Does IT Matter?

I had a chance Friday to hear Nicholas Carr speak on the subject of "Does IT Matter?". His basic premise (assuming I understood him right) is that IT is a commodity and no longer provides companies a strategic advantage.

Dr. Carr gained fame a few years ago with an article in the Harvard Business Review. His article bluntly stated that IT doesn't matter. It sparked significant discussion. He recently published a book entitled "Does IT Matter?" that drives the same message.

His line of reasoning is that the effort involved to gain a competitive advantage from IT is so large - and the project's ROI so long - that it's extremely difficult for companies to gain an advantage. When you combine that with what's typically a low barrier for your competitors to copy you, you've lost. Using some assumptions (Moore's Law, etc), he rationalizes that the first movers on a technology actually lose in the long run. First adopters incur high costs since whatever the technology is hasn't reached commodity status. Due to the high cost, the ROI is drawn out. To the extent competitors wait a bit for commodity status, they can gain a faster ROI and take away any advantage you had - leaving you not only without your competitive advantage, but also with less-than-realized ROI.

There are a few assumptions in here of course. For example, not all technology quickly moves to commodity status. I agree with his fundamential argument, which is very simple. If you have a project that costs a lot, gives you only small advantages over competitors, and it's easy for competitors to get onto equal footing with you, that's not a great project to get into. But, I would argue to the extent that you can gain a fast ROI, a substantial competitive advantage, or where there are barriers to competitors entering, companies can use IT as a competitive advantage. Unless there are early adopters and many followers, no technology will ever gain commodity status. So, it certainly is reasonable for companies to continue searching for ways to use IT as a strategic and competitive advantage!

Anyway, Dr. Carr is an engaging speaker. While I don't agree entirely with his arguments, they are certainly thought provoking.