IT doesn’t Matter – a critical review
The unprecedented development of Information Technology (IT), now more aptly referred to as Information and Communication Technology (ICT) to emphasize the critical and crucial role of communication technology, has ushered in a revolution in the way people work, live and communicate with each other. ICT has pervaded all walks of life and all spheres of work, but it has perhaps been the way business is conducted and managed that has been transformed as never before. However Carr (2003) presents very strong and compelling arguments to convince his readers that IT, though indispensable for business, nevertheless do not any longer provide any strategic advantage or competitive advantage to businesses. And because IT do not do so any more, businesses should be cautious and stringent with its IT investments and applications, be a follower instead of trying to be a forerunner in IT applications and concentrate more on managing the risks posed by IT rather than try to hold up IT as the solution for all business problems and waste money and precious resources on over-jealous approaches to IT implementation. Carr (2003) cites may reasons, logic and analogies for his arguments which have to be analyzed individually before it can be decided whether his arguments are based on sound and practical premises or not.
Starting off the wrong way
Starting at the very beginning, the title of Carr’s writerup stands out as a glaring misnomer. Carr (2003) does not at any point in his discourse want to state that IT does not matter for businesses. In fact he asserts repetitively that IT is indispensable for businesses. He states at the very introduction of the write-up, “Today no one would dispute that information technology is the backbone of commerce.” (Carr, 2003, p: 42 – 49) In the conclusion too, he asserts that IT as a resource is essential to competition but is inconsequential to strategy. The title of the write-up could therefore be very misleading and convey an entirely wrong impression that IT is actually not required or does not matter for businesses.
Analogies that do not hold good
The foundation of Carr’s logic rests on the argument that IT has lost its strategic value because IT has become ubiquitous and easily available and acquirable and is therefore no more a scarce resource that affords strategic value to whoever manages to get hold of the technology. Carr is actually turning the strong points of IT on their heads to present a lopsided and flawed analysis. The weakness of his logic lies in its analogical approach. Carr does not forward any research-based data to support his reasoning. “But any proof that rests entirely on analogies is flawed. This technique was used to uphold medieval dogma, and it delayed the advancement of science by centuries.” (Harvard Business Review, 2003, p: 16)
Even the analogies that Carr provide are not wholly compatible or convincing enough. Comparing IT with preceding path breaking technologies such as the railways, generation of electricity and telephony holds good only to the fact that both IT and these technologies played very crucial roles in taking technological development from one plane of achievement to the next higher level. But that is where the analogy ends. The extent, scope, impact and pervasiveness of IT far outweigh the other technologies. Even though the generation of electricity and advent of telephony did affect the lives of a majority of people, they did not revolutionize the way people live, work and conduct business as IT did and is still doing. IT is a culture that can change and evolve; the railway, telephones and electricity are not. Because for one, unlike IT, they deal exclusively with capital intensive goods and exhibit diminishing returns as markets saturate. IT goods are not subjected to such changes. The cost of IT goods in fact diminishes with scale dropping asymptotically towards zero (Harvard Business Review, 2003, p: 7).
Not the Technology alone
IT cannot afford to be a scarce resource simply by the dint of the fact that it is an essential and indispensable resource. Its indispensability makes it ubiquitous. Carr fails dismally on one point – he is unable to distinguish the technology from the people who drive the technology. IT is not hardware and software alone. IT is also the people who develop the technology, and deploy, apply and implement it. Carr’s writer-up basically centers on management issues, yet it fails to give credit to or lay importance on IT managers who would make or mar any IT initiative in any business house. “IT matters not because of hardware or soft ware, but because intelligent and innovative application of information solves business problems and creates customer value at high speed, low cost and the right scale”. (Harvard Business Review, 2003, p: 7)
IT is a tool that is put in the hands of managers to derive the maximum benefit in all spheres of business and commerce. The range, scope and potential of IT is infinite, and in most cases the knowledge, experience and creativity of the IT manager is the crucial factor that decides the extent of innovation that is achieved to lend strategic value to the use or application of IT. As a technology alone, IT can be passive. It is the human element that makes the difference. Commoditization of IT products and applications and the resultant loss competitive distinction is also an approach that is viewed from the technology perspective alone. Homogeneity in hardware products and software applications does not imply homogeneity in how the technology is applied or implemented. Even within the standardizations and incorporated best practices there will be scope for making enough right choices that go with the overall strategic objectives of any business organization to turn IT applications into competitive advantages over rival companies. In fact, standardizations, cross platform adaptability and interoperability provide a greater playing field for the innovative IT manager to derive the maximum benefit out of any IT initiative. By the same logic, IT does not have to be proprietary to be of strategic value; in the right hands, as an infrastructural resource too, IT has adequate intrinsic flexibility and potential to be molded into a resource of high strategic value and competitive advantage.
