...BIM 5013 Management Information Systems Case Study - IT Doesn’t Matter by Nicholas Carr Background This article “IT Doesn’t Matter” written by the Harvard Business Review’s editor-at-large, Nicholas G. Carr in May 2003 highlighted and that the power and ubiquity of information technology has grown inevitably so much so that the technology by itself will unable to deliver the competitive advantage. The article did not anywhere affirmed IT is not important, but rather argues that the strategic value of IT is diminishing as it gets harder and harder to utilize IT as an edge over competitors. In other words, it is scarcity that allows companies to use it for sustained competitive advantage. Carr viewed that when IT is truly an infrastructural technology, it is therefore prone to commoditization – a process which is already evident and reflected by its high replicability and sharp reduction in IT prices. He further added that the more IT becomes pervasive and companies view it more critical to their success, the more heaving spending on IT itself underscores risk than generating competitive advantages. Why Carr’s Claims are not Wrong Carr said that it is the ‘scarcity’ that makes a business resource truly strategic and allows companies to use it for a sustained competitive advantage. According to him, it is only by doing something that your rivals can't that one gain an edge. Core functions of IT such as automation - data storage, data processing, and data transport - have now...
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...IT Doesn’t Matter “IT Doesn’t Matter” is an article written by Nicolas G. Carr and published in the May 2003 edition of the Harvard Business Review. In this article Carr discusses why IT is no longer a strategic resource for companies and in light of this, how companies should now manage their IT. Carr’s argument that IT is no longer a strategic resource stems for his claim that IT has become ubiquitous and is no longer scarce. He does not deny that in its early stages of development, when IT resources were scare or rare, it was a strategic resource that companies could use to gain a competitive advantage. Carr goes on to explain that IT has become more affordable and thus is available for all companies to use. He claims that this makes IT less of a strategic resource and more a commodity. He compares IT’s transition from resource to commodity to that of the development of railway systems and electrical power. He references the fact that these now common commodities were once strategic resources that were used by companies to gain competitive advantages in the late 1800’s and early 1900’s. Carr goes on to explain that no companies base their business strategy on using electrical power and thus business now should transition away from basing strategy on IT. Carr continues with his argument that IT doesn’t matter by describing how the biggest risk with IT is overspending on unnecessary resources, creating a cost disadvantage. Carr outlines three key philosophies...
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...Summary and discussion of Nicholas G. Carr’s article “IT Doesn’t Matter” published in 2003 by Harvard Business Review. IT Doesn’t Matter Carr’s main argument is quite simple. IT is extremely important within corporations, but IT has become a universal resource for firms. The basis for a sustained competitive advantage is scarcity, not ubiquity. Hence, IT has become a commodity and therefore it is no longer a strategic advantage – the significance of IT doesn’t matter anymore. He argues, “By now, the core functions of IT ¬– data storage, data processing and data transport ¬– have become available and affordable to all. Their very power and presence have begun to transform them from potentially strategic resources into commodity factors of production. They are becoming costs of doing business that must be paid by all but provide distinction to none” This quote captures the essence of Carr’s argument he distinguishes between proprietary technologies and infrastructural technologies. He argues that IT has shifted into the latter category, becoming a common infrastructure utilized by all corporations. He explains this assertion with the examples of IT becoming a commodity like railroads or electricity. Carr then offers new guidelines for IT management; Spend Less, meaning firms are putting themselves in a cost disadvantage by using large investments in IT without posting good financial results. Secondly, Follow Don’t Lead, where he argues that by postponing IT investments firms...
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...(Volume13, 2004) 443-455 443 FROM THE CIO POINT OF VIEW: THE “IT DOESN’T MATTER” DEBATE Larry DeJarnett The Lamar Group larry.dejarnett@thelamargroup.com Robert Laskey Revelation 360 bob@revelation360.com H. Edgar Trainor Paramount Pictures ed.trainor@paramount.com EDITOR’S FOREWORD This article differs from all the articles CAIS published previously in that it is a debate on the nature of IT written by practitioners from three different points of view. It deals with IT Doesn’t Matter, a polemic written by Nicholas Carr, then editor of the Harvard Business Review in which he argued that the days when IT offered strategic advantage are long since gone and that managers therefore should undertake a different approach to IT. The paper, obviously, became notorious in the IS community. On December 3, 2003, the Southern California Chapter of the Society for Information Management, at its regular meeting invited three of its members with long experience as chief information officers to debate the issue. The title of the meeting was: "I.T. Doesn't Matter or Does It? How to Improve the Value and Perception of I.T.” The three debaters were assigned a position to argue: favorable to Carr (Laskey), neutral (DeJarnett), and unfavorable to Carr (Trainor). Edited versions of their remarks are presented below. Keywords: value of IT, perception of IT, role of IT, Nicholas Carr, I.T. Doesn’t Matter, IT Does Matter, contrarian point-of-view, strategic advantage, vanishing advantage of...
