There's nothing like a punchy headline

CASE STUDY

There's nothing like a punchy headline (see above, for instance) to get an article some attention. A recent long piece in the Harvard Business Review shockingly labeled "IT Doesn't Matter" has garnered the magazine more buzz than at any time since the Jack Welch affair. The article has been approvingly cited in the New York Times, analyzed in Wall Street reports, and e-mailed around the world. But without such a dramatic and reckless title I doubt the article would have been much noticed. It's a sloppy mix of ersatz history, conventional wisdom, moderate insight, and unsupportable assertion. And it is dangerously wrong.

Author Nicholas Carr's main point is that information technology is nothing more than the infrastructure of modern business, similar to railroads, electricity, or the internal combustion engine--advances that have become too commonplace for any company to wangle a strategic advantage from them. Once-innovative technology becomes merely a necessary cost. "IT management," writes Carr, "should, frankly, become boring." He thinks today's main risk is not underusing IT but overspending on it.

Carr misunderstands what information technology is. He thinks it's merely a bunch of networks and computers. He notes, properly, that the price of those has plummeted and that companies bought way too much in recent years. He's also right that the hardware infrastructure of business is rapidly becoming commoditized and, even more important, standardized. Computers and networks per se are just infrastructure. However, they are only the boring part of the IT equation.

One of the article's most glaring flaws is its complete disregard for the centrality of software. Any human knowledge or information can be mediated and managed by software. Charles Fitzgerald, Microsoft's general manager for platform strategy, says that Carr doesn't put enough emphasis on this, the "I" in IT. "We have definitely hit an inflection point where suddenly the least expensive technologies are the most powerful ones--like Intel's microprocessors," Fitzgerald says. "But the source of competitive advantage in business is what you do with the information that technology gives you access to. How do you apply that to some particular business problem?" To say IT doesn't matter is tantamount to saying that companies have enough information about their operations, customers, and employees. I have never heard a company make such a claim.

Who cares about the hardware? Not, in general, the experts I contacted about Carr's article. "We never actually needed IT--we only need its functions. Good technology should be as invisible and as cheap as possible," says Joel Kurtzman, a top business strategist at PricewaterhouseCoopers. Paul Strassman, who has spent 42 years as a CIO--at General Foods, Xerox, the Pentagon, and most recently NASA--was more emphatic. "The hardware--the stuff everybody's fascinated with--isn't worth a damn," he says. "It's just disposable. Information technology today is a knowledge-capital issue. It's basically a huge amount of labor and software." Strassman was so distressed by Carr's article that he sent HBR a six-page critique. Says he: "Look at the business powers--most of all Wal-Mart, but also companies like Pfizer or FedEx. They're all waging information warfare."

Q1. Do you agree with the argument made by the business leaders in this case of the support of the competitive advantage that IT can provide to the business? Why or why not?

Q2. What are several ways that IT could provide a competitive advantage to a business? Use some of the companies mentioned in the case as examples