Editor’s note: Eric Jackson, a technology consultant and developer, is a regular contributor to Local Tech Wire. His column appears on Tuesdays.
BLACK MOUNTAIN,Nicholas Carr’s new book, “Does IT Matter?” (Harvard Business School Press, 2004) is an expansion of a 2003 article in the Harvard Business Review that set off a furor in the information technology world. The actual question he addresses is a little less volatile than the title: Can IT provide firms that use it sustainable strategic differentiation and advantage?
His conclusion, as you might imagine, is that it cannot. According to Carr, the maturing of IT means that its ability to provide a company with a distinctive strategic advantage has eroded — it is too easy for competitors to copy any purely IT-based innovation quite rapidly.
This is not to say that IT is becoming less important. In fact, quite the opposite is true. Carr compares the burgeoning IT infrastructure in the corporate world to two earlier, equally revolutionary infrastructure technologies: railroads and electricity. In both cases, during the early years these technologies provided significant strategic advantage to firms able to quickly take advantage of their potential. As the importance of the new technologies began to hit home, more and more companies incorporated them into their businesses, often appointing high-level executives to focus on the effort — early in the twentieth century, for example, many companies appointed vice presidents of electricity with roles analogous to that of CIO for information technology.
In the long run, though, such infrastructure technologies become standardized and ubiquitous, and eventually invisible as a result. The technology becomes a requirement for entry into the game, but is no longer a source of distinction and competitive advantage. According to Carr, IT is well on its way to becoming just such an infrastructural technology.
A ‘conservative’ approach
The book has two basic parts. The first focuses on analysis of trends in IT use and its contribution to competitive advantage, with the conclusions described briefly above. In the second part, Carr considers the consequences of these trends for purchasers, users and managers of IT.
This prescriptive part of the book is less strong than the analytical, but useful nonetheless. Carr recommends a conservative approach to IT investment that focuses on reducing cost, following others, and minimizing risk. Most importantly, he repeatedly underscores the fact that, when successful, the use of IT as a strategic differentiator is nearly always accompanied by corresponding organizational and process innovations — IT alone has never been a magic bullet.
Agree or disagree, the book raises interesting and important questions that are important for all of us in the IT world to consider. I recommend the book to both producers and users of IT, but I would suggest that the two audiences take two different approaches to reading it.
Gospel or grain of salt
If you are a producer of information technologies, assume the book is gospel. Most of its conclusions are very well grounded, even if they may be overstated in some cases. Carr argues persuasively that the IT industry is maturing and that we need to consider the consequences of that. This is an excellent time to consider how your company might take advantage of the trends now, while the majority resist them. Being among the first to embrace new realities often bestows competitive advantage.
If you are a consumer of IT, take the book with a grain of salt. There is a danger of concluding that investment in IT never gives strategic advantage, which is certainly not true. IT is and will continue to be a critical component and tool of corporate strategy. It may well be a good strategic choice to heed Carr’s advice to follow rather than lead and to “focus more on vulnerabilities than opportunities,” but, then again, it may not. Recognizing the truth in Carr’s words, your company’s best option may well be to take the counter-intuitive path. In any case, it is well worth remembering that innovative information technologies need to support equally innovative processes and cultures.
Ideas? Suggestions? Contact Eric at eric@deepweave.com
Eric Jackson is the founder of DeepWeave. He has built his career pioneering software solutions to particularly large and difficult problems. In 2000, Eric co-founded Ibrix, Inc. He is the inventor of the Ibrix distributed file system, a parallel file storage system able to scale in size and performance to millions of terabytes.
