Nick Carr takes the middle path

In 2003, Nicholas G. Carr published his inflammatory Harvard Business Review article, "IT Doesn't Matter," in a shot heard 'round the IT world. Then, last year, he published a book: Does IT Matter? IT and the Corrosion of Competitive Advantage.

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Now, in an InfoWorld interview, Carr says that IT might matter -- in certain cases. "I haven't changed my mind about the core of my assessment," says Carr, "which was that as IT becomes standardized and cheaper, and better understood, it becomes harder to sustain a competitive advantage."

However, "I think some companies are smart users of IT, and some not so smart," Carr adds. "And that difference itself can give you competitive advantage." He says companies that already have some important differentiation in their business -- such as in processes or strategy -- can use IT to make it harder for competitors to catch up.

He cites the example of Las Vegas-based Harrah's Entertainment, which -- as opposed to its competitors -- seeks to attract everyday gamblers rather than high rollers and uses IT to track the behavior and preferences of those everyday gamblers and provides rewards to them.  "What's really different about Harrah's is not just the analytic software, which other casinos could copy, but the combination of the technology linked to a distinct customer focus," Carr says.

Carr also thinks IT can be a competitive advantage for startup or "greenfield" companies such as JetBlue, which aren't shackled to legacy business models and the legacy IT that supports them. "But that's not all that useful a model if you're an established company," he says.  Instead, CIOs and IT managers at established companies should "focus on where the money's going and where the headaches are," specifically "making their existing IT operation more efficient and less capital-intensive."

After those problems have been fixed, says Carr, CIOs should look to use IT as a competitive advantage in the most specialized areas of their businesses. "Any activity or process that's unique, a distinctive app can be very powerful," says Carr, "because in those areas there's not a big incentive for vendors to move in and start offering a commoditized, packaged solution."