Nicholas Carr’s argument builds on some grains of truth, but it is incomplete and reaches erroneous conclusions. Throughout its history, aspects of IT have always slid towards commoditization. Today, for example, when you buy the same standardized computer hardware and software packages as your competitors and then, as you must, modify your company to the “best practices” defined by those vendors, you should not expect any competitive differentiation. You are buying a commodity. As such, you should wait as long as you can before you buy, minimize the cost, and focus on implementation risks. Program management is key; there is massive downside if you get the implementation wrong and little upside for getting it right. You would laugh your building manager out of your office if he tried to justify a new plumbing or electrical system on the basis of its strategic differentiation; you should do the same if your CIO makes that kind of argument for your next general ledger or ERP system. In some situations, information technology is a potential money pit and you need to act cautiously.
The weakness of the argument is that it doesn’t consider that, even as some IT becomes commoditized, newer technologies enter into the strategic picture. Strangely enough, it is not that author doesn’t recognize new uses of technology. Instead, he just sweeps them aside. Consider, for example, important qualifications buried in the book’s preface: “I am talking about the technologies used for managing information inside and between companies in what has come to be called the developing world. I am not talking about the use of IT in the home or its incorporation into consumer products ... And I am not talking about its use in emerging markets.” And, perhaps in his farthest reaching equivocation, the author writes that his “meaning of IT does not encompass the information that flows through the technology.”
Hello? Defining terms to exclude some of the most interesting, and most strategic, developments in information technology? That is a tricky device that makes for good rhetoric but not valuable discussion. IT doesn’t matter, as long as you ignore the trend towards IT-infused products, such as phones, games, iPods, cars, health-care, and insurance. IT doesn’t matter, as long as you ignore the growing sophistication in emerging markets like India and China that is driving strategic trends like outsourcing and integrated supply chain management. And, IT doesn’t matter, as long as you ignore the information that IT enables, much of which would not exist, much less be used to enable business strategies or facilitate operations, without the underlying IT.
While convenient, the qualifications create a false dichotomy. The technology that doesn’t matter anymore is built from the same basic components and knowledge as that which the author himself acknowledges as “ripe for innovation.” While different in application, they are the same in substance.
Yes, some aspects of information technology have become well understood and should be treated as utilities. Some sophisticated information technology departments already do this, and in so far as Carr’s book encourages others to do so it serves an important purpose. But like business, information technology is a moving target and it would be disastrous to treat IT, as a whole, as a commodity.
Without a careful reading of the fine print, Carr’s book can be easily misconstrued as making the argument that all forms of information technology, and the information that flows through it, are commodities. "Avoiding innovation" in all aspects of information technology would be a grave mistake.
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