Nicholas Carr Does It Matter Pdf File
Why IT Doesn't Matter Anymore. IT is best seen as the latest in a series of broadly adopted technologies that have reshaped industry over the past two centuries—from the steam engine and the railroad to the telegraph and the telephone to the electric generator and the internal combustion engine. HBS professors F. Warren McFarlan and Richard L. Nolan respond to the much-discussed assertion by Nicholas Carr that company investments in IT are less and less likely to produce competitive advantage. Harvard Business Review editor-at-large, Nicholas G. Carr, ignited a firestorm in the opinion.
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Our recent interview with Nicholas G. Carr about his article in the May issue of Harvard Business Review caused an uproar in IT circles (see story). His thesis, that IT has become a commodity that no longer provides strategic advantage, was so passionately refuted by readers and some of the big thinkers in the IT world that we felt compelled to give equal time to their views. Kathleen Melymuka spoke separately with Rob Austin and Andrew McAfee, both assistant professors of technology and operations management at Harvard Business School; Paul A. Strassmann, an IT management consultant, a Computerworld columnist and recently the acting CIO at NASA; and Tom DeMarco, a Cutter Consortium analyst and co-author of Waltzing With Bears: Managing Risk on Software Projects (Dorset House, 2003). They make the case for why IT matters more than ever.
McAfee: I don't agree that IT doesn't matter, but I think Nick wrote a really interesting article. He provided a great service by focusing the debate.
DeMarco: It created a buzz, but it's not a healthy buzz. All the response doesn't imply a useful argument. It's traceable to the deep-seated ignorance of the article.
Carr says that information technology has become so pervasive that, like railroads and electricity, it has lost its strategic value. What's wrong with his argument?
DeMarco: The argument is not very well made. He presents three graphs: railroads, electric power and IT. Each has a very similar curve, so he deduces that information technology is commoditized. But what's really plotted in the graph is the number of computers, which is not the same as information technology. Boxes have been commoditized for a long time. This is very old news. But he tries to use this to prove IT as a whole is commoditized, and that's just wrong.
See a collection of opinion columns on the controversy plus the original interview with Carr at Viewpoint: Does IT Matter?.
Austin: He says ubiquity, not scarcity, is the problem with IT. He seems [to think] that IT is primarily hardware. The problem is not a scarcity of equipment; it's always been a scarcity of ability—the ability to envision new possibilities from IT and understanding how to get it all to work. If IT were not a source of competitive advantage, you would rarely see IT projects fail. There are still vast differences in how much value people obtain from IT. Look at Wal-Mart, Dell, Cisco and their attempted imitators.
McAfee: It's a matter of whether we're talking about IT enhancing productivity or competition. The telephone has made us able to get more done in a day. Has the phone continued to radically affect the competitive balance among companies? No. That's Nick's point. Some kinds of IT fall into that category. For example, e-mail. We all have it; we all use it. But it's not competition-changing, so overinvesting in it is not a great idea. The bases of competition revolve around other things.
[But] there are industries where technologies are fundamentally important. Dell has an IT business-process automation infrastructure that really works. If you don't have one of those, do you have a hope of competing in that industry? And even if you want to put one of those in place, there will be a really big difference in how successful you are vs. another company, because it's tough organizational change in a technology wrapper. We're not equally good at doing it. If we find ourselves competing in an industry where these kinds of systems are important, then IT matters like crazy.
Carr says there's virtually no competitive advantage to be gained through IT, because anyone can buy what you buy. How would you respond?
| Tom DeMarco, a Cutter Consortium analyst |
DeMarco: There may be no competitive advantage to buying IT. You can gain competitive advantage by innovating in IT. The number of examples is too obvious to belabor.
Strassmann: It is not what you buy but what you do with it. Carr most likely used the same Microsoft Word program to write his article as I used in my rebuttal [letter to Harvard Business Review], yet we got different results.
