When Nick Carr’s article “IT doesn’t matter” appeared in Harvard Business Review in 2003 it caused a firestorm in technology businesses and the analyst community. The rest of the world didn’t notice. I well remember the Gartner Analyst community working together to draft a reply which I saw prior to submission and was published in a later magazine. Carr refers to it dismissively in the article I have linked to above, although his link to Gartner’s reply is broken.
As a minimal summary, Carr suggests that IT is like other infrastructural technologies which confer an advantage only until everyone can use them. He likens IT in this respect to railroads and electric power.
Looking at this with 10 years’ hindsight, I now think he’s right – but only to a point, and not necessarily for the right reasons!
In essence the argument is that democratisation of technology nullifies any competitive advantage to the user. I agree with this. To use the American expression, it’s simply table stakes. I’ve used a similar argument when discussing ERP or CRM. The best is now available at a per seat price for a start-up and therefore there is a greater challenge for an incumbent business that cannot utilise its hard won advantage from in-house systems, which in many cases are still on the balance sheet.
Increasingly, cloud systems mean there is no advantage to running an in-house datacentre. It can be done more efficiently, and therefore, in an ideal world, more cost effectively, at scale with the computing power bought in as needed. This will ultimately lead to software-defined datacentres – and to a disadvantage for people with their own.
In short much of IT is moving to infrastructure, publically available (although not for free).
But the interesting thing about IT is what you do with it – unlike a railroad which gets you, or your goods, from place A to place B. Although once created it is readily replicable, IT works in different ways and so speaks to different audiences. Look at smartphones – Android or iOS? It’s not a technology differentiator that matters, it’s the lifestyle associations that are being sold. There was a recent story in the press about Apple marketing on emotion; why that would make the papers I have no idea. This is true of so many things, technology related or not – cars being a prime example, where virtually identical boxes with a wheel at each corner are differentiated by marketing.
So the real differentiator in IT is the data the technology is processing. Private data (ie known “only” to your organisation in its entirety) can be processed in a manner that is public – it is the data that you need in these circumstances. Also, when either public data or private data is processed with a private algorithm, that too can give advantage.
Cross referencing this to the CIO Connect field of play shows that much of the data-processing that can give competitive advantage is happening in the upper right hand quadrant. And it’s about systems of interaction, not necessarily systems of record where competitive advantage can be gained currently. The prize remains connecting those two types of system. Such that, when I ask a colleague or customer on social media to meet me, my diary is updated automatically.
And finally… this is likely to be the last blog that Mark Samuels, our editor, edits for me. The thoughts are mine, as are the mistakes but the lucidity with which they are expressed owes much to Mark’s skillful edit which he carries out whilst retaining my voice in the piece. As Mark moves on to pastures new, my best wishes and those of the team are with him. He’ll be missed.