If IT doesn't matter, what does? |
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By Bernard Golden, Contributor
18 Oct 2004 | SearchCIO.com |
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In Nicholas Carr's two-part series last week on SearchCIO.com [Carr is the author of Does IT Matter?], he depicted IT as an unimportant cog in the corporate machinery, a cost center to be targeted for minimal spend and median performance. His main point, hammered home endlessly, is that IT cannot provide a sustainable competitive advantage. Because of this, it should be treated like the motor pool -- no one spends a lot of time or attention there -- and IT should be an afterthought as well. It exists merely to carry out the strategic imperatives that a company pursues to gain "sustainable competitive advantage." In other words, it's the water boy supplying sustenance for the true stars of the team. But is Carr's assessment of the role of IT correct? Not by a long shot. Notwithstanding his impressive research and flawless prose, he gets a couple of key assumptions wrong, and thereby forms the wrong conclusions about the role of IT.
I'm running as hard as I can just to keep up with the pack
As an aging jock, I struggle to keep up with my peers in weekend races. I have to train constantly to stick with the median of my age group. None of us is capable of world-class performance, but it is a relentlessly competitive group. If I stop working out, my times will significantly deteriorate, and the pack will be a distant cloud of dust, far ahead of me.
This metaphor captures Carr's analysis of the IT situation. He assumes that because none of us, no matter how hard we work, can significantly outperform the rest of the group, it doesn't matter how well we do. Therefore, we shouldn't bother training hard because we're not world-beaters. But is this true?
We may not be ready for the Olympics, but we're still intensely competitive. And if we stop working out, we'll trail our peer group. From an IT perspective, this means that if we stop focusing on delivering great systems, we'll rapidly trail our competitors that do keep their focus. Just because our work can't keep us permanently ahead of the pack, doesn't mean it's unimportant. In fact, it's vital because it keeps us in the hunt for that "sustainable competitive advantage" that putatively can give us the permanent championship.
Careful, straw man walking
Boiled down, Carr's thesis is that IT isn't important because it doesn't deliver that all-important sustainable competitive advantage. Even if we do develop a system that moves us ahead of the pack, eventually they'll all have it and catch up to us. He gives an example of a computerized ordering system developed by a drug distributor. The system was widely used by pharmacies and made that distributor No. 1 in its field. After several years, the original system became outmoded because it was based on proprietary technology and did not use the most modern Internet protocols. All the pharmacies created their own ordering systems, so the first company no longer had the upper hand. So that system merely provided a transitory advantage -- not the important sustainable competitive advantage that we should all be focusing on.
Consequently, employers should look elsewhere for sustainable competitive advantage. Carr suggests they look in areas like service, unusual financing arrangements or unique sales techniques -- offerings that competitors cannot copy.
An example of a sustainable competitive advantage would be the powerful door-to-door sales organization Encyclopaedia Britannica used to dominate the market, by preparing children to conquer the world of knowledge. No one else in the industry could possibly match the powerful, streamlined sales force it deployed. Its dominance of the encyclopedia industry was guaranteed in perpetuity. Or was it? The Encyclopaedia Britannica sales system was made obsolete by the delivery of richer forms of reference knowledge on CDs. Their world-class sales force couldn't protect them forever -- it wasn't sustainable. And therein lies Carr's biggest mistaken assumption -- the straw man of sustainable competitive advantage.
There's no such thing as sustainable competitive advantage -- not in a competitive economy. Every innovation, no matter what type, can be copied, improved upon or outmoded by new developments. The fact that IT doesn't deliver a permanent lead doesn't make it unimportant. It merely makes it similar to all the other parts of the modern corporation -- all are key areas to focus on for improved performance.
IT: Part of the team, not the water boy
In the end, what does Carr's book really tell us? Just this: We need to seek ways to deliver great systems that support our firm's overall strategy. Carr's book really means that IT is one part of the corporation, a contributing player on a team of functional units -- a player with a key role that deserves respect, if not glory -- not relegated to the back of the room along with the motor pool.
Bernard Golden is CEO of Navica (www.navicasoft.com), a consulting firm providing open source strategy, implementation, and training services. Bernard is a recognized authority on open source and is the author of "Succeeding with Open Source" (Addison-Wesley, Aug. 2004).
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