Discounting IT's past while writing off its future

Does IT Matter?
Information Technology and the Corrosion of Competitive Advantage
by Nicholas G. Carr,
Harvard Business School Press, 147 pages, $26.95.

For decades, businesses have been enticed by the lure of competitive advantage and strategic importance into spending billions of dollars on information technology. ''Does IT Matter?" examines whether this lure has been merely an overture to empty promises.

In this book, based on an article in the Harvard Business Review in May 2003, Nicholas Carr, a former HBR executive editor, discounts the strategic and competitive importance of IT in the past and writes off its importance in both areas in the present.

While admitting information technology may have delivered great benefits to a handful of companies -- in some cases even lifting a few of them into leadership positions in their industries -- for most businesses, he writes, IT ''has been a source more of frustration and disappointment than glory."

''It has allowed many companies to substantially cut their labor costs and working capital," he notes, ''but it has also led managers to plow cash into risky and misguided initiatives, sometimes with catastrophic results."

If Carr's historic analysis of IT's worth isn't enough to send shivers down a technologist's spine, his evaluation of the current and future states of IT surely will. ''IT's strategic importance is not growing, as many have claimed or assumed, but diminishing," he writes. ''As IT has become more powerful, more standardized, and more affordable, it has been transformed from a proprietary technology that companies can use to gain an edge over their rivals into an infrastructural technology that is shared by all competitors."

''Information technology," he continues, ''has increasingly become, in other words, a simple factor of production -- a commodity input that is necessary for competitiveness but insufficient for advantage."

In this slim volume, Carr shows that he is an iconoclast unafraid of attacking some of the fictions surrounding the nature of IT. One is that the IT industry will never mature and, like the Rolling Stones, rock and roll forever.

''The sense of perpetual youth is an appropriate, perhaps even necessary, myth for a business powered by restless entrepreneurship and relentless competition," he writes. ''But it is just a myth."

Not only has IT matured, it has already reached geezerdom, Carr maintains. The signs include the power of IT outstripping most of the business needs it fulfills; the price of essential IT functionality dropping to where it is affordable for almost everyone; the capacity of the universal distribution network (the Internet) catching up with demand; major IT vendors acting like utilities to provide on-demand infrastructural services; and the expansion and bursting of an enormous investment bubble -- a historic indicator of build-out's curtain call.

In the future, Carr contends, successful companies won't be the ones that push the envelope on innovation, but those that plan their IT strategy pragmatically and execute it competently. He offers four rules for successfully managing IT in the coming age: spend less on it; be a follower, not a leader; innovate only when risks are low; and focus on vulnerabilities, not opportunities.

Carr slams a number of industry myths in his book, including the one about the superiority of the Information Age over its predecessors. Compared to the cataclysmic changes in society and business brought about by new technologies at the turn of the 19th century, those of the late 20th century seem modest, he contends.

''Ask yourself which you'd rather do without: Your computer or your toilet? Your Internet connection or your light bulbs?"

''Does IT Matter?" engages the imagination and the emotions, a rare combination in a business book.

John P. Mello Jr. is a freelance writer. He can be reached at jpmello@cox.net.