OPINION

So...IT Doesn't Matter?

Written by Deepa Mani
Published May 27, 2005

Nicholas Carr's controversial Harvard Business Review article "IT Doesn't Matter" engendered a visceral response from academics and practicing managers alike. The article, more nuanced than its title, states that the ubiquitous nature of IT is reflective of a change in its organizational role from a powerful strategic lever to a commodity input that's the cost of doing business. Allied IT management too shifts from identifying opportunities to reducing risk.

The contrarian view highlights the incompleteness of Carr's argument, and that the technological revolution has not peaked as Carr would have us believe. For example, in an article in the current issue of Optimize magazine, Erik Brynjolffson, a prolific researcher on linkages between IT investments and productivity, states that IT-intensive companies tend to be more productive, and that companies have not yet figured out how to take advantage of information technologies. However, he adds that the organizational-capital investment in productive "digital organizations" is typically 10 times larger than the average IT investment. Therefore, "IT is the catalyst, but organization capital is the hidden bulk of the iceberg". Brynjolffson enumerates seven practices that characterize the top-performing firms: (1) Digitization of processes (2) open, widespread information access to employees (3) Employee empowerment (4) Meritocratic incentive structures that link employee pay to performance (5) Investment in corporate culture (6) Recruitment of quality personnel (7) Investment in human capital.

Correct me if I am wrong but it seems like Brynjolffson's argument converges with Carr's. IT is a necessary investment to boost productivity but it is not what sustains competitive advantage. The key to success is not technology management but sound organizational practices that have been around longer than the Digital Age. IT doesn't matter?

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So...IT Doesn't Matter?
Published: May 27, 2005
Type: Opinion
Section: Politics
Writer: Deepa Mani
Deepa Mani's BC Writer page
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Comments

#1 — May 27, 2005 @ 09:48AM — Aaman [URL]

Not badly-engineered, disconnected-from-business-reality, implemented-to-sustain-and-grow-IT-budgets IT doesn't:)

#2 — May 27, 2005 @ 10:59AM — The Proprietor [URL]

IT is only an enabler and not the solution, and it certainly isn't going to be that when a lot of Brynjolffson's best practices are only paid lip service. Employee empowerment is an absolutely ludicrous concept, as most IT employees are more concerned with their jobs being handed to lower-cost sources, and as such will not feel empowered to do anything other than stay under the radar of whatever resource actions are current. Meritocratic pay is an absolute joke, given that many companies have violated the one inviolable rule (at least as far as I'm concerned) when it comes to staff - they've cut base pay. Given the vagueness of performance objectives and forced rankings during evaluations, it's impossible to get paid according to your merit unless you game the system or are a favorite of the power structure. Likewise investment in human capital - in most IT shops raises have been non-existent for the better part of this decade, as have been training dollars, the logic being that a fresh fish willing to work insane hours who's had the opportunity to play with the latest technologies in school is a more cost-effective investment than a senior person with production system responsibilities.

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