Published: July 25th, 2003


The days of achieving strategic advantage through IT investment are gone. So says a recent Harvard Business Review article published in May.

In a piece entitled IT Doesn’t Matter, author Nicholas G. Carr says that through ubiquitous deployment, IT has reshaped business, and because of that is no longer strategic.

So, in a world today where businesses invest more than US$2 trillion in IT each year, where information technology has become mass deployed and commoditized, there is no strategic advantage to be gained. It is, says Carr, an infrastructure technology that offers much more value when it is shared.

IT’s evolution parallels other infrastructure technologies such as the telegraph, the electrical power grid and the railway. Carr argues that IT today has reached a requisite state of maturity and must now be considered a technology infrastructure.

The buildout of infrastructure technology, says Carr, forces standardization and renders comparable proprietary technologies obsolete.

As mentioned, IT is a much more valuable thing when it is a shared. Through increasing scalability and technical standardization, IT is has witnessed the creation of robust applications – from word processors to supply chain management – that are low-cost alternatives to many proprietary alternatives, which Carr says, as a result, are doomed to “economic obsolescence.”

The counter-argument to Carr’s hypothesis would say that while IT is certainly moving in the direction of an infrastructure utility, that there’s still a long, long way to go. It’s been suggested that IT is still undergoing a period of tremendous evolution. A whole lot of proprietary information technology and complexity still exists and many of today’s IT platforms and environments are anything but seamless. Much more work is needed. So how can IT be considered anywhere near technologically mature?

It’s a matter of function and utilization. Innovation may improve performance and application function, but the core elements – data storage, data process and data transport – have become widely available and affordable to everyone. Carr asserts that the buildout of the IT infrastructure is nearing completion and that means the power of IT as an infrastructure technology that transform industries continues to diminish.

Carr’s advice is pragmatic. IT overspending is among the greatest business risks. Rather than seeking to obtain strategic advantage through IT, business should instead focus on operational risks, looking to minimize the chance that IT might fail.