Reflection on the article of Carr Essay Sample

In May 2003. Harvard Business Review ( HBR ) . a magazine chiefly addressed to concern people in general such as directors. analysts and strategians etc. . and IT constituencies in peculiar such as sellers. research workers. applied scientists etc. . published a radical article written by Nicholas Carr entitled “IT doesn’t Matter” . This article has created a immense argument within the IT industry. from oppositions and proponents the sentiments differ well. So in order to understand the argument better. we will get down in a first portion to reflect on the statements Carr presented to back up his thesis. so we will hold a closer expression on what other bookmans think about the article before reasoning in the last portion by giving our personal sentiment.

Carr is known as an independent author and editor who has a good cognition about the IT field and has written and guided many plants about it ; due to these position and repute. Carr’s chief thought which is rather simple took quickly a immense magnitude worldwide ( Hackathorn. 2003 ) . He stated that IT is really indispensable to concerns but does non supply them with competitory advantages any longer. Knowledge in general and information in peculiar are normally considered as power ( Davies. 1994 ) . Knowing what others don’t cognize particularly when they may necessitate to cognize it. gives you surely more power over them and a competitory advantage you may profit from a batch.

However. with the addition of information engineerings. particularly the Internet. the entree to information is going easier and its handiness increases continuously with clip which make the information worth less and of no strategic value. The fiscal market is the best illustration to better understand this thought. In fact within these sort of markets. information and its reading are the two chief drivers of success and therefore generators of higher net incomes. When information refering a specific company or any fiscal plus is of limited entree to merely few investors. they will hold a clearer vision so to take better determinations that will enable them to anticipate immense returns. This thought of ubiquitousness is what pushed Carr to the decision that IT doesn’t affair any longer.

Their very power and presence have begun to transform them from potentially strategic resources into trade good factors of production. They are going costs of making concern that must be paid by all but supply differentiation to none.

( Carr. 2003 )

In fact. IT is an indispensable component within the good operation of the concern but does non supply it with a competitory advantage any longer since it has lost all what used to do it alone. its scarceness. Harmonizing to him. companies should so see this clear ubiquitousness as a wake-up call to alter their direction of IT by passing less. It is undeniable that investing in IT has well increased from less than 5 % in 1965 of the capital outgo to about 50 % in the early 2000’s and this is because of the benefit it offers to the companies following it and utilizing it efficaciously ( Carr. 2003 ) . This importance means that IT is nowadays a necessity to be at equal degree with rivals and a status to remain in the market but besides means that supply of IT increased with clip which has certainly resulted in a decrease of its monetary value.

He considered IT as the latest world-changing engineering following a series of engineerings such as railwaies. telegraphs. telephone etc. . that have been commoditized with clip. For him. alike these engineerings. IT’s form is already known and determined. The clear differentiation of the different phases of technology’s edifice into the industry is really important in its direction. In the first phase. engineering is rare and really hard to obtain. Wisest companies. which notice its utility within their company and place the competitory advantage it will supply from far. are the first to put in it. They are cognizant that this investing. even if in this peculiar phase is protected. really difficult to retroflex by rivals. has a dearly-won monetary value. and needs specialised preparations and that’s what increases its scarceness and therefore its strategic value.

There are many illustration of these one-of-a-kind innovative companies. such as Airtel. Amazon. Walmart. Fedex. Cisco. Apple. Google. RyanAir etc. . which took the hazard of puting in IT in early phases have been rewarded decently and have besides as Keen said influenced the used patterns at the clip and encouraged others to the same — in other words. they have encouraged commoditization — ( Keen. 2010 ) . This commoditization will take us to another phase within which the engineering is demanded and hence supply should react to it ; overestimate of demand due to either bull-whip consequence or other factors may force the monetary value to diminish and do the engineering more available in the market.

The lessening in monetary value due to commoditization pushed Carr to distinguish between two sorts of engineerings: proprietorship and what he called infrastructural engineerings. In fact. he defines the proprietary 1s as the protected. difficult to obtain engineerings that make a clear differentiation in the operation of the concern by supplying it a competitory advantage. To exemplify this thought. he gives the illustration a pharmaceutical company that is the merely 1 to possess a patent for a component necessity to the production of a series of drugs. On the other manus. infrastructural engineerings are harmonizing to him the 1s which are indispensable to the whole industry’s operations and which merely possible benefit may be cost decrease. Electric power is one of the best illustration he gave to back up his statement. since this engineering has at the beginning differentiated its adoptive parents from others by diminishing both the clip of production and attempt whereas its power mercantile establishments are now integrated as an obvious characteristic within all edifices. In add-on. he claimed that this sort of engineering that is indispensable to the concern but with no strategic value. creates more hazards than benefit which is explained by the fact that if engineering works good. the concern will be running usually but when there is an anomalousness in its workability. the amendss it causes may be lay waste toing for the company.

