IT doesn’t matter

Although only 5 years old, the article “IT doesn’t matter” by Nicholas G. Carr is already a little classic. The author discusses the current and future role of IT within an enterprise and argues that the current strategic asset IT will soon become a commodity, like for example eletrical energy, which all companies have equal and virtually unlimited access to.

He draws the comparison to the buildout of railroadtracks in the 18th century. As long as only few companies had access to railroad tracks, they represented a valuable strategic advantage over competitors, which still used steamboats. But after the buildout was complete, everybody had access to it and railroads became a commodity. When IT was young, it also gave the managers that first understood it’s value and employed it in their companies, a radical advantage over customers. They therefore tried to exclude others from the use by employing proprietory technologies. But the buildout of the internet drove companies to the need of using more and more standardization to be able to communicate with others. This made it possible to be able to exchange soft- and hardware components more easily. Because of this and the increase of computing power by magnitudes while still being much cheaper, IT became ubiquitous. But it is scarce resources that make a strategic value, not ubiquitous ones to which everyone has virtually unlimited access.

IT being a commodity has some implications on managers. Their focus shifts to efficiency. Since everyone has equal access to IT, only the one with lowest cost has an advantage over the others. The other challenge for managers is to manage the risks that lie in IT. IT may be a commodity, but when it fails it has huge implications on every business, which can be seen similar to an electrical energy outage. Managers have to realize this and prepare for it.

Because of his controversial theses, Carr’s article was widely discussed and there are many people that disagree with him. Carr collected a huge number of responses on his homepage including critical ones.

Link to the article:
IT doesn’t matter (excerpt)

How we went digital without a strategy

During a research on wether a company needs a strategy or not to survive in the global market I came across this article in an issue of Harvard Business Review from October/September 2000. In this article Ricardo Semler, the CEO of the brazilian based company Semco, describes how his company runs already successfully for more than 20 years without having a strategy.
This article is rather interesting since you can find a lot of information on how to do and implement a business strategy and why it is good to have one, but very few article about why not to have one.

Link to the article:
How we went digital without a strategy (excerpt)

Additional links:
Semco website