1. Does IT Matter?
Nicholas G. Carr

2. IT is essential to business
Ubiquitous
Integral to modern business processes
Dominant capital expense for most companies
Prerequisite to survival
Can, in right circumstances, boost productivity
. . . but is it essential to business strategy?

3. Two types of technology
Proprietary:
can be owned, actually or effectively, by a single firm
e.g., patents, secrets, exclusive licenses
Infrastructural:
is shared broadly by all firms in an industry or region
e.g., rail, telegraph, telephone, electricity, IT

4. Evolution of infrastructural technology
Advantage potential
Ubiquity
Time
Proprietary advantages
Weak advantages
Diminishing advantages

5. Isn’t IT different? “General purpose” technology
Not just hardware – software, too
Malleable and flexible
Endless innovation potential

6. Hardware commoditization
PCs
Servers
Storage
Network
“Overshooting”

7. Software commoditization
Extreme economies of scale in production
lead to
Sharing & “vendorization”
Overshooting (“good enough”) & declining returns
Homogenization & commoditization
Now: open source, offshoring, utility service

8. Vanishing advantage
Distinctive systems once provided competitive barriers:
Access: American’s Sabre
Closed network: AHS’s ASAP
Foresight: Reuters’ Monitor
But barriers have rapidly eroded as accessibility, affordability, and standardization have increased

9. New imperatives Spend less Follow, don’t lead
Innovate when risks are low
Focus more on vulnerabilities than opportunities

10. A worthy goal for CIOs?
IT will come to “be thought of more like electricity or the telephone network than as a decisive source of organizational advantage. In this world, a company trumpeting the appointment of a new chief information officer will seem as anachronistic as a company today naming a new vice president for water and gas. People like me will have succeeded when we have worked ourselves out of our jobs. Only then will our organizations be capable of embracing the true promise of information technology.”
- Max Hopper, 1990