This distinction may so be accentuated by the thought of the buildout phases explained before and that all engineerings may be considered as proprietorship at their debut in the market due to their alone features and get down to fall into the infrastructural class during the commoditization procedure. This was a immense misrepresentation for companies that did their best to protect their IT at its early phase and thought that the competitory IT provided them with is infinite. Therefore we should understand why IT is non a proprietary engineering any longer and this is due to several grounds. First. IT is today non more than a simple mean of transit of information. it enables information to be delivered in quicker clip and to all concerned parties. Reproduction of IT is going more possible than ne’er. the competition within IT fields is strong and hence similar engineerings may be produced by different companies and eventually all this leads IT monetary values to face an of import downward force per unit area represented by low or even pathetic monetary values which makes IT low-cost and accessible to all. Harmonizing to him. those are signals that inform the concern universe that. unluckily. this is merely the beginning of the diminution of IT since it is merely a affair of clip for these old grounds to be clearer and for the history to reiterate itself.

Carr is so warning concern people about the approaching completion of the commoditization procedure of IT in order for them to fudge from the calamity this may do and cut down their loss to the maximal degree by accommodating their scheme refering IT. He favors a tiring IT direction that will ensue in less IT disbursement. Previous surveies proved that companies which invest the most in IT acquire the lowest fiscal returns ; in 2002. a survey done by Alinean showed that the 25 companies that delivered the highest returns have merely exhausted 0. 8 % of their grosss on IT. Since IT is going more a trade good. companies should so acknowledge their indispensable IT disbursement so to non blow money purchasing what is of no usage or worst what may make hazard and cause loss. Leading companies have understood today that it is preferred to take clip analysing IT and to allow rivals follow the engineering foremost to detect its public presentation and to diminush their hazard before taking any regretable determination as Carr said companies today should “ follow. don’t lead” !

The fact that IT is going more homogenised makes the chance of benefitiating from being the first to accommodate an IT smaller and smaller ; therefore. waiting may be the best practive to be able to mensurate what IT will provides you with even before puting in it ( Andresen et al. 2004 ) . These may be chances companies should see but harmonizing to Carr is it now preferred to concentrate on exposures and seek to forestall the companies from its consequenses. Companies should so concentrate on how to protect themselves by holding contracts with their 3rd parties that will guarentee them a long tally coevals of benefit and forestall them from IT proficient or security breaks since these 3rd parties aim end is to sell and make non care about the company’s religion or public presentation ( Andresen et al. 2004 ) .

Mentions:

Keen. P. G. W. . and El Sawy. O. A. ( 2010 ) . Prosecuting in CIO-CxO “Conversations that Matter” : An Interview with Peter Keen. Retrieved October 12. 2012. from hypertext transfer protocol: //www. aui. ma:444/Mail/SBA/EE480517. nsf/0/F7201BD3B5097B6700257A9E0063C667/ $ File/CIO % 20CxO. pdf? OpenElement & A ; FileName=CIO % 20CxO. pdf.

Carr. N. G. ( 2003 ) . IT Doesn’t Matter. Retrieved October 23. 2012. from hypertext transfer protocol: //www. proxios. net/pdf/ITDoesn’tMatter. pdf.

Davies. S. ( 1994 ) . Introduction: Information. Knowledge and Power. Retrieved October 23. 2012. from hypertext transfer protocol: //www. Idahos. Ac. uk/files/dmfile/davies252. pdf.

Hackathorn. R. ( 2003 ) . IT Doesn’t Matter. Retrieved October 22. 2012. from hypertext transfer protocol: //www. information-management. com/issues/20031101/7622-1. hypertext markup language.

Andresen. T. . Tallaksen. M. . Proitz. U. . Harsjoen. A. ( 2004 ) . Second deliverable. Retrieved October 23. 2012. from. hypertext transfer protocol: //www. uio. no/studier/emner/matnat/ifi/INF5210/h04/prosjekt/oblig2/Obl2grpA. pdf.

Wybolt. N. ( n. d. ) . Some Ideas on IT Doesn’t Matter. Retrieved October 24. 2012. from. hypertext transfer protocol: //www. infoed. com/Open/PAPERS/Some % 20Thoughts % 20on % 20IT % 20Doesnt % 20Matter. pdf.