Subject: RE: Where do we stand on "IT Doesn't matter?" From: "Dennis F. Galletta" Anurag and others, Recently, for MBA and executive MBA audiences, I've found that having a class discussion on Carr's article then the Computerworld interviews (July 7, 2003, with DeMarco, Strassman, Austin, & McAfee), and covering the Ives and Piccoli case on Lands' End makes for an interesting contrast. The link to Carr's web site conveniently leaves out some negative comments by Carr's colleagues in the July 7 article. DeMarco says "it's not a healthy debate" and Austin says "Carr is obsessed with the plumbing." If you read the (extremely thorough and thoughtful) teaching note, you can see an interesting and rich analysis of sustainability of competitive advantage that is obviously (and precariously) based on information and IT. It's ironic that what Carr's colleagues refers to as a superficial analysis costs $6-7 (the Harvard reprint) while the more careful case of Ives & Piccoli is free (to AIS members -- it's a CAIS article). Not only one of the very best and most interesting cases I've ever covered, it provides a powerful counterpoint to Carr. This one case alone is worth the AIS membership fee. Sorry I didn't restrict my comment to Anurag for his later summary, but I think too many of us don't know about the Lands' End case! References Carr, Nicholas, "IT Doesn't Matter," Harvard Business Review, May, 2003, Reprint IT R0305B, pp. 5-12 Ives, Blake and Piccoli, Gabriele, "Custom Made Apparel and Individualized Service at Lands' End," Communications of the Association for Information Systems, Vol. 11, 2003, pp. 79-93. DG ------Dennis F. Galletta Associate Prof. of Business Admin. Katz Graduate School of Business, University of Pittsburgh Pittsburgh, PA 15260 phone: 412-648-1699 fax: 412-648-1693 Internet: [email protected] http://www.pitt.edu/~galletta SMS e-mail (1 line to cell phone; NOT instant): [email protected] ------ -----Original Message----- From: Anurag Jain (FPM) [mailto:[email protected]] Sent: Monday, November 10, 2003 10:26 PM To: ISWORLD Information Systems World Network Subject: [isworld] Where do we stand on "IT Doesn't matter?" Dear ISWorld members: Just wanted to put forward my thoughts on the subject. Would be interested to know where we stand on this issue as IS researcher's community. ------ Subject: RE: Where do we stand on "IT Doesn't matter?" From: "William K. McHenry" Dear Colleagues, Along the same lines as Dennis Galletta, I paired the Carr article with another in my graduate MS/MBA MIS class. I used Weill, Subramani, Broadbent, "Building IT Infrastructure for Strategic Agility," Sloan Management Review, Fall 2002, Volume 44, Number 1, pp. 57-65. Carr just provided a theoretical and anecdotal justification for his arguments. Weill et al. is based on many years of careful research. In this article they talk about specific areas of infrastructure that were found to be significantly correlated with strategic advantage both at the centralized level and at the level of individual business units. Of course Carr is arguing about the future and Weill et al. is looking back to the recent past. Carr's message that costs absolutely have to be brought under control is very important, but his view of web services as a form of a commodity ignores the "intellectual" nature of IS technology (see Lee – one of many who have written about this), by which is simply meant that how any particular instantiation of what seems to be a commodity information system or component depends on the complex interaction of organization and technology. Carr seems to think that plugging into a business function is the same as plugging into electricity. A large body of our IS research would indicate that he is wrong. Ref: Lee, Allen, "Researching MIS," in Rethinking Management Information Systems, Currie, Wendy and Galliers, Bob, eds., Oxford University Press, 1999, 7-27. William McHenry Assoc. Prof. of Management, University of Akron, Akron OH Subject: Re: Where do we stand on "IT Doesn't matter?" From: "Manuel Mora" Dear colleagues of ISWorld: Since topic is quite relevant, I let me to express my opinion directly to the list about the recent inquiry posted by Anurag Jain: The topic is highly relevant and similar to "IT Productivity Paradox" posed in the 90's by R. Solow - nobel awarded economist- and well arguments challenged by studies from Brynjolfsson (92, 98). In this case, a general perception is could be that effectively IT -as technological artifact- is became a "commodity" but IT as a social- based artifact -e.g. how is socially perceived and deployed- it is far from be it. Large companies can be acquire the same IT -technological artifact- but its social/organizational utilization is could be contingent to several factors. In few words, organizations can buy IT artifacts but "organizational success from IT" cannot be acquired as a commodity. Consequently, if IT acquires a strategic or not attribute will rely on its organizational deployment. Sincerely, Eng. Dr. Manuel Mora Associate Professor Dept. of Information Systems Universidad Autonoma de Aguascalientes www.uaa.mx Dear ISWorld members: Its been a few months since the highly-debated subject titled article (http://www.nicholasgcarr.com/articles/matter.html) by Nicholas Carr appeared in HBR. But surprisingly, there has been no mention/debate on the same in the ISWorld list. Carr, HBR's editor-at-large, had captured the attention (http://harvardbusinessonline.hbsp.harvard.edu/b01/en/files/misc/Web_Letters .pdf) of the IT community worldwide with his article. For the right reasons, I guess. And, for saying the wrong thing(s), I am