More Topics

Yes, IT is a competitive differentiator

IT matters, and here's why.
Written by Joe McKendrick, Contributing Writer

Esther Dyson, chairman of EDventure Holdings and one of the top thought leaders in technology (who was contributed blog postings here at ZDNet), just published a piece in the Wall Street Journal on the business potential in the aerospace and commercial space travel. (March 20, 2007)

Esther points to IT as the competitive differentiator for an emerging class of air travel, the high-end "air taxis" that hop between smaller airports, helping travelers escape the cattle-herding hassles of major airports and airlines. The air taxi provider that can effectively deliver value to its high-value customers.

"IT is needed to optimize the use of aircraft and staffing resources according to specific customer demand: With enough hardware and software, each trip can be what programmers call an 'exception': a route uniquely designed for each customer, each time."

Such customization couldn't have been done with index cards and Post-It notes, and probably not too efficiently with laptops. Business intelligence software, with predictive analytics are needed. The big airlines themselves are finding success in deploying analytical tools to match up customers with the best routes.

Many question, of course, whether IT actually is a competitive differentiator, or if it's slipping into commodity status. A lot of it is.

Nick Carr, of course, is the guru of the IT-doesn't-matter movement. Carr’s arguments make sense when considering the commoditization of hardware, operating systems, networks and storage. We’ve all become jaded by the breathless (and eye-rolling) claims of ‘revolutionary’ technologies, paradigm shifts and inflection points.

Equipping employees with Windows PCs and laptops is simply a given to stay even with everyone else, not something that's going to propel your company to the head of the industry. At the high end, installing an ERP and CRM system won't make your company an industry leader, it will simply keep you in business.

However, it's not having these systems; it's what you do with these systems that can propel you to industry leadership. It was therefore interesting to see a piece I posted over the FastForward Enterprise 2.0 site picked up by ComputerWorld, which discussed the pros and cons of the IT-as-a-commodity argument.

Carr wasn’t at the recent FastForward Enterprise 2.0 conference, but former Oracle president Ray Lane gave an opening speech in which he said Carr was right, “noting that heavy investments in technology seem to have made little or no difference in the long-term profitability of many companies.”

Andrew McAfee, Harvard professor and Enterprise 2.0 guru, refuted this thinking the next day at the same conference, proclaiming that  “I deeply believe that IT, as a whole, increases competitive differentiation within companies,” McAfee said, adding that Enterprise 2.0 technologies will “accelerate that conviction.” (The two have some history, by the way — When McAfee wrote this, Nick Carr said this, and McAfee responded with this.)

Jim McGee, director of the Huron Consulting Group, put it all in its proper perspective, stating that the question was not whether IT mattered or not — “the questions are how does it matter, when does it matter, how does it integrate with our broader strategic agenda, and what do we as senior executives need to understand about technology’s capabilities and possibilities in order to make intelligent decisions for our particular organization?”

There never been an expectation that IT would be solely responsible for a company’s rise or fall. Adroit management, supported by the right IT tools, makes the difference. A company that smartly and innovatively leverages its IT in new and creative ways will move to the head of the pack. And, thanks to IT, you don’t need a workforce of thousands to do so.

Editorial standards