In the article, “IT doesn’t matter” Nicholas Carr discusses the role of Information Technology (IT) in a business context. The invention of the microprocessor caused further technological developments, which started the buildout process. As a result, the investment in IT had increased significantly, making it more affordable and reproducible. In the initial phase of its exploitation, it was a proprietary technology controlled by one company, American Hospital Supply (AHS).
Consequently, the IT sphere followed the pattern of major technologies such as steam engines, gradually gaining the qualities of a commodity and losing the strategic value at the same time. When IT turned to be widely recognized, it became an infrastructural technology. As IT continued to be commoditized, the competitive advantage was disappearing, while firms still focused on excessive expenditure. Thus, the author ascribes them to pay attention to the risks involved with IT utilization since it grew into one of the competitive factors.
Throughout the article, the author demonstrates his knowledge on the historical background of various technologies. By making a rational comparison of IT to rail transport, Carr indicates similar trends, attempting to predict the future of the former industry. He states that railroads altered “the structure of American industry,” building a link to IT’s a primary breakthrough in the entire business infrastructure (Carr, 2003). Moreover, electrical power is another example of a technology giant, providing statistical data on the skyrocketed use of central stations (Carr, 2003). Next, Carr (2003) elaborates on to the commoditization of IT, providing diagrams illustrating how the exploitation of railway, electric power, and IT has risen over time.
The authoe highlights the parallel between these technologies to persuade readers that IT is expected to become another commodity. In order to convince that substantial spending on IT equipment does not boost profit levels, Carr (2003) refers to a study conducted by Alinean. The firm cooperated with a number of companies which managed to succee without considerable IT expenditures. Therefore, the adequate numerical pieces of evidence and references to past experiences strengthen the article’s point.
The proprietary nature of IT is one of the main focus points of the article. It is exemplified by the provision of a real case of AHS when a company was one of the earliest adopters of IT by creating “Analytic Systems Automated Purchasing” (Carr, 2003). AHS’s exclusiveness in ordering products via computer gave it a competitive advantage. Hence, the author emphasizes the importance of better understanding how the new technologies may be applied before the buildout commences.
He focuses on the brief moment when IT is not standardized and vastly acknowledged. However, Carr (2003) does not exclude an opportunity of gaining advantages through innovation evidenced on the example of such firms as American Airlines, Federal Express, and Mobil Oil. He points out that a creative approach can form benefits vital to surviving in fierce competition. Therefore, it can be noted that the author explains the complex side of IT adaptation by reflecting real-life instances.
The final part of the article is dedicated to the real actions firms can take as IT turns into a business necessity. Carr (2003) uses some practical views on preventing companies from over-expenditure on IT appliances. He strongly suggests concentrating on the hazards behind the blind IT exploitation. Therefore, the author’s concern is not a baseless statement since he has already provided the appropriate statistics. In particular, he tries to convince firms to pay attention to the security of data storage. Such a short-term solution gives a solid impression that Carr’s arguments are valid, and the issue must be taken into account.
Furthermore, he offers the long-term initiative, which comprises of cutting on IT investment as its returns do not justify high expenses. The author proceeds to persuade by stating that most employees use basic computer applications, which do not need costly upgrades. Additionally, he expresses an opinion on IT vendors and their tactics to attract customers to buy wasteful products. Hence, Carr does not just indicate problems but also gives feasible remedies.
Although the article presents some credible and convincing arguments, it also contains some weaknesses. Carr observed that most of the data warehouse is cluttered with needless information. However, companies gather data on their employees to evaluate their performance, which contributes to better management and understanding of workers’ capabilities. Furthermore, such data contains materials related to clients’ activities on the website, thus dealing with invaluable personal evidence used in the marketing of the products.
Next, there is a supplier base associated with the critical knowledge on the production process. Thereby, the aggregate amount of data must be stored and secured from competitors, excusing some costs associated with IT. In addition, the focus on current trends must remain one of the firm’s aims. The author claims that it is not essential to “being stingy with IT dollars” (Carr, 2003). Nevertheless, consumer tastes and preferences change speedily, and any lag can make customers find a substitute. Thus, Carr does not examine the detrimental impact of proper data storage and recognizes the relevance of ever-changing patterns.
It can be noted that IT is part of the business strategy as it assists in product differentiation. Taking Microsoft as an example, the company used innovation and creative thinking as a way to distinguish products. Moreover, before IT became affordable and widely accessible, Microsoft laid a foundation for its competitive advantage, building brand image and customer loyalty. Therefore, the company was able to apply the new technology, which is the Internet, becoming one of the leading corporations in the world.
On the other hand, IT plays a role in social strategies as being the core of innovation and modernization. Additionally, it is the information resource where a data warehouse is an asset exploited by firms. Nonetheless, IT is also a component of capabilities, helping in designing, advancing, and functioning information systems (IS). Thus, it serves as the business and social strategy, contributing to IS’s assets and capabilities.
According to Porter’s value chain model, competition arises from product differentiation and lower cost of production. IT provides both opportunities as technologies allow to reduce expenses by replacing human workers with machines and computers. Despite the initial capital expenditure on IT, in the long-run, it creates higher returns and profits. Meanwhile, it can add to the value of goods by improving their quality, style, special features, or better performance characteristics. In other words, IT contributes to product superiority over the rivals’ ones, boosting revenue levels. Thereby, IT serves as one of the factors facilitating rivalry in the industries.
In conclusion, Nicholas Carr’s article provides an insight into the IT topic, expressing concern over the senseless utilization of it by businesses. The author emphasized the importance of considering the risk and potential damage firms can suffer from it. By highlighting that IT is in the process of turning into a commodity, Carr convinces firms to cut costs related to technological upgrades. However, the author neglects the importance of data storage and the essential IT expenses.
Reference
Carr, N. G. (2003). IT doesn’t matter. Harvard Business Review, 81(5), 41-49.