Business Technology: IT Is A Must, No Matter How You View It

As we chatted about last week, the vaunted Harvard Business Review recently came up with the conclusion that "IT Doesn't Matter," and the prestigious journal devoted several pages to an article penned by Nicholas Carr and dedicated to proving that IT is going the way of the telegraph, railroad tracks, and internal-combustion engines.

No doubt, lots of people will have lots of different opinions on the conclusions framed in the article. But one person with a truly unique set of qualifications with which to assess the article is Ralph Szygenda, CIO of General Motors for the past several years and InformationWeek's "Chief of the Year" for 2002. Ralph was gracious enough to share with InformationWeek some of his reactions after reading the piece in the Harvard Business Review.

"Nicholas Carr may ultimately be correct when he says IT doesn't matter," Szygenda began. "Business-process improvement, competitive advantage, optimization, and business success do matter and they aren't commodities. To facilitate these business changes, IT can be considered a differentiator or a necessary evil. But today, it's a must in a real-time corporation."

Szygenda did concur with one of Carr's corollary recommendations: spend less. In the HBR article, Carr stated, "It's getting much harder to achieve a competitive advantage through an IT investment, but it is getting much easier to put your business at a cost disadvantage." Szygenda's reaction: "I also agree on spending the minimum on IT to reach desired business results. Precision investment on core infrastructure and process-differentiation IT systems is called for in today's intensely cost-conscious business versus the shotgun approach sometimes used in the past."

What I take from that is this: Spend what is required but no more to achieve essential differentiation via business processes and the IT systems that support them.

The CIO of GM continues with another agreement, although one with a significant qualification: "Yes, IT has aspects of commoditization. PCs, telecommunications, software components such as payroll, benefit programs, business-process outsourcing, and maybe even operating systems and database-management systems are examples. But the application of information systems in a corporation's product design, development, distribution, customer understanding, and cost-effective Internet services is probably at the fifth-grade level."

Well, if IT doesn't matter, I guess they'll just stay stuck at that fifth-grade level.

On the other hand, if the focused and strategic applications that they support and that Ralph is describing do indeed matter, then there's plenty--plenty--of progress to be made.

And, in conclusion, Ralph's thoughts on the commodity claim: "After being a part of the IT industry for 35 years, I have heard similar pronouncements during the introduction of the integrated circuit, microprocessor, PCs, office systems, ERP systems, and the Internet. Nicholas Carr and others need to be careful not to overstate the speed of the information-management journey or [they] may make the same mistake that Charles H. Duell, the director of the U.S. Patent Office, did in 1899 when he said, 'Everything that can be invented has been invented.'"

Bob Evans,
Editor in Chief
[email protected]

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