Does information technology matter? Well, does it? “Does IT Matter? Information Technology and the Corrosion of Competitive Advantage” is the title of Nicholas G. Carrs new book, published a year after his bombshell article in the Harvard Business Review, “IT Doesnt Matter.” Does the switch in the title from a statement to a question indicate waffling on Carrs part?
Not really. I have always thought the headline on last years article was written by a copy editor who got carried away. It made a great bumper sticker, but it did not reflect the somewhat-ambivalent analysis that was present in the article. The headline implied dismissing IT out of hand. In turn, many IT vendors dismissed the article out of hand. The reality is that Carr thought then and continues to think that IT does matter—but probably not as much as you think it does and certainly not as much as the hypemeisters would have you believe.
As he expressed in his Free Spectrum column in last weeks issue of eWEEK, Carr asserts that timing in IT is everything. Invest big bucks in IT at the wrong time, and youll be throwing your money away. On the other hand, there are opportune moments to invest in IT. Spend then, and youll reap returns. That said, Carr does maintain that IT is getting mature to the point that its very hard to use it to gain strategic advantage.
“It has become increasingly clear that many of the smartest users of technology stay well back from the cutting edge, waiting to make their purchases until standards and best practices solidify and prices fall,” Carr writes, adding, “When it comes to IT, the tortoise often beats the hare.”
A near-perfect embodiment of this philosophy is espoused by equipment manufacturer Dell. During my recent visit to Dell headquarters, Michael Dell and top executives made many references to being in the right place on the S curve of technology adoption—that is, once it has become standardized and ripe for high-volume sales. This is the kind of ubiquitous technology that Carr calls “utility-like.”
Indeed, the notion that IT is getting to be a utility, like electricity, is his central thesis. Early in his book, Carr points out that in the early 1900s, many companies had vice presidents of electricity. They dont anymore, of course, and Carr says CIOs could be headed for the same fate.
To get a handle on IT resources, Carr suggests that companies set targets for trimming their IT budgets by, say, 5 percent per year, making exceptions as business requires. There are plenty of vendors whose companies and careers are threatened by this kind of thinking. Count on them to trash the book, as they did the article, without actually reading it.
But Carr is not an IT Luddite: “At certain points, it may make sense for a company to invest heavily in a particular IT system or capability or even to pursue a first-mover strategy,” he writes. In sum, Carrs work is thorough; its scholarly without being dry or pedantic; its concise without being incomplete. IT thinking rarely gets a contribution of this caliber. Read it.
Out and About
The notion of it as a utility lends itself naturally to the impulse to outsource. Thats what Karl Kaiser, CIO for the city of Minneapolis, did. “We went from one crisis to the next. I decided there must be a better way. … I wanted to turn the IT infrastructure into a utility,” said Kaiser, who selected Unisys, which has a data center in nearby Eagan, Minn., as a provider.
The seven-year, $60 million contract covers server and desktop hardware maintenance and support, operating system environments, PDAs, and laptops. The city moved its 150-odd Intel-based servers from HP, IBM and Unisys to the Unisys facility, upgrading equipment in the process. A backup and recovery site across town was included in the deal. Desktop systems, formerly Compaq, are being replaced with Dell machines. Kaiser, who even managed to get union workers to buy in, estimates $20 million in savings over the life of the contract. If that werent enough, the deal won Kaiser, the city and Unisys Outsourcing Centers 2004 Outsourcing Excellence Award in the “Best First Steps” category.
Stan Gibson can be contacted at firstname.lastname@example.org.