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Does IT Matter ?  IT and the Corrosion of Competitive Advantage (2004) - Nicholas G Carr Week 6 The Economic Impact of IT ...
Introduction <ul><li>IT : necessary for competitiveness but not sufficient for advantage </li></ul><ul><li>How we use tech...
Technological Transformations <ul><li>First Microprocessor - Ted Hoff at Intel in 1969 </li></ul><ul><li>Ethernet – Bob Me...
Technological Transformations <ul><li>Mind-set Shift </li></ul><ul><li>IT that is scarce = Competitive Advantage. </li></u...
Laying Tracks <ul><li>Rainhill Trials - 1830 </li></ul><ul><li>Access  </li></ul><ul><ul><ul><li>Proprietary Technology  <...
An almost perfect commodity <ul><li>Will IT become a commodity input ? </li></ul><ul><li>Commoditization of Hardware </li>...
An almost perfect commodity <ul><li>Commoditization of Software </li></ul><ul><ul><li>Can human intelligence ever be consi...
<ul><li>Software’s future </li></ul><ul><ul><li>Upgrade instead of buying a new package </li></ul></ul><ul><ul><li>Easier ...
Vanishing advantage <ul><ul><li>Study by Erik Brynjolffson and Lorin Hitt </li></ul></ul><ul><ul><li>Study by Baba Prasad ...
<ul><li>Locking in Advantage </li></ul><ul><ul><ul><li>American’s Sabre, AHS, Reuters </li></ul></ul></ul><ul><li>Technolo...
Universal Strategy Solvent <ul><li>Sustainable advantage </li></ul><ul><li>Leverageable advantage </li></ul><ul><li>A stra...
Managing the money pit <ul><li>Risks associated with resources </li></ul><ul><li>Low success rate of projects </li></ul><u...
Managing the money pit <ul><li>Work together to reduce risks </li></ul><ul><li>Invest on Security </li></ul><ul><ul><li>90...
A dream of wonderful machines <ul><li>IT is revolutionary – “ changes everything ” </li></ul><ul><li>Has IT been truly tra...
Nicholas G Carr <ul><li>Independent business writer, work centers on business strategy, IT and their intersection </li></u...
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Does IT Matter?

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Does IT Matter?

