IT Doesn't Matter . . . . Or Does It?
Sept. 19, 2003 - Nicholas Carr, author of "IT Doesn't Matter," found himself outnumbered -- and outgunned -- at SunNetwork.
With his provocative article in the Harvard Business Review, Carr sparked a widespread debate about the value of information technology -- a debate that took place in the pages of the New York Times, Fortune, and Computerworld, among other publications, and extended to a panel discussion at Sun's annual conference.
In his article, and on stage, Carr contended that any advantage gained through technology is soon erased since competitors can simply buy the same package -- and get a lower price if they wait.
Panelist Bill Gurley of Benchmark Capital had a different assessment. "The value of that marginal advantage is everything," he said. "This is like advising Indians in the early 1800s: Okay, I recognize you have bows and arrows and those guys have rifles, but if you just wait five or 10 years those rifles are going to be a lot cheaper."
While conceding that companies often have no choice but to invest in technology to maintain parity with competitors, Carr argued for a more conservative approach, saying it's often better to follow than lead.
"I think your theory may appear correct in a tough economic environment," said Scott McNealy. "I'd love to hear your thoughts on how that works in a fast-growth environment."
"At this point, IT capabilities for most business processes for most industries have essentially reached their evolutionary end -- or at least closer to the end than the beginning," Carr said. "At some point you're going to say, 'I've got enough.'"
"He's given up on innovating for competitive advantage," McNealy said of Carr.
Comparing the ups and downs of the economy to jagged lines of a lie-detector test, McNealy said, "Nobody can forecast anymore. You have to be the best at reacting. You have to know more about what happened in the last six hours than your competitors did -- and that isn't going to happen through smoke signals or the Wells Fargo stage coach."
One of Carr's complaints, joked about on stage, was that few readers made it past his article's controversial title. His point, he said, is that IT's strategic importance has diminished. "It's still a competitive necessity," he said.
A reading of Carr's article may create the impression that Carr has actually laid out a pretty strong case that IT does matter -- that it is, in fact, indispensable to business.
Consider this quotation, attributed to Charles H. Duell, U.S. Commission of Patents, in 1899: "Everything that can be invented has been invented."
The truth is Duell never said that. In fact, patents were on the rise during his tenure, and he felt that progress and prosperity depended on it.
But we now have Carr on the record saying, "And as for IT-spurred industry transformations, most of the ones that are going to happen have likely already happened."
We'll see about that.
A .pdf version of Nicholas Carr's article "IT Doesn't Matter" can be purchased through Harvard Business Online for $7.00.
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