Nick Carr's Incisive Article Analysis

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A gist of Nick Carr’s incisive article
In his 2003 article ‘IT Doesn’t Matter’, Nicholas Carr charts the evolution of Information Technology from the invention of the microprocessor in 1968 to present day omnipresence of IT solutions. His bone of contention with IT is not concerned with its widespread presence, but the magnified costs involved in the upkeep of IT infrastructure. He wants to bulldoze the myth that increased IT spending will culminate in higher returns and better profits. Acknowledging that though “Information technology has become the backbone of commerce” (Carr, 2003), he notes that its omnipresence works against its strategic advantage.
His proposition is that a resource can be considered as a strategic advantage only when a company has a differentiating resource compared to its competitors. With this proposition he confirms the Resource-Advantage theory laid out in 2002 by Hunt and Morgan. The accessibility and cost-effectiveness of IT related functionality resulted in its omnipresence. This entails that a manager must understand it differently, viewing it as a necessity, like capital or people.
Carr eliminates the possibility of advantages due to proprietary software using the example of American Hospital Supply’s ASAP ordering tool. He highlights how specialized software can turn from a boon to bane, when more generic and updated solutions come into the picture. Many companies such as Dell and Wal-Mart have used the opportune time frame of the IT boom to set up their brand name and goodwill. That window seems to have closed now, because the possibility of a competitive advantage using IT is minimal, if not zilch.
This implies that IT is subject to large-scale commoditization, where companies purchase generi...

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...narz of the Network World aptly summarizes Carr’s article and its impact on the IT industry, “The article is remembered even until this day. If it would have been a downright false claim, it wouldn’t be discussed 10 years later”. Carr did have some very good opinions, which helped companies pull back from impeding financial crisis. The most important thing we must remember is that this article was written in the light of the dot com bubble burst. Uncontrolled IT investments had caused massive losses, with most companies shutting doors or losing stock values by 85-95%. Even strong leaders like Carly Fiorina saw stocks of her company, HP, fall to half their original value.
Hence, we must concede to some points laid forth by Carr, but also not become complacent and keep up with great technology and powerful infrastructure for the smooth functioning of our business.

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