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It Doesn't Matter Essay

1047 words - 5 pages

The article ‘IT Doesn’t Matter’ by Nicholas Carr provides an interesting yet a disputable perspective on the strategic importance of Information technology (IT). He argues that IT has become a commodity providing little competitive advantage. Also, any technological advancement is quickly and broadly copied, rendering it meaningless for competitive advantage. So the companies should rethink how much they pay for IT given this reduced return on investment. The article asserts that information technology is inevitably headed in the same direction as the railroads, the telegraph and electricity by becoming just ordinary factors of production. I do not agree completely with the author’s views. ...view middle of the document...

But sharing leads to loss of uniqueness for any company. Third, the author states that a competitive advantage brought by infrastructural innovations will not last forever. By the end of the buildout phase, the opportunities for individual advantage are largely gone. Lastly, IT is prone to commoditization as it is a transport vehicle for information and is greatly standardized and highly replicable. Finally, the author suggests the new rules of IT management. According to him, the IT managers should focus on spending less on IT investment, be a follower than an innovator and focus on risks and vulnerabilities1.
Opposing Views
F. Warren McFarlan and Richard L. Nolan responded to the article with ‘Why does IT matter’2. They do not agree with the views of Nicholas Carr. They state that Carr's examples of railroads and electric power played out over various years. It is worth noting that although these technologies mutated significantly, the mutation was on a totally different and much smaller scale than IT. After eighty years, a train moved six times faster that in earlier periods, but a computer produced in 2000 runs 10 million times faster than a 1960s' computer. The authors also mention that the most important thing that the Chief Executive Officer (CEO) and senior management should understand about IT is its associated economics. New technologies will continue to give companies the chance to differentiate themselves by service, product feature, and cost structure. Understanding the potential and then deciding when the time is right to seize these transformative applications will be neither routine nor boring for the CEO or Chief Information Officer (CIO)2.
Another article ‘IT Delivers’ by Frank Hayes talks about how to gain the real competitive advantage3. He challenges the views of Nicholas Carr by stating that IT does matter. He states that it is true that a sustainable competitive advantage can not be gained directly from IT. But that does not make IT and its innovations any less important. Competitive advantage may not be obtained just from getting products, services and information. It can be gained from processes, skills and execution. IT can help a business maximize its success by...

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