IT Matters - Punditry Doesn't


Every IT manager in the planet was dumbfounded when last year, an article entitled IT Doesn't Matter (by Nicholas G. Carr) hit the streets and promptly became the new top management gospel (besides required reading at every MBA and post-grad management course).

One of the reasons was that it cut against the grain of common sense in the IT industry, casting IT as a "commodity" that should be pushed towards the background in terms of both strategic and executive management, no more important towards competitive advantage than electricity or communications (which, by the way, was where I felt it was more than a bit short-sighted).

Now Techdirt picked up one of the best counter-arguments and the whole thing seems to be springing back into focus.

Having (very recently) read Carr's original article again (which lies now somewhere in the midst of my other course paraphernalia), I must say that the assertion of IT's commoditization is (in my view) largely bogus. It might be true if you consider manufacturing and "industry" at large - as well as portions of the services industry where you can support all your IT needs with off-the-shelf software components, but it is completely wrong where it concerns telecomms and online services - especially innovative telecomms and online services.

The reasons for that are simple (and pretty obvious to insiders, although I can understand how generalists who know nothing of how telecomms has evolved in the past decade might miss it): in these rapidly changing businesses, any sort of IT quickly becomes obsolete - especially if it is built on "commodity" products, which lack the specific focus and feature sets required.

Hence, that memorable assertion was wrong in and by itself when applied to these businesses.

This is not to say that solutions are not standardized (and telecomms is one of the most standards-oriented industries of our civilization), but that they require extensive customization. And that, despite current efforts towards technology convergence and simplification at all levels, means internal IT know-how is still a core factor in determining the bottom line.

You can have IT any way you like (partially outsourced, centralized, distributed, vertically integrated, full-blown benchmarked CRM, etc.), but if you fail to acknowledge that internal IT know-how is a critical part of your core business assets, you'll never be flexible enough to be competitive in modern telecomms.

Of course, like Varian's article states, Carr is right on the issue that "it's not information tecnology itself that matters, but how you use it" (the emphasis is mine, and I wholeheartedly agree with that bit - which seems to be lost on most IT managers these days), but has failed in acknowledging a simpler truth: commoditizing IT has in fact increased the level of innovation manyfold, and that has actually increased IT's compound value.

So, after all, having IT as a commodity makes IT matter even more.

IT's a curious thing...

Update: this article at CIO Magazine (which further debunks Carr's claims) was just pointed out to me.