IT Doesn’t Matter

by Nicholas G.Carr

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n 1968,

a young Intel engineer namedTed Hoff found a way to put the cir-cuits necessary for computer process-ing onto a tiny piece of silicon.His in- vention of the microprocessor spurred aseries of technological breakthroughs–desktop computers,local and wide areanetworks,enterprise software,and theInternet–that have transformed the business world.Today,no one would dis-pute that information technology has become the backbone of commerce.Itunderpins the operations of individualcompanies,ties together far-ﬂung sup-ply chains,and,increasingly,links busi-nesses to the customers they serve.Hardly a dollar or a euro changes handsanymore without the aid of computersystems.As IT’s power and presence have ex-panded,companies have come to view itas a resource ever more critical to theirsuccess,a fact clearly reﬂected in theirspending habits.In 1965,according to astudy by the U.S.Department of Com-merce’s Bureau of Economic Analysis,less than 5

of the capital expendituresof American companies went to infor-mation technology.After the introduc-tion of the personal computer in theearly 1980s,that percentage rose to 15

.By the early 1990s,it had reached morethan 30

,and by the end of the decadeit had hit nearly 50

.Even with the re-cent sluggishness in technology spend-ing,businesses around the world con-tinue to spend well over

2trillion a year on IT.But the veneration of IT goes muchdeeper than dollars.It is evident as wellin the shifting attitudes of top manag-ers.Twenty years ago,most executiveslooked down on computers as prole-tarian tools–gloriﬁed typewriters and

Doesn’tMatter

by NicholasG.Carr

As information technology’s power and ubiquity have grown,its strategic importance has diminished.Theway you approach IT investment and management willneed to change dramatically.

HBR AT LARGE