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IT Doesn’t Matter?

There is an article in the May, 2003 issue of Harvard Business Review with the disturbing title “IT Doesn’t Matter.” Yet despite its inflammatory title, the article is highly supportive of today’s information technology, comparing it to the likes of electricity, transportation and telecommunication in its importance to business, and declaring it “the backbone of commerce.” The essence of the article is that IT has reached a point where, in the author’s opinion, all companies are so equally matched in their IT capabilities that no one company is able to derive any strategic advantage from IT for very long. Any leader into new territory is quickly matched by its competitors within a matter of months. Furthermore, the leader is negatively rewarded for its original thinking by having to pay the price for innovation, while its competitors enjoy the lower price associated with duplicating the leader’s idea.

According to the author, Nicholas G. Carr, there are thus no significant new opportunities for strategic advantage in IT, and therefore “IT doesn’t matter” as a strategic business weapon. Instead of using information technology for strategic initiatives, Carr recommends that companies focus on cleaning up their act in IT to provide for higher stability and efficiency within their own IT operations, concentrating especially on the areas of IT security and the prevention of system outages.

While there are aspects of the author’s argument with which I agree, I can’t help but think of IBM’s Tom Watson and his famous observation in 1943 that “I think there is a world market for maybe five computers,” or DEC’s Ken Olson and his famous comment from 1977, “There is no reason anyone would want a computer in their home”1. These men were proved short-sighted by subsequent events, and so could Mr. Carr.

Yet what concerns me more is the article’s implicit reinforcement of a theme that is becoming all too common among big business in today’s economy. In spite of his blind spot to personal computers, Ken Olson was well-respected in the technology industry during the glory days of DEC, and he was known within DEC for his strategic advice to “Do the right thing” no matter what the situation. I’m afraid big business has now rearranged those words to say “Just avoid doing the wrong thing.”

Where is that spirit of innovation that has propelled our technological development into the twenty-first century? Have CIO’s become a group of caretakers for the technical infrastructure? Some have, I’m sure. Yet I firmly believe that there are still those of us who want to use technology in new strategic ways2 to radically change the way that business works, and to fundamentally improve the perception of business by its customers, thus increasing revenue and profit. To us, and to the companies to which we dedicate our efforts, IT truly does matter. The technology itself may not be strategic, but the way in which IT is used is very strategic.

Where do you stand on this issue? Sure, you’re trying to make your infrastructure so reliable that it becomes virtually invisible. But are you doing anything more? Does IT matter in your company?

Notes:

1. The statements from Watson and Olson seem ridiculous today, but their words were heavily influenced by the thinking of their peers, and their thinking was constrained by self-imposed unconscious limitations on their strategic vision. They were proved wrong by subsequent events, but only because other men and women changed the rules of the game. I believe that continually changing the rules of the game is the most important aspect of technological progress, and one of the key ways in which IT can be strategic. Use IT to change the rules!

2. Notice that I said “use technology in new strategic ways” instead of “use new technology.” I think there is more opportunity for profitable innovation in new uses of existing technology than there is in the typically unprofitable use of new “bleeding edge” technology.

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