Austin: Geoffrey Moore talks about core and context. Context is the commodity stuff, and that's a pretty big percentage of IT. You can buy context anywhere, and that may be what Carr's talking about. Core is the stuff you compete on. Companies that succeed, or succeed faster, obtain advantage. Think of Wal-Mart's supply chain systems. Those are core, proprietary: They grew them or glued them together themselves. And surely that is providing competitive advantage.
Carr says that even when a company does achieve some competitive advantage through IT, it's bound to be short-lived. Isn't that true?
Strassmann: That is certainly not true. When Wal-Mart started 40 years ago, anybody could have gone to NCR and bought the Teradata system, which is really the basis of Wal-Mart's success. The fact that you buy identical technology doesn't buy you anything. It's how you manage it.
DeMarco: Change is fast and becoming faster, and anything you do will have a shorter payback than similar things you might have done a decade or a century ago. That proves you can't count on a single-shot competitive advantage, but you can gain a continuing advantage by being a continuing innovator in IT.
Carr seems to view IT as a corporate service akin to accounting or building maintenance. What is it about IT that makes it truly different?
| Rob Austin of Harvard Business School |
Austin: He seems obsessed with the plumbing. He says it's hard to imagine a more perfect commodity than a byte of data. As we move to the knowledge economy, IT is not just a transport mechanism; it's a transformational mechanism. It's increasingly about the transformational potential of bytes.
DeMarco: When we talk about IT, it really is about change. If you want to change your company, you build an IT system to make it possible to do that change. That's why IT is hard. The idea of IT becoming commoditized is as silly as the idea that change is becoming commoditized.
Carr sees the future CIO as a bean counter, not a strategist. What do you see as the future role of the CIO and the IT department?
McAfee: It's really going to depend on the situation. A CIO in a headhunting firm might be a cost minimizer—really interested in wringing the maximum efficiency out of minimum technology. But the CIO of Cisco or Wal-Mart or Dell had better be a really different kind of person. He'd better be an IT strategist and an organizational change specialist and a business needs assessor and a tough cost minimizer, or he'd better be talking with all of them if he's not.
Austin: I think the CIO has to continue to facilitate the process of helping the business people understand the technical possibilities. That is not a bean-counter role. It involves imagination, vision and the ability to explain that vision to people who are not native technologists. The business guys understand how to make a business work, and the technologists understand the potential in new technology, and the CIO has to get those two spheres to overlap.
Strassmann: Let's go back to fundamental economics. The financial assets CFOs report on account for less than a third of the value of a corporation. Two-thirds of the valuation is based on knowledge capital, which is information. The CIO of the future will be responsible for the custody and protection and security of knowledge capital. Right now only the CFO has to sign a financial statement. I predict within 10 years the CIO will have to sign for the security of knowledge assets. Right now only the CFO can go to jail. My hope is for the CIO of the future to be also eligible to go to jail.
DeMarco: There has to be an element of vision. That's the thing that can't be commoditized. Carr's advice to be a follower is so upsetting. He's saying, 'Don't be a visionary.' This is unhealthy, because some weak-minded but powerful person looking for something to cut will read Carr and say, 'Let's cut IT.' That's a shame. The view that IT doesn't matter is equivalent to the view that the printing press has had its run. But the printing press wasn't about printing enough Bibles for all the people. It was about creating a man whose knowledge is bigger than what lies in his head, and the impact of that has never peaked. I think that will be true of IT as well. Man is an information animal, and IT lies as close as anything to the core of his endeavors.
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Nick Carr's article 'IT Doesn't Matter' was published in in Harvard Business Review in May 2003 and ignited an industry firestorm for its perceived dismissal of the strategic value of IT.
Ten years ago, Nick Carr said IT doesn't matter -- sort of.
The jarring headline of Carr's May 2003 article, 'IT Doesn't Matter,' is what many people remember, and it tends to overshadow his more thought-provoking thesis: that companies have overestimated the strategic value of IT, which is becoming ubiquitous and therefore diminishing as a source of competitive differentiation.