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...IT Doesn’t Matter Many years ago, in order to send a letter or communicate with someone from place A which is far away to place B was very difficult. It could take him/her long time to do. Also, trading from country A to country B had a lot of obstacles about geographic boundaries. However, when computers, Internet, and computer applications (technology information - IT) were appeared, they have pushed society up to a high level. Geographic distance is not a difficulty. People can easily communicate via email, chat or call. Today, almost of work is automatic, and it totally depends on computers. This leads to development in IT. Nevertheless, in Harvard Business Review article, Carr (2003) wrote that “IT Doesn’t Matter”. This causes confusion and debates. The first point is that IT is as a commodity. A single company can own proprietary technologies and use them to build competitive advantage because it is hard to replicate. On the contrary, infrastructural technologies are the property which “when shared” in industries rather than “when used in isolation”. A technology that is broadly shared to use cannot create competition. Thus, in his opinion, due to minimize costs, reduce vulnerabilities and restrict risk, Carr (2003) admitted that “IT has all the hallmarks of an infrastructural technology” rather than a proprietary technology. IT can be easily commoditized. First, he said IT is “a transport mechanism”, especially in data. By comparing IT with other commoditized...
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...Google announced on August 15, 2011 its acquisition of Motorola Mobility, the biggest acquisition this online search and software company has ever made. It is interesting enough that Google chose to perform a strategic alliance with Motorola Mobility. Motorola is a great American company with a rich history of innovation including the invention of the first cell phone. As a result of this acquisition the expected result is to utilize Motorola Mobility’s IT resources to help maintain that sustainable competitive advantage. With Motorola Mobility now being under Google, the company would benefit from the expertise of the existing Motorola engineers and employees, and would be able to more closely integrate their Android OS with hardware, allowing them to compete with Apple’s Iphone/IOs. While it’s true that with this $12.5 billion acquisition, Google intends to improve their sustainable competitive advantage by using IT Hardware from Motorola Mobility, I believe it is only a small part of their overall approach to be competitive. In the book Managing & Using Information Systems, the authors Pearlson & Saunders point out in chapter 2, Google’s main competitive advantage “Google’s search algorithm is a source of competitive advantage for the search company” (P.51). In order to keep a sustainable competitive advantage Google should continue to build on their strengths by introducing innovative products, continued releases of their Android OS, and seeking out strategic alliances...
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...IT as a Competitive Advantage Marcus Liubakka The College of Saint Scholastica Introduction In 2003, Nicholas Carr, published a controversial article titled “IT Doesn’t Matter”. The premise of his article defines IT as a digital data infrastructure, and compares its build-out to previous impactful infrastructure build-outs like electricity and the railroad. Carr claims that IT has become a commodity, and businesses can no longer use their IT as a competitive advantage. This paper will further analyze Carr’s article, and make recommendations as to how businesses can leverage IT as a competitive advantage for the future. Analysis Rationale To fully understand how a business can leverage IT as a competitive advantage, one must fully understand the concept. In short, a business has a competitive advantage if it has the ability to provide an added value to its customers that its competitors cannot. A competitive advantage is also obtained by providing a value to a customer equal to its competitors, but with a lower cost. There are many factors which play into achieving a competitive advantage, however, organizations need to focus on sustainable competitive advantages. “In his book Competitive Advantage, Porter claims the ‘fundamental basis of above-average performance in the long run is sustainable competitive advantage’” (Pearlson & Saunders, 2013, p. 28). A sustainable competitive advantage is predicated on successfully creating barriers to erosion (Piccoli & Ives, 2005)...
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...written by Nicholas Carr who asserts and cautions the effects that internet has on everyone to this day and even more so in the future. People nowadays can communicate with people all around the world using many different types of communications such as social networking sites, cell phones, emails, etc. Carr brings in many different scientific research as well as a couple of personal experiences to show the great change in technology and the internet. The author chose to write The Shallows from an epiphany he had realized, “It (his brain) was hungry. It was demanding to be fed by the net feed...I wanted to check email, click links, do some googling. I wanted to be connected” (Carr 16). The way that technology has changed and developed the internet has made Carr want to stress the fact that although technology is very useful, it can be very harmful to peoples’ brain in a way that it affects a person’s deeper level of thinking. Section II:The Author’s Background Nicholas Carr is a columnist, member of the Encyclopedia Britannica's editorial board of advisors, as well as an executive editor. Carr writes about technology, culture, and economics which have made his books New York Times Bestsellers in addition to being a 2011 Pulitzer Prize nominee. Aside from The Shallows, Carr has written two other influential books called The Big Switch: Rewiring the World, from Edison to Google and Does IT Matter? With the three books, Carr has sparked many debates and awareness. Carr has been...
