This paper discusses the points made by Nicholas Carr in his article IT Doesn’t Matter and assesses the relevance of his propositions in the corporate and technological world, as well as their implications in the companies’ bottom line. This paper also discusses the arguments made by Carr’s critics as well as by his proponents. Finally, the author of this paper provides his conclusions and opinions on the topic and the issues presented.
Statement and Relevance of the Topic
In his article IT Doesn’t Matter, Nicholas Carr (2007) posits that while IT is undeniably crucial in maintaining and ensuring business operations, its ubiquity and affordability has essentially commoditized it in that it no longer adds strategic value to businesses, that is, it can no longer in itself provide businesses with a competitive edge.
This has sparked a lot of debate and controversy in both the business and computer worlds, as it gave business managers and executives, as well as IT vendors, a reason to reconsider how they manage and utilize their IT infrastructures. They must now rethink how they use IT so that it enables them to gain a competitive advantage.
Key Issues of the Topic
Carr (2007) points out that the increasing commoditization of IT is due to the fact that it becomes more valuable as it is shared and is therefore not a scarce resource. It is also very easy to replicate and its capabilities have been homogenized, especially with the emergence of generic applications. As well, its cost continues to decrease such that almost everyone can now afford to avail of its advanced capabilities.
With IT being a resource that has become more important in competition than in strategy, Carr (2007) suggests that businesses pay more attention to the risks that their IT infrastructures can be exposed to instead of on the advantages that they can bring. As IT in itself can no longer be used as a means for differentiation, the most important thing that companies can do is to manage these risks, as failure to manage them can result in the disruption of business operations, which in turn can mar the company’s reputation. Moreover, companies should be able to manage their IT costs effectively so that wastage is prevented, that is, that they don’t invest in IT infrastructure that will soon become obsolete or whose full capacity is not utilized or required.
Application of the Course Concepts to the Topic
The course focuses mostly on information systems and how they can transform businesses and enable them to compete in a global market (Laudon & Laudon, 2012). However, the course material, and particularly the book by Laudon & Laudon (2012) goes beyond the discussion of information systems per se and focuses more on how information systems can be effectively used through an understanding of the organization, management, and information technology that make up the system. Information systems are generic in that they come prepackaged with generic features and functions. However, as Carr (2007) asserts, such generic applications can become truly valuable only if the resources surrounding them are also managed well.
Research on the Topic
Carr’s (2007) article did cause a stir among many technology and business experts where their common reactions were on the defensive side. For example, Choudhary (2004) refutes Carr’s (2007) claim that Walmart delays its investments on IT until the standards and best practices have become stable. To prove his point, Choudhary (2004) cites that Walmart was among the pioneers of RFID tags at a time when such technology was still not fully developed. In the same regard, Marks (2008) proposes that IT does matter and that it can be used to gain a strategic advantage, particularly in the E&P industry, although he concedes that IT merely consists of tools that makes things possible and that these tools can be effectively used to gain strategic advantage only if the fundamentals – such as technical computing strategy and business leadership -- are embraced and adopted. Similarly, Smith (2004) asserts that not only does IT matter, but that IT is competitive advantage because it is integral to all products and services, particularly in their creation and delivery, in their design and innovation, in cost reduction, and in the time to market. As well, Metcalfe (2004) asserts that IT does matter and that the companies that invest wisely in IT experience a greater and faster increase in revenue than companies that invest very little in IT or not at all.
On the other hand, DeMillo (2012) asserts that IT doesn’t matter, particularly in higher education where there is a surge in IT investments. He proposes that “without a fundamental change in the business of higher education, technology doesn’t matter” (DeMillo, 2012). On the same note, Wybolt (n.d.) suggests that rather than debate over the details of Carr’s propositions, everyone should just agree with Carr’s underlying message, which is that “companies need to get better about managing IT in order to minimize business disruption and reduce the total cost of ownership by improving the fidelity of IT purchasing decisions” (Wybolt, n.d., p. 1).
This paper reviewed the points made by Carr about how IT has been commoditized and, in effect, no longer matters. He asserts that rather than using IT to gain a competitive advantage, business leaders should focus on managing the risks that IT infrastructures can be exposed to and the costs incurred from investing in them. It can be said that there are more critics than proponents to his claims. However, the writer thinks that his critics are being too defensive and are taking his propositions very literally. Although the writer does not believe that IT doesn’t matter in the literal sense, he agrees with Carr and his proponents that the central message in Carr’s assertions is that businesses should pay closer attention to how they manage and utilize their IT resources in order to ensure that their strategic objectives are achieved.
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Marks, L. (2008, December). IT doesn’t matter – Or does it? Journal of Petroleum and
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