Nicholas Carr It Doesn T Matter Summary

Introduction In May 2003, the Harvard Business Review published an article by Nicholas Carr entitled "IT Doesn't Matter," an article whose impact still lingers today. According to a study performed by the U.S. Department of Commerce, by the year 2000, almost half of capital spending by companies was devoted to information technology, for a worldwide total of two trillion dollars a year. Carr argues that this focus on information technology (IT) is misplaced, that IT is similar to a utility, and that its strategic value has dwindled. He claims that IT spending can be "discretionary, unnecessary, or even counterproductive," resulting in great wastes for companies. Carr does make some good points: parts of IT do operate in a similar way to

At its core, IT is a "transport mechanism - it carries digital information just as railroads carry goods and power grids carry electricity" (Carr, 44). Railroads and power grids carry the most value when they are broadly used and implemented; technology too benefits the most when usage is widespread. Secondly, technology is highly replicable; unlike other goods, whose costs derive from their cost of production, lots of technology is costly to develop, but nearly cost-free to duplicate. Many companies are now positioning themselves as utility providers, requiring that users subscribe to a service instead of purchasing a product. Microsoft Office software is a prime example of this, but many other companies have jumped on this bandwagon as well. Finally, like other infrastructural technology, its broad use and price have had an inverse relationship. While one expands at an astounding rate, the other declines rapidly. All these similarities point to IT not as proprietary technology, but as infrastructural

Instead of viewing IT as a way to gain competitive advantage, they need to view technology as a requirement of running a business. Carr equates it with a resource "essential to competition, but inconsequential to strategy" (Carr, 48), electricity. It's something that isn't essential to a cooperation's business strategy; nevertheless, "even a brief lapse in supply can be devastating" (Carr, 48). Similarly, a shut-down in IT can be disastrous for a company, but this does not mean that it is a core part of its business strategy. Inevitably, there will be significant spending in order to keep IT systems running smoothly, but managers must make a distinction between what spending is necessary and what is superfluous or even detrimental. Smart management of capital spending would include delaying purchases of new technology until prices drop and bugs are worked out, reducing the frequency of IT upgrades, openness to partnerships and open-source applications. Companies are advised against "aggressively seeking an edge through IT" and instead "manage IT's costs and risks with a frugal and pragmatic eye" (Carr, 1). IT is no longer a cutting edge tool, but something that just needs to run smoothly so that the business can