sure. As you can see on Carr's page and all over the web, CIOs, academicians, and others in IT profession have been reviewing the article critically. Coming to my own, very personal critique, I am not saying he's wrong just because I am from IS community. I am saying this because some of his text does not stand ground. As IS academicians, I think its imperative for us to join the debate. Not for the sake of debate, but to put the issue on record. Here's my opinion on the subject (I had written this at the time when the debate was on full-steam, but was waiting for some action on ISWorld on the subject.): By now, the whole world knows that Carr's thesis is that IT has become a commodity and hence it has stopped being important in a strategic way. Now, let us see what makes him say that. Major support for his whole argument is derived from parallels drawn with the earlier technologies in the history - railroads, electricity. He presents beaten-to-death growth figures of kilometers of railroad, megawatts of electricity, and hosts on internet. With all this, Carr seems to be implying (actually he's quite explicit) that IT is a mature technology today, and hence going the commodity way. Even Moore's law is mentioned to support the falling-costs-and-hence-commoditization theory. But he forgets to mention the Moore's IInd Law (http://www.imakenews.com/techreview/e_article000003598.cfm), which says that the cost of manufacturing chips (putting up plants for new fabrication technologies) is going up by a huge magnitude. And, in any case, if we are saying that we will stop at the current level of available processing power, then just wait till the next MIPS-hungry utility comes along. And this is not the vendor-speak kind of talk here: Jim Gray, Turing Award winning scientist says in "Ringing the death knell on tech's high-growth era" (http://www.iht.com/cgi-bin/generic.cgi?template=articleprint.tmplh&ArticleI d=95228), "I've seen the 'end' at least twice in my career - only to be surprised by the next wave. My guess is that this computer thing has just gotten started". Look around. People are already talking about non-silica processors, and even clockless silica chips. Hence, even though its a fact that IT is widely available today, there would be innovations in hardware and software, rocketing the pricing upwards that would make it more available to some firms than others. But does that matter for strategic advantage? According to HBR article, it (scarcity) does. And more importantly, 'only' this matters for competitive advantage. But as you will see in argument in following paragraph, its just not so. Its true in short-term only and that's where Carr's got it wrong: He has taken a myopic economics-only view of IT (investment, cost, return) and hence, the inevitable conclusions. Coming to the issue of IT becoming 'boring', even though IT might have become an 'infrastructural technology', the reason of strategic advantage to firms is not the availability of technology (or non-availability to competitors: 'scarcity' as the article says), but how firms put IT to use, a critical aspect of the whole startegic IT argument, and something that Carr mentions only in the passing! There will be another American Airlines, another American Hospital Supply reaping strategic benefits as long as they 'get IT right' and not by making sure that their competitiors don't have the same technology. In his Oct 1987 piece - "Infotech and Corporate Strategy", Prof Rosabeth Moss Kanter (HBS) classified the effects of IT into two categories: 1) Transaction efficiency (TE), and 2) Communication Control (CC). Futher, he said that "In the long run, the CC area will be the one in which the greatest strategic possibilities wil be found." Now, not by any reckoning has that 'long run' ended yet. In fact, it just got started. After putting enterprise-wide systems in place, firms are discovering that inter-organizational collaboration is becoming more and more important and increasingly the source of competitive advantage for all players in the supply chain. The point is that predicting demise of IT - a technology with high innovation and growth potential even today - as a differentiator by showing the growth charts similar to historical technologies is highly misleading. Taking the dotcom/investment bust of late 90s as the sign of maturing of technology is even more so. There are occasional blips in every technology's journey and what we are witnessing for last few years could sure be just that for IT, nothing more. Predicting too much on that basis alone combined with historical parallels, without taking into account the vibrancy, current developments, and innovations going on in the industry/technology, is quite a dangerous proposition and should be criticized. Just wanted to put forward my thoughts on the subject. Would be interested to know where we stand on this issue as IS researcher's community. Anurag Jain Doctoral Student, Information Systems G-214, Hostel Blocks Indian Institute of Management Bangalore Bannerghatta Road Bangalore 560076 INDIA Ph: +91-80-6993257, Mobile: +91-9886178995 Alternate mail: [email protected] The ISWorld LISTSERV is a service of the Association for Information Systems (http://www.aisnet.org). To unsubscribe, redirect, or change subscription options please go to http://lyris.isworld.org/. You are subscribed to isworld as: [email protected]. Each Sender assumes responsibility that his or her message conforms to the ISWorld LISTSERV policy and conditions of use available at http://lyris.isworld.org/isworldlist.htm. ------ Subject: Re: Where do we stand on "IT Doesn't matter?" From: "Deborah Lafky" I agree with Manuel. Carr is confusing an artifact with the use of the artifact. The competitive advantage conferred by IT lies not in the plumbing but in how that plumbing is exploited by the organization. To use Carr's metaphor, it's not the telephone itself that is important---it's how that telephone is used. The main competitive advantage that any organization has is smart people doing creative things. Expanding the toolkit doesn't change that. Nor does it change the importance of IS research as a contributor to human innovation. Deborah Lafky School of Information Science Claremont Graduate University Subject: Re: Where do we stand on "IT Doesn't matter?" (Why IT Doesn't Matter- and How IT Still Matters) From: Yogesh Malhotra Why IT Doesn't Matter and How IT Still Matters The interesting thread of arguments prompted my motivation to share my interaction with HBR that resulted in the attached article. This article explains 'Why IT Doesn't Matter' and 'How It Still Matters.' This apparent 'dialectic' expands on the prior points made in the discussion in this thread. Malhotra, Y., Integrating Knowledge Management Technologies in Organizational Business Processes: Getting Real Time Enterprises to Deliver Real Business Performance, Journal of Knowledge Management, Special Issue on Knowledge Management and Technology, Q4, 2004. (forthcoming). Web: http://www.kmnetwork.com/KnowledgeManagementRealTimeEnterpriseBusinessModel s.pdf [Motivated originally by an invitation to submit from an HBR Senior Editor, the original short version of this article was submitted to the HBR editorial board for review and later withdrawn by the author - five months before the publication date of Nick Carr's controversial HBR article 'IT Doesn't Matter.'] Yogesh Malhotra,PhD,MBA,BE,CCP,CEng Martin J. Whitman School of Management, Suite 419 Syracuse University, Syracuse, NY 13244-2130 e-mail: [email protected], phone: (315) 443-3571 fax: (315) 443-5457 http://www.som.syr.edu/facstaff/yogesh/ Subject: IT Doesn't Matter (or Does It?) From: "Bhattacherjee, Anol" Carr's (2003) HBR article "IT Doesn't Matter" claims that information technologies (IT) has become a commodity, much like electricity and transportation, by virtue of its ubiquity, and thereby has lost much of its purported strategic value. Accordingly, the author suggests that businesses should take a three-pronged approach toward avoiding IT over-investment: (1) spend less, explore cheaper alternatives, and eliminate waste; (2) delay IT investments to lower IT adoption risks, (3) use IT to minimize disruptions, not deploy in radically different ways. Carr's argument is not inconsistent with the observations that: (1) more and more businesses are employing outsourcing as a way of reducing their IT expenses, and (2) IT-based strategic differentiation (as envisaged by many e-commerce businesses) has been ephemeral at best. This argument is also consistent with the contemporary academic view that IT is today more of a competitive necessity than one of competitive advantage, and with the resource-based argument that IT-based strategic advantages are only short-lived, until imitated or substituted by a competitor. It is important to note that Carr is not claiming that IT has no business value. He also does not claim that businesses should shun all their IT investments, just like they should not stop using electricity or transportation. Indeed, he says, "an IT disruption can prove equally paralyzing to your company's ability to make products, deliver services, and satisfy customers", and 'a brief lapse in supply can be devastating." Instead, he suggests that the quest for IT-based strategic advantage is fundamentally misguided. Though the title of Carr's article seems to portray that IT investments in firms have no value at all, the essence of his argument is that IT investments have no "strategic" value. The title, presumably worded to grab attention and provoke debate (and successful at that :-), therefore is a little misleading. Over time, many readers will only tend to remember the title instead of the embedded argument. Hence, the article can be dangerous if business managers take Carr's title literally and shut down the IT products and services required for their very survival. For academics, however, Carr's article provides an opportunity for us to introspect and reexamine several of our current assumptions and lines of IS research. For instance, the strategic IS planning literature may interpret Carr's article to focus less on the design or implementation of strategic IT systems and more on strategic utilization of data (e.g., business intelligence) generated from IT systems. Doing so can shift the focus of IT research from IT systems to data stored in those systems. Constructs such as system quality and technology usefulness may have to be modified to data quality and data usefulness respectively. Likewise, Carr's article also has interesting implications for revisiting IS pedagogy. For instance, IT-enabled value-creation may focus less on its elusive revenue-generating potential and more on its cost-reduction potential (e.g., via automation, streamlining operations, etc.). I would welcome an open, informed debate on the potential impacts of the emerging utility view of computing on today's IS research and pedagogy. Anol Bhattacherjee, Ph.D Associate Professor, ISDS Department College of Business Administration University of South Florida 4202 E. Fowler Ave, CIS 1040 Tampa, FL 33620-7800 Email: [email protected] Phone: 813-974-6760 Web page: http://www.coba.usf.edu/abhatt/
Subject: RE: Where Do We Stand On "IT Doesn't Matter
