IT doesn't matter

As information technology has grown in power and ubiquity, companies have come to view it as more critical to their success. In consequence of spending of IT has increased dramatically over the years and is still tremendous in spite of the current economic situation.

Besides IT tools are no longer considered for low-level employees, but are used intensively by top managers who openly value the supposed competitive edge that they can derive from its usage.

The author claimed that “but scarcity, not ubiquity”, makes a business resource truly strategic and allows companies to use it for a sustained competitive advantage.  Also Carr said that IT has become the latest item in a list of commodities that helped shape business. Being a commodity, IT also becomes transparent to its users.

Proprietary technologies may generate a competitive advantage to their owners provided adequate protection of their investors' rights. Conversely, infrastructural technologies are more productive when they are shared, although owning them may prove more cost-effective at the beginning of their existence. Once standards are in place, that type of infrastructural technologies is more effective when shared.

For a brief time, IT technologies created powerful opportunities for forward-looking companies. But as their availability increased and their costs decreased, they became commodity inputs. From a strategic standpoint, they no longer mattered. That's exactly what's happening to IT, and the implications are profound.

Also, one of the major pitfalls that managers fall into is the belief that competitive advantages brought by infrastructural innovations will last forever. At the end of the buildout phase of a new infrastructural technology, new standards will emerge, competition will rise dramatically and prices will fall. Even the usage of the new technology will become standardized. Therefore, the advantage of infrastructural technologies will shift from the micro to the macro-economical level for when they become pervasive, only countries and regions benefit from their presence, whereas individual companies are all competing on the same level.

Throughout the buildout of the IT infrastructure, a myriad of companies have been able to derive significant competitive advantages from IT. Some have been able to establish a durable competitive edge (e.g. Dell Computers, Wal-Mart) whereas others have only been able to generate a temporary advantage. But the ability to generate a competitive advantage from IT is becoming very rare nowadays, as is always the case with infrastructural technologies according to Carr.

 

Opinion

Carr took completely opposite stand in the business value of IT we used to secure competitive advantage through significant IT investment. So far, many IT-related scholars and consultants emphasized that IT investments are more aggressive than competitors and securing first mover’s advantage by introducing new technology. However Carr argued that IT became commoditization, therefore IT no longer mattered.

But Carr’s opinion, “IT doesn’t matter” is mistake from he regarded IT itself in the same light as complementary assets (Information System). Because IT itself is gradually commoditization, therefore is not scare. However IT complementary assets are still scare and IT still treats having competitive advantage when companies need to integrate system and to expand their business to global.

In conclusion, IT technical aspects of excess offer can hinder a productivity of company activity and be negatively influenced. But, if we show differentiation at using of IT through complementary asset then it will contribute to improve strategic advantage

 

Does IT Matter?

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