Similarly, if an industry lags in harnessing the power of the technology, it will be vulnerable to displacement. When the Harvard Business Review HBR published IT Doesnt Matter in May 2003, the point. Netgear dg834g pdf manual Doesnt Matter, published in the May.Matter by Nicholas G. As information technologys power and ubiquity have. In his HBR article, 'IT Doesn't Matter,' Nicholas Carr has stirred up quite a bit of controversy around IT's role as strategic business differentiator. The number of central stations operated by utilities grew from 468 in 1889 to 4,364 in 1917, and the average capacity of each increased more than tenfold. The bulk of what’s being stored on corporate networks has little to do with making products or serving customers—it consists of employees’ saved e-mails and files, including terabytes of spam, MP3s, and video clips. In 1968, a young Intel engineer named Ted Hoff found a way to put the circuits necessary for computer processing onto a tiny piece of silicon. Focus IT resources on preparing for such disruptions—not deploying IT in radical new ways. Businesses worldwide pump $2 trillion a year into IT. 92 0 obj <> endobj 108 0 obj <>/Filter/FlateDecode/ID[]/Index[92 26]/Info 91 0 R/Length 82/Prev 181665/Root 93 0 R/Size 118/Type/XRef/W[1 2 1]>>stream As the first worldwide depression took hold, economic malaise covered much of the globe. Separate essential investments from discretionary, unnecessary, or counterproductive ones. Start imposing hard limits on upgrade costs—rather than buying new computers and applications every time suppliers roll out new features. During the last quarter of the twentieth century, the computational power of a microprocessor increased by a factor of 66,000. Of the essay, written by Nicholas G. Carr, then editor at large of. (See the sidebar “New Rules for IT Management.”). The staff of HBR voted “IT Doesn’t Matter” the best article to appear in the magazine. IT Doesn’t Matter An article by Nicholas G. Carr published in the Harvard Business Review in. In fact, the opposite is usually true. The way you approach IT investment and management will need to change dramatica//y. But it’s mistaken. By wiring their plants and installing electric motors in their machines, they were able to dispense with the cumbersome, inflexible, and costly gearing systems, gaining an important efficiency advantage over their slower-moving competitors. As the commoditization of IT continues, the penalties for wasteful spending will only grow larger. The mid-nineteenth-century boom in railroads (and the closely related technologies of the steam engine and the telegraph) helped produce not only widespread industrial overcapacity but a surge in productivity. Today, no company builds its business strategy around its electricity usage, but even a brief lapse in supply can be devastating (as some California businesses discovered during the energy crisis of 2000). He examines the evolution of IT and argues that it follows a pattern very similar to that of earlier technologies like railroads and electricity. “Optimism about a future of indefinite progress gave way to uncertainty and a sense of agony,” wrote historian D.S. At the same time, the buildout forces users to adopt universal technical standards, rendering proprietary systems obsolete. IT Doesn’t Matter Zach Evans. Computerworld estimates that as much as 70% of the storage capacity of a typical Windows network is wasted—an enormous unnecessary expense. Behind the change in thinking lies a simple assumption: that as IT’s potency and ubiquity have increased, so too has its strategic value. IT has become a commodity, and therefore has no more strategic advantage in and of itself. In the dozen years from 1989 to 2001, the number of host computers connected to the Internet grew from 80,000 to more than 125 million. Moreover, the standardized nature of infrastructural technologies often leads to the establishment of lucrative monopolies and oligopolies. At the close of the 1990s, when Internet hype was at full boil, technologists offered grand visions of an emerging “digital future.” It may well be that, in terms of business strategy at least, the future has already arrived. Having or doing something that they. In actuality, the window for gaining advantage from an infrastructural technology is open only briefly. AHS gained a true competitive advantage by capitalizing on characteristics of infrastructural technologies that are common in the early stages of their buildouts, in particular their high cost and lack of standardization. The telegraph system spread even more swiftly. $4.25. Until the end of the nineteenth century, most manufacturers relied on water pressure or steam to operate their machinery. In fact, the opposite is usually true. The winners will do very well; the losers will be gone. Companies watched the value of their products erode while they were in the very process of making them. An industrial manufacturer may discover an innovative way to employ a process technology that competitors find hard to replicate. In the long run, though, the greatest IT risk facing most companies is more prosaic than a catastrophe. Instead of aggressively seeking an edge through IT, manage IT’s costs and risks with a frugal hand and pragmatic eye—despite any renewed hype about its strategic value. Finally, and for all the reasons already discussed, IT is subject to rapid price deflation. Indeed, it is hard to imagine a more perfect commodity than a byte of data—endlessly and perfectly reproducible at virtually no cost. Consider some statistics. IT may be a commodity, and its costs may fall rapidly enough to ensure that any new capabilities are quickly shared, but the very fact that it is entwined with so many business functions means that it will continue to consume a large portion of corporate spending. The spark igniting the controversy was a May 2003 Harvard Business Review article, IT Doesn't Matter, by business theory iconoclast Nicholas Carr. IT Doesn’t Matter Nicholas G. Carr Is Silence Killing Your Company? In 1965, according to a study by the U.S. Department of Commerce’s Bureau of Economic Analysis, less than 5% of the capital expenditures of American companies went to information technology. Today, no one would dispute that information technology has become the backbone of commerce. h�b```f``Ra`a`P�b�g@ ~�+sltd`�V����cY��ۿ��L``p���1��w� Power in those days came from a single, fixed source—a waterwheel at the side of a mill, for instance—and required an elaborate system of pulleys and gears to distribute it to individual workstations throughout the plant. Negotiate contracts ensuring long-term usefulness of your PC investments. As IT’s power and presence have expanded, companies have come to view it as a resource ever more critical to their success, a fact clearly reflected in their spending habits. They do, but their influence is felt at the macroeconomic level, not at the level of the individual company. Summary IT doesn’t matter by Nicholas Carr In his article in the Harvard Business Review of 2003 Carr argues that IT has lost its strategic value. The characteristics and economics of infrastructural technologies, whether railroads or telegraph lines or power generators, make it inevitable that they will be broadly shared—that they will become part of the general business infrastructure. Each stage in that progression has involved greater standardization of the technology and, at least recently, greater homogenization of its functionality. Railroad tracks, telegraph wires, power lines—all were laid or strung in a frenzy of activity (a frenzy so intense in the case of rail lines that it cost hundreds of laborers their lives). As with earlier infrastructural technologies, IT provided forward-looking companies many opportunities for competitive advantage early in its buildout, when it could still be “owned” like a proprietary technology. As information technology’s power and ubiquity have grown, its strategic importance has diminished. IT Doesn't Matter magazine article. 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