'The opportunities for gaining IT-based advantages are already dwindling,' Carr wrote in the Harvard Business Review article. 'Best practices are now quickly built into software or otherwise replicated. And as for IT-spurred industry transformations, most of the ones that are going to happen have likely already happened or are in the process of happening.'
[ Q&A:Nick Carr on 10th anniversary of 'IT Doesn't Matter'
BLOG POST:IT Doesn't Matter: What every IT pro needs to know to survive in the cloud era -- Part 1 Part 2]
Carr advocated spending less on IT, both to reduce costs and to decrease the risk of buying soon-to-be obsolete equipment and applications. He also predicted the rise of utility-like computing: 'The arrival of the Internet has accelerated the commoditization of IT by providing a perfect delivery channel for generic applications. More and more, companies will fulfill their IT requirements simply by purchasing fee-based 'Web services' from third parties -- similar to the way they currently buy electric power or telecommunications services.'
I knew I was writing something that was provocative and that went against the grain of a lot of the rhetoric that was out there about information technology and business. But the reaction went way beyond what I expected.'
— Nick Carr
The article ignited an industry firestorm. It wasn't shared on Facebook, it didn't trend on Twitter and it wasn't voted up on Reddit -- none of those sites existed at the time. The article went viral the old school way: It was passed around the office, written about by other publications and discussed on IT news forums such as Slashdot.
Download linguaphone pdq turkish free online. Carr spoke with Network World this month about his inspiration for the article, the backlash, and the article's unexpected longevity. (Read the full Q&A here)
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'I knew I was writing something that was provocative and that went against the grain of a lot of the rhetoric that was out there about information technology and business. But the reaction went way beyond what I expected,' Carr says.
His editor agrees. 'He, I, and we (all of us at HBR) knew that it would be controversial,' said Tom Stewart, former editor of Harvard Business Review, in an email to Network World. 'We also suspected that it might be misinterpreted as being a Luddite's argument for typewriters rather than a nuanced argument that IT was strategically important not for itself but for what it enabled one to do, just as (using the analogy Nick used) electricity was more important for what people did with it than for the fact that it spawned a utilities industry.'
'Our suspicion proved well-grounded: Nick was attacked as much for what he did not say as for what he said -- maybe more,' said Stewart, who today is chief marketing and knowledge officer at Booz & Company.
IT suppliers were the most upset, Carr recalls, since he essentially was telling corporate leaders to ignore vendor hype and to stop overspending on IT.
'The biggest backlash came from IT companies. Steve Ballmer called it hogwash, Carly Fiorina dissed it. All the vendors were really up in arms,' Carr says.
In the trenches, CIOs and IT executives had more mixed reactions. 'Some of them really took offense at the article, but others said, 'Yeah, I can see a lot of sense here. This is kind of where we're heading, this is what I'm trying to do,' Carr says.
Andi Mann, a former industry analyst and longtime enterprise technologist, saw that dichotomy among the IT executives he worked with. Some IT pros, threatened by the thought of losing control, wanted to prove Carr wrong to their CEOs and maintain the status quo. Others saw Carr's essay as a wake-up call.
'One group was trying to maintain their legacy and trying to stop the momentum of change, of innovation, of enabling rather than controlling the business,' Mann says. 'The other group was saying to me, 'I think this guy's onto something, and I want to be the innovative CIO, I want to be the CIO who actually uses this technology.' Both groups were interested in trying to prove Nick Carr wrong, but for different reasons and in different ways.'
Making a career of it
'IT Doesn't Matter' turned out to be a career-defining missive for Carr, who followed it up with multiple books (including 2004's 'Does IT Matter?' and 2008's 'The Big Switch') speaking engagements, and another ire-raising essay titled 'The End of Corporate Computing.'