  1. 1. 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
  2. 2. Introduction <ul><li>IT : necessary for competitiveness but not sufficient for advantage </li></ul><ul><li>How we use technology is more important than the technology itself </li></ul>
  3. 3. Technological Transformations <ul><li>First Microprocessor - Ted Hoff at Intel in 1969 </li></ul><ul><li>Ethernet – Bob Metcalfe in 1973 </li></ul><ul><li>Word Processing System – Wang Labs in 1978 </li></ul><ul><li>TCP/IP – 1982 </li></ul><ul><li>Macintosh, laser printer – 1984 </li></ul><ul><li>E-Mail – 1989 </li></ul><ul><li>WWW – Tim Berners – Lee in 1990 </li></ul>- Inventions
  4. 4. Technological Transformations <ul><li>Mind-set Shift </li></ul><ul><li>IT that is scarce = Competitive Advantage. </li></ul><ul><ul><ul><li>How do we ensure it is kept that way ? </li></ul></ul></ul><ul><li>Differentiate commodity resources from those that have potential to create advantage </li></ul><ul><li>Risk mitigation and Cost cutting take precedence. </li></ul>
  5. 5. Laying Tracks <ul><li>Rainhill Trials - 1830 </li></ul><ul><li>Access </li></ul><ul><ul><ul><li>Proprietary Technology </li></ul></ul></ul><ul><ul><ul><li>Infrastructural Technology </li></ul></ul></ul><ul><ul><li>Foresight </li></ul></ul><ul><ul><ul><li>Risk in making the first move </li></ul></ul></ul><ul><ul><li>Advantages due to Infrastructural technologies will not be available indefinitely </li></ul></ul>
  6. 6. An almost perfect commodity <ul><li>Will IT become a commodity input ? </li></ul><ul><li>Commoditization of Hardware </li></ul><ul><ul><li>PCs, Servers, Storage systems and Networking devices are being standardized </li></ul></ul><ul><ul><li>Overshooting – to stay on the “cutting edge” </li></ul></ul><ul><ul><li>Grid </li></ul></ul>
  7. 7. An almost perfect commodity <ul><li>Commoditization of Software </li></ul><ul><ul><li>Can human intelligence ever be considered a commodity ? </li></ul></ul><ul><ul><li>Software : producing expensive, reproducing inexpensive. </li></ul></ul><ul><ul><li>Simple, Cheap, Standard and Networking </li></ul></ul><ul><ul><li>Parallel to machine tools </li></ul></ul>
  8. 8. <ul><li>Software’s future </li></ul><ul><ul><li>Upgrade instead of buying a new package </li></ul></ul><ul><ul><li>Easier programming languages </li></ul></ul><ul><ul><li>Modularity promotes commoditization. </li></ul></ul><ul><ul><li>Role of internet </li></ul></ul><ul><ul><li>Grid </li></ul></ul><ul><li>Architecture </li></ul><ul><ul><li>Diffusion of Wi-Fi made portable computers attractive </li></ul></ul>An almost perfect commodity
  9. 9. Vanishing advantage <ul><ul><li>Study by Erik Brynjolffson and Lorin Hitt </li></ul></ul><ul><ul><li>Study by Baba Prasad and Patrick Harker </li></ul></ul><ul><ul><li>When IT was new </li></ul></ul><ul><ul><ul><li>Earliest barrier was technical </li></ul></ul></ul><ul><ul><ul><li>Economic barrier </li></ul></ul></ul><ul><ul><ul><li>Access barrier : software </li></ul></ul></ul>
  10. 10. <ul><li>Locking in Advantage </li></ul><ul><ul><ul><li>American’s Sabre, AHS, Reuters </li></ul></ul></ul><ul><li>Technology Replication Cycle </li></ul><ul><ul><li>Being a first mover is expensive </li></ul></ul><ul><li>Homogenization of the processes </li></ul><ul><ul><li>The software influences the practice </li></ul></ul><ul><li>Installation, Deployment periods and Turning point </li></ul>Vanishing advantage
  11. 11. Universal Strategy Solvent <ul><li>Sustainable advantage </li></ul><ul><li>Leverageable advantage </li></ul><ul><li>A strategic challenge </li></ul><ul><ul><li>Two schools of thought </li></ul></ul><ul><li>Business Strategy </li></ul><ul><ul><li>Industry based view </li></ul></ul><ul><ul><li>Resource based view </li></ul></ul>
  12. 12. Managing the money pit <ul><li>Risks associated with resources </li></ul><ul><li>Low success rate of projects </li></ul><ul><li>Spend Less </li></ul><ul><li>Learn from others mistakes </li></ul><ul><li>No relationship between IT and business productivity </li></ul>
  13. 13. Managing the money pit <ul><li>Work together to reduce risks </li></ul><ul><li>Invest on Security </li></ul><ul><ul><li>90% of companies have unauthorized intrusions </li></ul></ul>
  14. 14. A dream of wonderful machines <ul><li>IT is revolutionary – “ changes everything ” </li></ul><ul><li>Has IT been truly transformative ? Have we changed much ? </li></ul><ul><li>Can we live without IT ? </li></ul><ul><li>Is a great depression in waiting ? </li></ul>
  15. 15. Nicholas G Carr <ul><li>Independent business writer, work centers on business strategy, IT and their intersection </li></ul><ul><li>Top editorial position at Harvard Business Review </li></ul><ul><li>B.A from Dartmouth College and M.A from Harvard University </li></ul><ul><li>www.nicholasgcarr.com </li></ul>
  16. 16. Thank You

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