The Internet: A boon or a bane
Carr (2003) turns the biggest boon of the Twenty-first century into a bane. Carr views IT as a transport mechanism because of its emphasis on communications. According to him the Internet and all its associated networks is the perfect delivery channel for generic applications. ”Most of the major business technology vendors are positioning themselves as IT utilities – companies that will control the provision of a diverse range of business applications over what is now called the grid or the Internet.” (Carr, 2003, p: 42 – 49)
Carr sees the Internet as the great leveler. On the contrary it is the Internet that could weave different business entities such as suppliers, manufacturers, customers and salespeople together into a single vibrant dynamic whole. “IT’s future advances will increase opportunities for linking business strategy, processes and execution”.(Render & Davis, 2003, p: 71) For the business organization which can build up the right business network incorporating all the players in the business chain, only the sky would be the limit. What would however be essentially required are very sound knowledge of both business and technology so that it is possible to utilize technology for the sake of business and vise versa.
Again, even in the case of networking, it is not the technology but rather the content that matters most. The network does not transfer bits, bytes and packets but information, knowledge and intelligence. Knowledge is a high-value form of information that is ready for application to decisions and actions within organizations (Davenport, 1998). Knowledge is therefore a type of value-added information. It is largely thanks to the LANs and the WANs that data can be transformed to information and information to knowledge. A business is able to build up communities of practice and tap into pools of experience to create the repertoire of organizational knowledge that can be stored, disseminated and further refined and developed through the use of IT. It is innovations such as knowledge management initiatives that will provide the much need strategic value to IT implementation in any business house.
A goods wagon carrying perishable commodities such groceries certainly differs in content, technology and characteristic form the Internet carrying business intelligence to where and when it is required most.
End of the Beginning?
For Carr the digital future has arrived: the processing power of IT has outstripped the business needs it fulfills, the cost of essential IT functionality has dropped and is affordable by all, Internet capacity has caught up with the demand, IT vendors are positioning themselves as commodity suppliers or as utilities, the IT investment bubble has burst. Given the rate at which IT has developed and evolved as a technology, it would be a fallacy to state that the IT buildout has come to an end. As IT takes on new avenues of development such as Brain Informatics, Intelligence Science and embedded and nano technologies; entirely new dimensions open up for exploration and application. Is it the beginning of the end or only the beginning of the end for IT? Trying to answer that would at best be hazarding a guess. Leaders will have to show the way, and decision makers will have to invest to get the desired results. “… the Law of Unintended Consequences suggests that if everyone followed then only the vendors would lead.” (Wybolt, 2003). Caution is advisable. Carr’s advise however seems to be a knee-jerk reaction to the over enthusiasm that was evident in the initial stages of the IT revolution when people, much like Carr, had mistakenly believed that putting the technology in place would be the solution to every business woes.
Just as Carr has missed the vital ‘C’ for Communications in ICT, he has also tended to overlook the deciding human factor in technology.
1. Carr, Nicholas, G., 2003, IT Doesn’t Matter, Harvard Business Review, EBSCO Publishing.
2. Davenport, T., H., et al, 1998, Successful knowledge management projects, Sloane Management Review. In P., C., Barnes, 2001, A Primer on Knowledge Management, .Online. November 18, 2008 http://www.accaglobal.com/students/publications/student_accountant/archive/2001/18/57627
3. Harvard Business Review, 2003, Does it Matter?An HBR Debate, Letters to the Editor, An Web Exclusive
4. Render, Robyn, R., Davies, Jeff, R., 2004, IT Doesn’t Matter – Business Processes Do, Educase Quarterly.
5. Wybolt, Nicholas, 2003, Some thoughts on IT doesn’t matter, http://