Nicholas Carr’s IT Doesn’t Matter

March 5, 2008

Full Credit to Mr Nicholas Carr and his influential “IT Doesn’t Matter” for the title of this.

A March CIO Insight article with Jim Champy, co-author with Michael Hammer of the excellent 1994 book Re-Engineering the Corporation, probably the second most mis-used and and misunderstood book in modern business history. (but that is another story.)

The author asks;

What from your research makes you disagree with Nicholas Carr’s thesis that most IT isn’t strategic and will increasingly become a commodity?

Champy: If I went to the founders of the companies in my new book and said, “IT doesn’t matter,” they’d say: “What? Look at how central IT is to my business, and look at how it allows me to invent a wholly new business model, and how it allows me to operate and change some of the fundamentals of my industry.” The dangerous extension of that argument is that an executive or manager doesn’t have to pay attention to it.

But then in the same article, Mr. Champy also states;

One young entrepreneur I interviewed said, “The Internet is the level playing ground for entrepreneurs in their 20s. We use the Internet as well as an established business uses the Internet. It’s the great leveler. Someone who’s been in the business for 50 years doesn’t know more about how to use the Internet than I know.”

The Argument

Here is why I believe that this is significant. I have not (yet) seen a rebuttal of Mr. Carr’s thesis that IT Doesn’t Matter that does not basically state “look how ABC Corporation and XYZ Inc. are using IT for this advantage, or that growth rate”

But, the questions not asked are;

1) Are ABC and XYZ’ corporations competitors using technology as well?

2) If the answer to number 1 is yes, are ABC and XYZ just managing it better?

Table Stakes

One of the precepts of Mr. Carr’s article, is that once something reaches commodity stage, it becomes poker table stakes, just like electricity. And that in, and of itself, a commodity is not going to provide any business with a competitive advantage.

Regarding the questions listed above, I would bet that unless they are still using mimeographs and ‘Blue Line’ books, those competitors are also using IT in their business. As the second quotation states, the Internet, and IT in general, is a great leveler. We could state that the Internet and IT is indeed the leveling table stakes to the modern business poker game.

However, just like those table stakes in poker, the Internet and IT only gets you a seat at the table. It does not imply whether you will win the jackpot or lose your shirt. Table stakes may get you into the game, but it is how you play it that will drive any competitive advantage. As Mr. Carr wrote, how you manage that IT investment can generate an advantage.

We all have access to these table stakes, the Internet and technology can make a small business just as competitive as a large one – but only if you manage it properly. And because it must be managed properly, I fully agree with Mr. Champy that the risk of pushing IT down the organization where no one pays attention to it is dangerous. Because the management and stewardship of this must be a senior level priority and top of mind. Because how you manage those table stakes will be how you hit the jackpot or lose your shirt.

UPDATE: For an SME thought exercise on this subject, there is a new post here.

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2 Responses to “Nicholas Carr’s IT Doesn’t Matter”

  1. elliotross Says:

    Now THAT is funny 🙂

  2. Cody Ross Says:

    Gripping, I passed this on to a crony of mine, and he actually bought me lunch because I found this for him, so let me rephrase: Thanks for lunch.

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