Ignore technology at your peril

Posted by Wai Kwen Chan on Oct 23 16:12.

By Robert Galliers

Nicholas Carr published an article in the May 2003 edition of the Harvard Business Review, with the title “IT Doesn’t Matter”. The staff of HBR voted it the best article to appear in the magazine that year. A sequel, “The End of Corporate Computing”, appeared in the Spring 2005 issue of the MIT Sloan Management Review. These articles have had quite an impact, with fewer MBA students signing up for IT courses and B-school deans closing down IT-related programmes. Carr sees IT as an “infrastructural technology” – similar to the supply of electricity. As such technologies become ubiquitous and their cost decreases, they become mere commodities. Thus, “from a strategic standpoint, they become invisible; they no longer matter”.

Carr - and those B-school deans – couldn’t be more wrong. While IT per se may no longer matter, the management of IT, information systems, and associated services has never been more strategic.

If IT doesn’t matter, then presumably we can leave an understanding of the impacts of IT to the generalist manager? If IT doesn’t matter, we can leave the management of sourcing relationships to the chief accountant, or some other business functionary? If IT doesn’t matter, the management of our knowledge resources, knowledge creation and innovation can be left to … whom?

If IT doesn’t matter, why is it that so many companies and government agencies continue to waste countless millions on information systems projects that fail to meet deadlines let alone the stated business objectives?

And in B-schools, who will teach this material? Accounting or finance professors? Marketing professors? Professors of organisational behaviour, or strategy? Take a look at their textbooks and try to find material on these issues. You’ll be disappointed.

What Carr, and others who share his view, apparently do not understand is that competitive advantage never did arise from the technology per se. The advantage came from the astute and forward- thinking harnessing of that technology. President Obama figured that out.

Take the internet as an example. While it may well be just another means of doing business – by opening up a new channel – its counter-intuitive impact is that it’s likely to increase competition and make it more difficult for companies to sustain their competitive advantage over time. This particular technology, then, rather than being a force for competitive advantage, becomes a force against competitive advantage. To quote Michael Porter, while some have argued that “the Internet renders strategy obsolete … the opposite is true … it is more important than ever for companies to distinguish themselves through strategy”.

What’s needed, therefore, is for information systems considerations to be integrated into business and knowledge strategy. You need executives who understand what the technology can and can’t do. Our management practices have to move away from old-style thinking that focused entirely on exploiting IT, to exploring new possibilities. And you need information systems management professors to research and teach that.

Thus, businesses – and B-schools – need to take the strategic issues associated with IT very seriously. Issues such as:

•the impacts and implications of emerging IT (including mobile technology and open source software)

•the process, implementation and on-going review of business information systems strategies

•building information systems capabilities, and concern for IT governance issues such as security and privacy

•managing sourcing partnerships

•building and sustaining agile information systems

•getting the best out of enterprise-wide systems

B-schools that fail to incorporate these considerations into their core curricula do a disservice to their students – and to business.

Robert Galliers is Provost of Bentley University
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