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...Nicholas G Carr in his article raises some key issues often discussed in our day-to-day lives. How important is Information Technology (IT) in our lives? Does it ease or complicate our activities. The author shares his opinion that Information Technology should be treated as a commodity and as a strategic position is losing its value. The author compares IT with electricity and railroads and concludes that they follow the same path. He illustrates phases of electricity and railroads and how they moved from having high opportunities to becoming invisible so much so that they did not matter. The author feels that IT does not have a competitive advantage and the importance given to IT management should be reduced. Although, the author raises some valid points I disagree with the author. In my opinion, Information Technology is an enabler and if used effectively and efficiently can bring remarkable success and help achieve a sustainable competitive advantage for an organization. In order to prove his point, the author distinguishes between proprietary technologies and infrastructural technologies. According to him, proprietary technology can reap high profits but infrastructural technologies are meant to offer more value when shared than when used in isolation. After few years the infrastructural technologies become known to everyone, thus eventually becoming a commodity and losing value. The author describes IT as such an infrastructural technology that is deemed to become...
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...IT Doesn’t Matter by Nicholas G. Carr Reprint r0305b May 2003 HBR Case Study Leadership Development: Perk or Priority? r0305a Idalene F Kesner . HBR at Large IT Doesn’t Matter r0305b Nicholas G. Carr Is Silence Killing Your Company? r0305c Leslie Perlow and Stephanie Williams Global Gamesmanship r0305d Ian C. MacMillan, Alexander B. van Putten, and Rita Gunther McGrath The High Cost of Accurate Knowledge r0305e Kathleen M. Sutcliffe and Klaus Weber Hedging Customers r0305f Ravi Dhar and Rashi Glazer The Nonprofit Sector’s $100 Billion Opportunity r0305g Bill Bradley, Paul Jansen, and Les Silverman Best Practice Diamonds in the Data Mine r0305h Gary Loveman Frontiers Don’t Trust Your Gut Eric Bonabeau r0305j H B R AT L A R G E IT Doesn’t Matter by Nicholas G. Carr As information technology’s power and ubiquity have grown, its strategic importance has diminished. The way you approach IT investment and management will need to change dramatically. I n 1968, a young Intel engineer named Ted Hoff found a way to put the circuits necessary for computer processing onto a tiny piece of silicon. His invention of the microprocessor spurred a series of technological breakthroughs – desktop computers, local and wide area networks, enterprise software, and the Internet – that have transformed the business world. Today, no one would dispute that information technology has ...
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...To Build or Buy: Making decisions about Infrastructure and Applications Table of Contents Title Page1 Table of Contents2 Executive Summary3 The Asset Management Lifecycle and the Five Decisions4 Asset Lifecycle Management4 The Five Decisions4 Building versus Buying5 Building Software6 Building Pros & Cons6 Buying Software6 Buying Pros & Cons6 Making Decisions7 Ranking and Conclusion8 References10 Executive Summary While rapid advances in technology have opened an almost infinite number of possibilities for today’s businesses, organizations are typically challenged to exploit the latest trends to drive growth and market share. Our study found an important link between effective software development and the ability to successfully capitalize on today’s emerging technologies for competitive advantage. Advances in technology are growing rapidly and organizations are constantly trying to find ways stay ahead in the market and make profits. Organizations are now challenged to either buy off-the-shelf software or build customized software for their company in order to achieve a competitive advantage. Each choice yields its own pros and cons so there is no automatically correct decision. The choice that fits best lies in the goals of the company. In order to decide what is best for your company, the CIO needs to understand what it means to buy and what it means to build. Buying software ensures that the product has been tested and used by others. Therefore...
