Last evening two tech experts brought to the CN Tower a debate over whether IT is a strategic investment or more of a utility. They explored both sides of this issue, which stems from a controversial article that one of the combatants wrote way back in 2003.
In the spring of that year Nicholas Carr’s contentious column, entitled Why IT doesn’t matter anymore, appeared in an issue of the Harvard Business Review. Carr’s article submitted that companies shouldn’t view IT as a strategic investment. Rather, companies should view IT as an enabling force for business, perhaps no more or less important than electricity or phone service.
For the past year and a bit Don Tapscott, the Toronto-based CEO of IT advisory firm New Paradigm and adjunct professor at the Joseph L. Rotman School of Management at the University of Toronto, has been raising his voice in opposition to Carr’s assessment of the situation, pointing out that proper IT investment spells a competitive advantage for companies, capable of propelling enterprises beyond their competitors.
Carr and Tapscott brought their opposing opinions to Toronto yesterday in the form of a debate sponsored by business intelligence app-maker SAS Institute Inc. and microprocessor maker Intel Corp.
Carr opened the bout with his list of reasons for companies to take IT as something other than strategic. He said IT is largely “infrastructural,” as is electricity and the railroads. As a result technology might provide some small competitive advantages, but they’re not sustainable. “Companies can still innovate with technology…but the relative advantages are very weak.”
He also said there’s a certain “resistance to the upgrade cycle” among corporations these days as businesses discover that they can make do with existing systems, despite vendors’ insistence that the latest versions spell strategic advancements.
“It’s not being an innovator that matters going forward,” Carr said. “It’s being a good manager.” IT managers must make technology cost effective and “invisible.”
Tapscott pulled no punches in his rebuttal, saying Carr’s “argument is fundamentally wrong.” He said Carr’s line of thinking flunks the “common sense test:” few would argue that better information is anything but a strategic leg-up on competitors. IT enables better information. How can IT be little more than a utility?
He also cited Cisco Systems Inc., FedEx and Walt Disney Co. as companies that lead their respective business spaces and also happen to be big-time IT believers, drawing a dotted line between tech investments and bottom-line success.
He said the dot-com bust, the “telecom winter” of 2001 to 2003 and the accompanying bear of a stock market caused enterprises to become cautious about tech purchases, but “the future will be a bleak one” if businesses fail to “find the opportunities to compete and exploit them” via IT.
Carr accused Tapscott of dodging the real question at hand with the IT-is-information feint. “Does information matter? Of course it matters,” Carr said, but the fact doesn’t address the issue of technology as a competitive investment. IT and information aren’t the same thing.
Tapscott said it makes as much sense to separate information and IT as it does to distinguish between a bank and financial services. One doesn’t exist without the other. “If we agree information matters, by definition information technology matters.”
Audience members entered the fray during a question-and-answer period. One took issue with Tapscott’s assumption that information is necessarily a competitive advantage. “It’s how you use that information,” the audience member said, suggesting that raw data is only as good as the company’s execution of the material. “In many ways it’s like another commodity.”
Another attendee said technologies like radio-frequency identification (RFID) and geo-spatial applications raise industrial productivity, so Carr’s off the mark.
But at the end of it all, both battlers came out on top, according to one audience member. Ron Jones, a member of MTS Allstream Inc.’s vendor relations and asset management services team, said Tapscott’s insistence that smart IT investment counts as a strategic lift and Carr’s argument that companies should squeeze commoditized technology for cost savings are not so different. They’re both good practices for IT management.
“I think it was pretty well a tie,” Jones said.
Tapscott said this is the fifth time in less than two years that he and Carr have taken this debate on the road.
“We’re creating a little mini industry,” he said, adding later that it affords people working in the tech industry an opportunity to consider the larger context of their chosen profession.
— Do you think IT represents a competitive advantage, as Tapscott argues, or is it a utility as Carr describes it? Express yourself. E-mail [email protected]