So on one side of the fence, the proponents argue not so much that IT is of no value, but that's it no longer a competitive differentiator for organisations. IT matters in the same way as electricity, or other commoditised business inputs. It's the plumbing that every business needs to operate, available in different flavours from multiple vendors... but effectively delivering the same results. The bursting of the IT bubble/dot-com crash of 2000 at its most basic level was a realisation that IT alone did not a competitive advantage make. A small number of dot-com companies prospered as a result of their superior vision and execution. The vast majority disappeared, their existence based purely on a new wave of technology failing to deliver a competitive advantage (or profit).
This view of IT is also reflected in a recent IDC survey ("Forecast for Management" 1996-2004) -- over 70 percent of CIOs think executives view IT as contributing to operational efficiency (trending upwards), while less than 20 percent think that IT is a source of competitive advantage (down from about 30 percent in 1994).
Conversely, the opposing view is that IT is a key part of business strategy. A different IDC survey shows that 38.5 percent of executives claim IT as being "critically important" to business success and 41 percent say it's an "important factor". An increasing number of CIOs are reporting to the CEO, who recognise the ability of IT to improve customer services or increase productivity. The significant IT investments made by banks -- while sometimes resulting in disastrous failures -- also indicates a desire to use technology to deliver a competitive advantage.
IT has one key difference to the other industries Carr compares it to -- the rate of change (the last train I caught looked like it could have been built about the same time as IBM's first mainframe computer). In contrast to commoditisation of many sectors of the IT industry, other areas offering "first mover advantage" emerge with regularity -- new forms of wireless communication that will change how we interact and do business, accelerated take-up of broadband, embedded RFID chips, IP telephony.
As a provider of network service and infrastructure management, we'll accept both arguments. As organisations increasingly move to selective outsourcing agreements for network support, we help them reduce costs and get more from their existing (commoditised) infrastructure. Conversely, we also work with vendors to implement new technologies, such as IP telephony and associated voice applications or wireless deployments, that deliver a competitive advantage. There's no doubt that IT has become increasingly commoditised, but every year brings a new set of technologies that promise differentiation to the early adopters -- which is more than I've seen from my power company or CityRail!
Oliver Descoeudres is marketing manager at network IP/Internet network infrastructure builder and solutions provider NetStar Australia. He can be contacted at firstname.lastname@example.org or on 02 9805 9759.
This article was first published in Technology & Business magazine.
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