent where its opportunities to provide strategic advantages have diminished. He draws some powerful analogies with former great industries of the past. As a keen student of history I felt his point was very pertinent. Since the agricultural revolution transformed Western society from a predominantly rural structure to an urban one there have been a succession of industries that have galvanised the business world. First it was textiles. Then railways emerged. These were succeeded by the car industry. Finally, IT became the business golden child in the latter years of the last century. Interestingly, in each of these waves the dominant industry has about a 75-year time in the sun before it is superseded by something else. By this reckoning Carr is right. IT's time is nearly up.
The original article argues that because IT has become standardised it has become more easily replicable. It contends that an investment in IT is increasingly one of infrastructure, where the goal is to acquire the goods at the cheapest price and lowest risk. It believes that even when IT might offer an advantage this will be transient. Nevertheless, despite the title the author does not believe IT is unimportant. Instead he sees it as a commodity and he advocates that it should be managed as such. He believes the goal for business executives with IT should be to spend less, to be a follower in its deployment and to minimise risk in IT investments.
The counter arguments stress that while IT might be ubiquitous, insight is required to harness its potential. The antagonists point out that the strategic effects of IT are typically indirect. The potential of IT fosters a new way of working. If it is only viewed as a commodity then this will discourage businesses from thinking outside the nine dots when applying technology. However, the intensity of response to Carr's original article centred on the title. At a time when IT is on the back foot, the concern was that it perpetuates a misguided view that IT is unimportant and this might then become a self-fulfilling prophecy.
One of the replies to Carr laid much of the blame on IT's current problems with its vendors. The writer argued that suppliers tend to promote technology as a panacea, which leads business to think that products solve their problems instead of merely providing the toolset to address them. Furthermore, vendors have tended to focus their efforts on supplying a product rather than the really tough task of innovating business practices to harness the potential of these products.
In many ways this highlights perhaps the biggest challenge facing the industry. Its suppliers have economic models based around selling products. This breeds an organisational structure, and revenue stream, around manufacturing, installation, maintenance and forecasting. If IT suppliers are really going to help business use technology to foster innovation then they require a new train of thought in their marketing. The focus becomes the output from technology, not merely its inherent bits and bytes.
While such a cultural change might be hard, the alternative is for IT vendors to cope with the perception that IT doesn't matter, at least in terms of its potential for strategic differentiation.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.