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Looking back on the 10-year-old HBR essay, Carr says he got some parts right and some parts wrong.
'Back then, IT companies tried to sell the latest server model as the key to strategic advantage -- you need to be on the cutting-edge of infrastructure or your business is going to be overwhelmed by competitors. At that level, the idea that the basic technology was going to be neutralized as a competitive differentiator has basically panned out,' Carr says.
On the other hand, IT pros have new challenges to address, such as cloud strategy, mobility and social media. 'From another point of view, I think I probably understated the new things that IT departments would have to grapple with. I don't think I expressed the full range of what was to come,' he says.
Industry watchers agree -- to varying degrees.
'He didn't look into the future. He looked at the present state and saw a lethargic, slow, controlling, almost domineering department of IT,' says Mann, who today is vice president of strategic solutions at CA. 'He got it right: IT needed to be fundamentally different. But he also got it hideously wrong.'
Suggesting that IT doesn't matter, that it's commoditized, and that cloud providers can do the job of IT fundamentally underestimated the value that IT brings to businesses, Mann says. 'Nick Carr is a provocateur and author rather than a technologist, and I don't think he understood what IT does when it does it well.'
More on the same page as Carr was analyst David Tapper, vice president of outsourcing and offshore services at research firm IDC, who says he fundamentally agreed with Carr's article.
'I think he got people to start to think about it, to say, 'Let's step back from what we do and ask: Where is this all going, folks?' He was right. I think he needed to modify it a little bit, but he struck the right chords,' Tapper says.
To Tapper, one distinction Carr should have made is to specify who will care about IT in the future: 'I think he should have said, 'To whom should IT matter?' Because it won't matter to the consumer, it will matter to the suppliers and the service providers,' Tapper says. 'The service providers are the ones that are going to buy all this stuff, they're going to integrate it and operate it.' To everyone else, technology is just a tool to do their jobs, something that's taken for granted, according to Tapper. 'Do I wake up in the morning thinking about my telephone or the boiler in my house? No. Only when there's a problem. Otherwise I never give it a second thought.'
Tapper agreed with Carr's prediction that IT would move to a utility model. 'Once the masses of the world need something, it always becomes a utility. There are no exceptions,' Tapper says. 'It's the only way you can deliver it. And technology is now something we can't live without.'
March to the cloud
Ten years after the HBR article, companies still have a long way to go on the path to cloud computing.
'If you look at IT, the bulk of investment these days, certainly on the vendor side, is on cloud systems and applications,' Carr says. 'On the other hand, if you look at corporate spending, cloud is still a fairly small percentage of overall spending, even though it's growing quickly. So we're still kind of between two eras.'
Tapper agrees. 'Companies are in the stages of restructuring their IT departments and trying to form them around cloud categories, such as platform as a service. They're outsourcing or procuring different clouds. They're trying to get it under control. It's a bit out of control now -- one company had 30 Amazon contracts and didn't know about them.'
Back when 'IT Doesn't Matter' was published, the idea of utility-like computing was relatively new in the trenches of enterprise IT. But Mann saw some IT leaders accept the implicit challenge and begin laying the groundwork for cloud computing because of Carr's article.
'There were a couple of organizations that specifically started talking to me about virtualizing everything, automating everything, implementing chargebacks and things like that. That was the start of a number of my clients' journeys to the cloud,' Mann says.
The fact that it's still being talked about suggests Carr made some valid points.
'If Nick had just merely [been] a provocateur/bomb-thrower/iconoclast -- i.e., had he been wrong -- then the article would have been a 9 days' wonder, not something you'd like to write about on its 10th anniversary,' Stewart said.
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At the very least, the article left a lasting impression. 'It's still a bit of a raw nerve for a lot of people,' Mann says.
Ann Bednarz covers IT careers, outsourcing and Internet culture for Network World. Follow Ann on Twitter at @annbednarz and reach her via email at abednarz@nww.com.