Comment Articles

It doesn't matter whether IT matters

Published: 02 Oct 2003 09:50 BST

The "IT matters" debate continues to burn up brain cycles across the computing industry. Ever since Nicholas Carr published his article entitled "IT Doesn't Matter" in the May 2003 edition of the Harvard Business Review, Carr has been defending his thesis and industry executives have been waging a war of words in opposition to the idea that IT isn't a force multiplier.

It's time to face the facts: IT does matter, but not necessarily in the way you think, and the biggest issue isn't technology -- it's people. Most recently Microsoft chief executive Steve Ballmer and Sun Microsystems chief executive Scott McNealy made their cases that IT matters greatly, and that business success and technology innovation go hand-in-hand.

Ballmer called the notion that technology no longer has the potential to transform lives and make people more productive "hogwash." McNealy believes IT is critical to competitive advantage: "To get an advantage, I need to know more about what happened in the last six hours than my competitor. It won't happen through smoke signals. IT is critical to make that happen."

Carr contends that companies can no longer gain much competitive advantage from IT investments. "Companies have to make the investments to maintain competitive parity, but if you think that you can innovate your way using technology to a competitive advantage that will be lasting, I think you're fooling yourself," Carr said at a recent conference.

After listening to both sides for the last few months, and weighing in with my own analysis, I can only conclude that the two sides are more alike than different in their perspectives.

Rather than focus on the inflammatory "IT doesn't matter" headline, the real question is whether IT is becoming more of a commodity, and the implications of that trend. Of course, IT matters. It's like saying access to water or the sun don't matter to living beings. It's an essential part and cost of doing business in the 21st century.

Does IT matter as a tool for competitive advantage? It depends on how you use it. For Amazon, Wal-Mart, Dell, and almost any other company, the application of technology is a key success factor. Leveraging technology -- such as a superior customer relationship solution, more efficient supply chain management, or a datawarehousing implementation -- can allow a company to outperform competitors. It is only a part of the success formula, but it is an integral part of the ongoing investment to be an industry leader. For example, an inefficient supply chain can destroy companies that live on thin margins and large-scale distribution. Or, achieving a lower cost infrastructure can deliver more profit or fodder for R&D than a less efficient competitor.