Electricity, the telephone, the steam engine, the telegraph, the railroad and
..IT? In his HBR article, "IT Doesn't Matter," Nicholas Carr has stirred up quite a bit of controversy around IT's role as strategic business differentiator. He examines the evolution of IT and argues that it follows a pattern very similar to that of earlier technologies like railroads and electricity. At the beginning of their evolution, these technologies provided opportunities for competitive advantage. However, as they become more and more available as they become ubiquitous they transform into "commodity inputs," and lose their strategic differentiation capabilities. From a strategic viewpoint, they essentially become "invisible."
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He also postulates that as for "IT spurred industry transformations, most of the ones that are going to happen have likely already happened or are in the process of happening." Although industry and markets will continue to evolve and some will still undergo fundamental changes, Carr suggests that the buildout of IT is "much closer to its end than its beginning." To support his position, Carr states that: IT's power is outstripping most of the business needs it fulfills; the price of essential IT functionality has dropped to the point that anyone can afford it; the capacity of the delivery mechanism, the Internet, has caught up with demand; IT companies are positioning themselves as commodity suppliers and even utilities; and finally, the investment bubble has burst, which is historically a "clear indication that an infrastructural technology is reaching the end of its buildout."
So, if Carr is correct, what can an IT manager do? Carr suggests that companies need to shift their thinking around IT and focus on the "new rules for IT management," which are:
Spend less. It is becoming harder to leverage IT as a competitive advantage, but is getting easier to put business at a cost disadvantage; therefore, as the commoditization of IT continues, the "penalties for wasteful spending will only grow larger."
Follow, don't lead: As IT capabilities become more homogenized,