IWhy IT does not matter?
Nicholas Carr’s first point is that technology’s potential for impact differentiation in a company declines once it becomes accessible to an affordable to all. These conclusions are drawn from his notion that technology falls under two umbrellas Proprietary and Infrastructural, and there ties to the competitive landscape. Propriety technology a protected technology that, enables long-term strategic advantage. On the other hand there is infrastructural technology offers more value when it is shared. In its beginning phase he believes that yes it does hold some proprietary characteristics, and can be used to gain a competitive advantage. I.e. electrical power stations near waterfalls, it was advantageous but electricity would eventually become a utility used by all. He believes that company’s greatest downfalls are that they believe there propriety technology will last forever, but as soon others see its benefits it will be built out and accessible to all and therefore obsolete.
Carr’s second position point is IT technology is essentially a commodity and falls under the infrastructure umbrella. His hallmark points to support this include, IT is more valuable when shared. The rise of the Internet and local area networking has lead to greater standardization, and functionality. He also believes that technology itself is a perfect commodity; there is no differentiation between one byte of data and the next. Ease of replication of IT functions has eroded propriety advantage. He finally sees rapid price deflation, as continued loss to any competitive edge. The drop has made IT available to all.
It is in this changing landscape that Carr provides new rules by which companies should adopt if they wish to survive. His first suggestion is for companies to identify their vulnerabilities. The deeper integration of IT into all parts of the organization has left it open to more threats. Reassessing operations and preparing for threats should be an essential going forward. Despite its decreasing Carr sees overspending as a major issue needed to be addressed. Company’s need to find cheaper more cost effective solutions, and better partnerships with suppliers. Cutting cost and outfitting employees with only essential operations companies will see better usefulness of their investments. Finally Carr believes that delaying the pace of IT investments will prove beneficial. He believes that organizations made rushed investments and got saddled companies with obsolete technology. He sees the key to success is to hold back and wait for the best practices and costs have solidified. A deeper commitment to cost cutting and risk management will be the best form of competitive advantage in todays changing landscape.
One of points that Carr emphasis is that IT is a commodity, and therefore no longer offer a competitive advantage. We see much contention from some of his industry peers in particular Paul Strassman and executive advisor at NASA. He disagrees with the notion that competitive advantage is not lost by the partial standardization such as desktops or software. Instead Strassman believes that real competitive advantage is the result of effective management and skilled people. Strassman has shown through recent empirical evidence that IT spending and corporate profitability are uncorrelated. Firms with similar IT spending and identical IT technologies have shown large variations in profitability. Hence we must remember that computers at their core are tools. Even the most expensive ones in the wrong hands are more likely to weigh an organization down then create real value. True profitability at its roots is well-organized, smart, motivated people who analyze and process the data provided by computers in a meaningful way. Ultimately a standardized computer application will not be the deciding factor in an organizations success or failure.
On the other side of this equation Chris Langdon from…