Does IT Matter?

Does IT Matter ? IT and the Corrosion of Competitive Advantage (2004) - Nicholas G Carr Week 6 The Economic Impact of IT II : Beyond the Productivity Paradox

Introduction
IT : necessary for competitiveness but not sufficient for advantage
How we use technology is more important than the technology itself

Technological Transformations
First Microprocessor - Ted Hoff at Intel in 1969
Ethernet – Bob Metcalfe in 1973
Word Processing System – Wang Labs in 1978
TCP/IP – 1982
Macintosh, laser printer – 1984
E-Mail – 1989
WWW – Tim Berners – Lee in 1990
- Inventions

Technological Transformations
Mind-set Shift
IT that is scarce = Competitive Advantage.
How do we ensure it is kept that way ?
Differentiate commodity resources from those that have potential to create advantage
Risk mitigation and Cost cutting take precedence.

Laying Tracks
Rainhill Trials - 1830
Access
Proprietary Technology
Infrastructural Technology
Foresight
Risk in making the first move
Advantages due to Infrastructural technologies will not be available indefinitely

An almost perfect commodity
Will IT become a commodity input ?
Commoditization of Hardware
PCs, Servers, Storage systems and Networking devices are being standardized
Overshooting – to stay on the “cutting edge”
Grid

Commoditization of Software
Can human intelligence ever be considered a commodity ?
Software : producing expensive, reproducing inexpensive.
Simple, Cheap, Standard and Networking
Parallel to machine tools

Software’s future
Upgrade instead of buying a new package
Easier programming languages
Modularity promotes commoditization.
Role of internet
Grid
Architecture
Diffusion of Wi-Fi made portable computers attractive

Vanishing advantage
Study by Erik Brynjolffson and Lorin Hitt
Study by Baba Prasad and Patrick Harker
When IT was new
Earliest barrier was technical
Economic barrier
Access barrier : software

Locking in Advantage
American’s Sabre, AHS, Reuters
Technology Replication Cycle
Being a first mover is expensive
Homogenization of the processes
The software influences the practice
Installation, Deployment periods and Turning point
Vanishing advantage

Universal Strategy Solvent
Sustainable advantage
Leverageable advantage
A strategic challenge
Two schools of thought
Business Strategy
Industry based view
Resource based view

Managing the money pit
Risks associated with resources
Low success rate of projects
Spend Less
Learn from others mistakes
No relationship between IT and business productivity

Managing the money pit
Work together to reduce risks
Invest on Security
90% of companies have unauthorized intrusions

A dream of wonderful machines
IT is revolutionary – “ changes everything ”
Has IT been truly transformative ? Have we changed much ?
Can we live without IT ?
Is a great depression in waiting ?

Nicholas G Carr
Independent business writer, work centers on business strategy, IT and their intersection
Top editorial position at Harvard Business Review
B.A from Dartmouth College and M.A from Harvard University
www.nicholasgcarr.com

Thank You

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Does IT Matter?

by llabhilash on Sep 17, 2008

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Does IT Matter? — Presentation Transcript