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...Business Communication Section B: Caselets (40 marks) This section consists of Caselets. Answer all the questions. Each caselet carries 20 marks. Detailed information should form the part of your answer (Word limit 200 to 250 words). Caselet 1 In mid-1984, Kartik, the general manager of Western Exports Ltd, Karachi, Pakistan was striving to implement a management information system. He was facing resistance from; his most senior supervisor Kartik wondered what he could do to overcome this resistance. Western Exports was an exporter of ladies’ cotton cloth garments. It was private company established from, his most senior supervisor Kartik wondered what he could do to overcome this resistance. Over the past 14 years, the exports of the company had grown from Rs. 0.71 million in 1972-73 to Rs. 59.76 million in 1984. Almost 90 percent of the exports went to the USA. It owned no manufacturing facility of any kind. It purchased cotton cloth from six different textile mills and had the cloth dyed and printed. This fabric was then passed on to 138 stitching subcontractors. The company had been expanding the product line over the years, and by 1983 it was exporting about one million garments in over 100 basic designs. The 100 designs were presented in range of fabric types, shades, designs and sizes. When seen in the context that the company got all these things done through subcontractors, the managerial control of the operations became quite challenging. ...
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...he pressure to transform our institutions of learning continues. Virtually every enterprise and institution is grappling with the disruptions and opportunities caused by Web-enabled infrastructures and practices. New best practices, business models, innovations, and strategies are emerging, including new ways to acquire, assimilate, and share knowledge. Using technologies that are already developed or that will be deployed over the next five years, best practices in knowledge sharing not only are diffusing rapidly but will be substantially reinvented in all settings: educational institutions, corporations, government organizations, associations, and nonprofits. But institutions of learning are in a unique position to benefit from an added opportunity: providing leadership in e-knowledge. T A REVOLUTION IN Donald M. Norris is President, Strategic Initiatives, Inc. Jon Mason is Executive Consultant, education.au limited, and Assistant Director, Educational Technology Standards Australia. Robby Robson is President and Senior Partner, Eduworks Corporation, and chair of the IEEE Learning Technology Standards Committee. Paul Lefrere is Executive Director E-learning, Microsoft EMEA, and Professor of E-learning, University of Tampere, Finland. Geoff Collier is CFO and Senior Partner, Eduworks Corporation. KNOWLEDGE SHARING By Donald M. Norris, Jon Mason, Robby Robson, Paul Lefrere, and Geoff Collier 14 EDUCAUSE r eview September/October 2003 © 2003...
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...www.hbr.org Studies of corporate performance reveal a growing link between certain kinds of technology investments and intensifying competitiveness. Investing in the IT That Makes a Competitive Difference by Andrew McAfee and Erik Brynjolfsson Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 Investing in the IT That Makes a Competitive Difference 11 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications Reprint R0807J Investing in the IT That Makes a Competitive Difference The Idea in Brief It’s not just you. It really is getting harder to outpace the other guys. Since the mid1990s, competition in the U.S. economy has accelerated to unprecedented levels. The engine behind this hypercompetition: IT. Thanks to powerful tools like ERP and CRM, backed by cheap networks, companies are swiftly replicating business-process innovations throughout their organizations. The firm with the best processes (order fulfillment, field installation, job closing) wins, but not for long. Rivals are striking back with their own IT-based process innovations. To gain—and keep—a competitive edge in this environment, McAfee and Brynjolfsson recommend a three-step strategy: • Deploy a consistent technology platform, rather than stitching together a jumble of legacy systems. • Innovate better ways of working...
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...Selling the Brand Inside by Colin Mitchell Reprint r0201j January 2002 HBR Case Study Bob’s Meltdown Nicholas G. Carr r0201a First Person Saving the Business Without Losing the Company Carlos Ghosn r0201b HBR at Large How Snapple Got Its Juice Back John Deighton r0201c Leading in Times of Trauma Jane E. Dutton, Peter J. Frost, Monica C. Worline, Jacoba M. Lilius, and Jason M. Kanov r0201d Getting It Right the Second Time Gabriel Szulanski and Sidney Winter r0201e r0201f r0201g r0201h Inside Microsoft: Balancing Creativity and Discipline Robert J. Herbold A New Game Plan for C Players Beth Axelrod, Helen Handfield-Jones, and Ed Michaels Best Practice Turn Customer Input into Innovation Anthony W. Ulwick Tool Kit Selling the Brand Inside Colin Mitchell r0201j To o l K i t Selling the Brand Inside You tell customers what makes you great. Do your employees know? by Colin Mitchell W hen you think of marketing, you more than likely think of marketing to your customers: How can you persuade more people to buy what you sell? But another “market” is just as important: your employees, the very people who can make the brand come alive for your customers. Yet in our work helping executives develop and carry out branding campaigns, my colleagues and I have found that companies very often ignore this critical constituency. Why is internal marketing so important? First, because it’s the best way to help employees make...
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