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 will get more value for its money. Lastly, he focuses on Vulnerabilities not opportunities, reasoning that a brief disruption in IT availability can be devastating to a firm and the risks of more and different disruptions are increasing.

The article by Carr raised a heavy debate among the most prominent people in the IT industry among some of them is Professor Steve Alter and President of eGlobal CIO Bruce Skaistis and many more. The article created a heavy debate dividing the IT industry into two sides, one side, with among others, Intel’s CEO Carig Barret and HP’s Carly Fiorina saying that IT would still give firms competitive advantages and arguing that Carr was off track. The other side, arguing that Carr was rightfully drawing attention to the very heart of the question which CIOs and CFOs struggle with the most. Carr’s article challenges all IT supplier firms over the world and therefore it is obvious that Intel and HP, which are both heavy hitters in the IT industry goes out and contradicts Carr’s arguments. I think IT always have been sold as a mantra, which can give firms enormous strategic and competitive advantages, however firms tend to buy packages of solutions from IT firms which doesn’t give them any advantage. IT products such as payment programs, economic-systems and IT-production programs does not give firms any competitive advantage because all firms are using the same products. I somehow agree with Carr’s overall argumentation, that IT is becoming more of a commodity, however I believe that creating a competitive advantage is not solely about IT. It is also about managing costs and assessing risk, and not just about the technologies. IT is evitable and is a big part of any firm it is therefore necessary for IT and firms to find a balanced way of applying and using each other. IT still has the potential to improve productivity and easiness of running a business, but the strategic question is how IT and firms integrate their relationship?

I think IT always will matter, but it is how we as people and workers use IT that matters.