Does IT Matter?

This chapter centers around the idea of the strategic value that information systems can bring to an organization. Pay attention to the arguments around the idea of competitive advantage. After you read, reflect upon the arguments presented about the impact that information technology has on competitive advantage.

IT Doesn’t Matter

Just as a consensus was forming about the value of IT, the Internet stock market bubble burst. Just two years later, in 2003, Harvard professor Nicholas Carr wrote his article "IT Doesn't Matter" in the Harvard Business Review. In this article Carr asserts that as information technology has become more ubiquitous, it has also become less of a differentiator. In other words: because information technology is so readily available and the software used so easily copied, businesses cannot hope to implement these tools to provide any sort of competitive advantage. Carr goes on to suggest that since IT is essentially a commodity, it should be managed like one: low cost, low risk. Using the analogy of electricity, Carr describes how a firm should never be the first to try a new technology, thereby letting others take the risks. IT management should see themselves as a utility within the company and work to keep costs down. For IT, providing the best service with minimal downtime is the goal.

As you can imagine, this article caused quite an uproar, especially from IT companies. Many articles were written in defense of IT; many others in support of Carr. Carr released a book based on the article in 2004, entitled Does IT Matter?

Probably the best thing to come out of the article and subsequent book was that it opened up discussion on the place of IT in a business strategy, and exactly what role IT could play in competitive advantage. It is that question that we want to address in the rest of the this chapter.