“IT Doesn’t Matter” Assignment
Assunta P. Cuccia
February 19, 2010
In the national bestseller, Good to Great, Collins devotes a chapter to Technology Accelerators in which he posits provocatively “The real question is not, What is the role of technology? Rather, the real question is, How do good-to-great organizations think differently about technology?” The value of Information Technology (IT) is based on how it is aligned with a company’s business model, core competencies and strategies so that a competitive advantage can be sustained. Today’s commerce is heavily dependent on IT, and as stated in Chapter 1, page 47 of our textbook, “IT is a powerful tool for defining, ...view middle of the document...
The adopters of these technologies, just like IT, enjoyed short-lived competitive and economic gains. However, widespread use and wearing off of the novelty gave way to commoditization. As Carr describes, IT is more of an “infrastructural technology” because, 1) the opportunity for competitive advantage is limited, and 2) it delivers more value when it is shared in the general business infrastructure.
In years passed, companies used to buy new software and hardware for their employees because of perceived benefits of features and capabilities, much of which was driven by third party vendors. The over-investment in IT has turned full circle due to, 1) increased scrutiny on bottom-line financials,
and 2) increased spending, which does not lead to heightened competitive advantage. In today’s environment, more industries are consolidating, and this trend is likely to continue. Business leaders need to be pragmatic about IT as a means to lower costs and increase efficiency. Standardization of Web-enabled services, pre-packaged server clusters, software suites, outsourcing, and cloud computing will lead to IT automation. In this context, it is more about serious cost and risk management, rather than continuing to invest in nonstandard IT applications. Carr’s conclusion is pragmatic, he stresses the importance of maintaining discipline in IT management and spending less. Interestingly, he alludes to a renewed hype of IT’s strategic importance in the future as his concluding thought.
“Investing in the IT That Makes a Competitive Difference” is a strong article published in 2008 on the importance of enterprise IT and its technology-enabled processes. It delves deeply into the manner by which technology has had an impact on the competitive landscape that benefited and contributed to the success of three companies, i.e. Cisco, CVS and Otis. There is a clear separation between the technology climate of the 1990s compared to the early 2000s (as shown in the exhibit “The IT Surge”), and one of the differentiators was the heavy investment and spending in IT technology. The remarkable feat is the development of internet and enterprise software applications such as enterprise resource management (ERP), customer relationship management (CRM) and enterprise content management (ECM). If the strategy of a business is to gain a certain percentage of market share, then the tactic to ensure success is enterprise IT and the right choice of technology-enabled processes. Without a doubt, businesses can choose from a plentiful toolkit of innovative technologies. However, the key is choosing the right technology to support the business’ operating model, sustaining it over time and replicating improvements at a wider level.
McAfee and Brynjolfsson propose a three-pronged strategy or framework to gain the competitive edge and to remain ahead of rivals i.e. “Deploy, innovate, and propagate.” For purposes of clarity in this section,...