One day in the Year of the Ox

When the Harvard Business Review makes a contentious statement, you better sit up and take notice. Maybe not as mind-blowing as ‘the cover of the Rolling Stone’, but influential certainly. “IT doesn’t matter” says business writer and consultant Nicholas G Carr in HBR’s May 2003 issue, as he argues why infotech should no longer be considered a strategic advantage for companies and that it’s becoming pretty much an infrastructural technology like a power grid, or a transport network or a communication system. Enough to precipitate a barrage of opinion and counter-opinion from tech analysts and columnists all around the world.

Permit me to add to the barrage. Will get into argumentation mode later, but what I must state upfront is that Carr has, unwittingly or otherwise, fired an enormous salvo in support of the Indian IT services and BPO industry in strongly advocating “…more creativity in exploring cheaper alternatives, and a greater openness to outsourcing and partnerships.” If the Indian software industry was waiting for a learned endorsement of its business model in an erudite medium, surely this one rockets straight to the top of the heap.

In case you missed it, the article has a lot more to say too. In a nutshell, Carr argues that the very ubiquity of infotech diminishes its value as a strategic resource and renders it rather impotent in providing companies with a competitive edge. Meaning to say, I reckon, that if every single player in a particular industry uses, for instance, the same or similar commoditised customer relationship management software, what possible competitive advantage could any individual one of them derive from it? Like, when everyone has electricity, it’s laughable to think of a company using electricity for strategic advantage, beyond maybe the feeble cost-cutting measure of inculcating a culture of “switching off fans and lights when not required.” The window of opportunity for competitive advantage when a new technology emerges is a small one, says Carr. Forward-looking companies often benefit from quick adoption of a new technology, but only for a while.

But, to my mind, the very nature of IT makes the comparison between infotech and other infrastructural technologies like electricity or transport an inappropriate one. Because, with information technology, it’s really the complete integration of infotech into the business process that’s the important part—not the processing power or the storage or the MIPS or even the software. It’s the use of the IT tools for business intelligence, knowledge management and a derivation of maximum business benefit in every sphere that forms the crux of the matter. And as any harried CIO will tell you, the complexity of information technology and the diversity of options ensures that the degree of integration into the business that’s possible can vary vastly depending on how effectively the information systems are deployed and executed.

That’s why vendors of information technology are falling over each other to genuflect before the Gods of open standards, postulating Web services, utility computing and adaptive infrastructure as the silver bullets that will ensure painless integration and deployment of all IT systems in an organisation. But if you’ve been following the standards saga even sporadically, you’d be aware that the myriad standards avatars still rival the gods of the Hindu Pantheon in number. And unlike Hinduism, no underlying Universal God of standards may ever emerge, because that very premise could destroy any kind of competitive advantage of the infotech vendors over each other! Total, unmitigated openness may not exactly be desirable for the major stakeholders of the IT industry.

Another point that goes against Carr’s lumping of IT with other infrastructure technologies is the pace of innovation in IT. Several decades may go by without any ‘disruptive’ innovation when it comes to electricity and the like, but with IT, wave after relentless wave of innovation changes the rules of the game ever so often. Like the PC and the Internet and wireless, for instance—and who knows what next. Windows of opportunity are opening thick and fast and I don’t see any possibility of that slowing down any time soon. Of course not all companies need to be on the leading-edge of technological adoption—and sometimes it could be counter-productive to do so—but someone within the organisation better be on the ball in evaluating each new technology and the pros and cons of attempting to align them all with internal business benefit.

All the above notwithstanding, Carr definitely has some very useful insights and advice for IT heads. Not the least of which is his exhortation to IT heads to focus on vulnerabilities rather than opportunities. Your IT systems may not give you a competitive edge, he says, but even their brief disruption, absence or outage can be devastating to the business. Further, passive purchasing and mindless upgradation are a definite no-no. “Be willing to explore cheaper solutions, including open-source applications and bare-bones network PCs, even if it means sacrificing features,” postulates Carr. I know at least one software company that will not be too happy with such ‘blasphemy’.

So all in all, it would seem that it’s actually the number-crunching side of IT that doesn’t matter any more. The routine systems, the payroll processing, the back-office operations, the system maintenance and services. Smart companies have already realised this and have long since outsourced all of these non-core activities. The smarter ones have done so to India, and are already reaping the benefits. With articles like Carr’s I’m betting a lot more will follow suit soon.

Yes, IT might ultimately not matter… one day in the Year of the Ox, maybe.

Val Souza, Editor
valsouza@expresscomputeronline.com