Does IT Matter?

Information Technology and the Corrosion of Competitive Advantage

Nicholas G. Carr

Publisher: Harvard Business School, 2004, 191 pages

ISBN: 1-59139-444-9

Keywords: Information Systems, Strategy

Last modified: July 8, 2021, 5:09 p.m.

Every year, companies spend more than $2 trillion on computer and communications equipment and services. Underlying these enormous expenditures is one of modern business's most deeply held assumptions: that information technology is increasingly critical to competitive advantage and strategic success.

In this explosive and engaging book, Nicholas G. Carr calls the common wisdom into question, contending that IT's strategic importance has actually dissipated as its core functions have become available and affordable to all. Expanding on the controversial Harvard Business Review article that provoked a storm a debate around the world, Does IT Matter? shows that IT - like earlier infrastructural technologies such as railroads and electric power - is steadily evolving from a profit-boosting proprietary resource to a simple cost of doing business.

Carr draws on convincing historical and contemporary examples to explain why innovations in hardware, software, and networking are rapidly replicated by competitors, neutralizing their strategic power to set one business apart from the pack. He shows why IT's emergence as a shared and standardized infrastructure is a natural and necessary process that may ultimately deliver huge economic and social benefits.

At the same time, the new IT infrastructure presents a host of challenges for businesses. Carr lays out a new agenda for IT management that stresses cost control and risk management over innovation and investment, and offers guidelines executives can follow to reevaluate everything from spending and staffing to security and outsourcing. He also examines IT's broader strategic implications, highlighting hazards that could ensnare unwary managers.

The way that executives respond to IT's changing role will influence their companies' - and their own - fortunes fr years to come. An eloquent and long-overdue assessment of one of the most important business phenomena of our time, Does IT Matter? is a must-read for business and technology managers, investors and policy makers, and anyone with a stake in IT's future.

  • Preface: The Great Debate
  • Background and Scope
  • The Plan of the Book
  • Acknowledgments
  1. Technological Transformations
    The Rise of a New Business Infrastructure
    • The Great Mind-Set Shift
    • The Strategic View
    • Looking Forward, Looking Back
  2. Laying Tracks
    The Nature and Evolution of Infrastructural Technologies
    • Advantages of Access
    • Advantages of Foresight
    • Building the Infrastructure
  3. An Almost Perfect Commodity
    The Fate of Computer Hardware and Software
    • The Commoditization of Hardware
    • The Commoditization of Software
    • Software's Future
    • Innovation in the Architecture
    • When Enough's Enough
  4. Vanishing Advantage
    Information Technology's Changing Role in Business
    • When IT Was New
    • Locking in Advantage
    • The Technology Replication Cycle
    • The Homogenization of Processes
    • The Emergence of Dominant Designs
  5. The Universal Strategy Solvent
    The IT Infrastructure's Corrosive Effect on Traditional Advantages
    • Sustainable Advantage and Leverageable Advantage
    • In Praise of Walls
    • The Need for Bifocal Vision
  6. Managing the Money Pit
    New Imperatives for IT Investment and Management
    • Spend Less
    • Follow, Don't Lead
    • Innovate When Risks Are Low
    • Focus More on Vulnerabilities than Opportunities
  7. A Dream of Wonderful Machines
    The Reading, and Misreading, of Technological Change


Does IT Matter?

Reviewed by Roland Buresund

Decent ****** (6 out of 10)

Last modified: May 21, 2007, 3 a.m.

An interesting and thought provoking reading. I fully agree that most IT departments and IT managers are counter-productive and self-serving. I most certainly doesn't agree with the fact that IT doesn't confer a competitive advantage if used right (ask BP with their custom-made clusters for oil-exploration or GE with their increase in IT spending while their profits roar or any mid-sized company whose new ERP-system manages to save them money and allows them better control of their finances).

Needless to say, I find this book interesting and a welcome provocation, while at the same time finding the examples and the thinking behind the theories fatally flawed.

It is recommended reading, as long as you don't fall for the flawed thinking.


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