MIS 510 – Information Resource Management

Assignment #2

12/23/2014

Journal Article Critique

IT Doesn’t Matter

Mohammad A. Al-Matar
G201307870

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 1.0. SUMMARY

N. G. Carr does not argue the importance of IT to commerce and commercial business.

However, he argues that IT will continue to have a profound influence on business on a

macroeconomic level. However, Carr is disputing that IT is considered by many to be

strategic to a business in the sense that it can provide a sustainable competitive advantage.

He argues that the affordability of IT have caused a mutation in its role from a strategic role

to another essential commodity.

Carr’s view rests on his contention that IT today is, in essence, an infrastructural technology

and not a proprietary technology. The latter, like an intellectual patent, provides a distinctive

competitive advantage to its owner. On the other hand, infrastructural technologies by their

nature offer far more value when shared by all than when used by a single player. In this

context, Carr compares the evolution of IT to earlier infrastructural technologies, such as

railroads, telegraphs and power generation. All such technologies started off as proprietary

in the initial phase of their build-out but, over time, became accessible to all, thus providing

value to all businesses and no special advantage to any one business.

The position Carr takes recognizes that while IT is more complex and malleable than earlier

infrastructural technologies, it still possesses all the traits that will ensure its commoditization

in the very near term. In particular, Carr views IT as a commodity because of the following

traits:

1) It is governed by an increasing number of standards to ensure connectivity and

interoperability.
2) It is by its very nature highly replicable and scalable.
3) Through the Internet, it has access to a perfect standardized delivery channel.

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 4) It is swiftly becoming ubiquitous due to the rapid price deflation, making it not only

powerful but also affordable.

Carr concludes his article with the suggestion that with the erosion of the strategic value

of IT, businesses should take a more defensive position with IT investments. He

recommends that companies manage costs and risks of IT more closely and exert less, if

any, time and effort pondering on the strategic value of IT. In short, spend less, follow but

do not lead, and focus on vulnerabilities and not opportunities.

2.0. REVIEW

Central to Carr’s hypothesis is that IT has started to display all the historical signs of an

infrastructural technology. A few decades ago, IT was a specialist function that was barely

understood in the executive suite. A few forward-looking enterprises gained prominence by

taking advantage of the underlying potential of IT. Carr cites a few well-known examples,

including American Hospital Supply and its automated order entering system in the late

1970s, and American Airlines and its first online travel reservation system. He maintains,

however, that the opportunity for these types of advantages is dwindling as IT begins to

reach the end of the build-out phase—much like the railroads and earlier infrastructural

technologies. He further predicts that, in the years ahead, most of the benefits of emerging

and new IT technologies will reach almost all businesses concurrently, as they did with the

faster and larger rail networks. In short, IT will lose its potential for strategic differentiation.

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 In fairness, whether one agrees with Carr or not, he does raise some valid issues:

1. Components of IT, particularly related to equipment, have been commodities for

some time. For instance, not much strategic analysis is required when buying a PC or

selecting an Internet service provider or even generic general-purpose applications

such as e-mail and word processing. On the contrary, cost and risk are the key

decision drivers.

2. There is also little to take issue with in his conclusion that cost minimization and risk

management should always be part of IT managers’ focus, particularly given the

scale and impact of IT on most businesses. This has been true in the past and will no

doubt remain so in the future.

3. His article is a salutary reminder that the drive to gain value from IT investments

should not be obscured behind business strategy or vendor hype. In particular,

business benefits from IT investments should be identified and realized as with any

other capital investment.

What is at issue is whether all of IT has become purely infrastructural and, therefore, has

lost its strategic significance. This conclusion has caused much consternation and confusion

in the executive suite.

3
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