Fuhgeddabout IT

Brace for new questions about the impact of IT spending on the bottom line

IT doesn’t matter.

That’s right — “IT doesn’t matter” is the title of a must-read piece for IT in the May 2003 Harvard Business Review. In a nutshell, Nicholas G. Carr, an independent business editor and writer, argues that IT is the latest in a series of broadly-adopted technologies that have changed the way business operates over the past 20 years, but the wide availability and low cost of technology infrastructure has begun to transform IT into an invisible “commodity input.” For the purposes of his discussion, Carr defines IT as “the technologies used for processing, storing, and transporting information in digital form.”

Carr goes on to argue that companies should take a more defensive approach to IT, spend less, and become IT followers instead of IT leaders. It has worked for companies such as Dell and Wal-Mart, Carr notes, and a number of studies have clearly demonstrated that higher levels of IT spending have no correlation to a company’s financial results.  In fact, the most successful companies spend far less on IT than the average.  In its ubiquity, IT no longer confers strategic advantage to companies, so they should focus on using IT for risk management not for creating new IT opportunities.

You know what?  Carr is right and IT staff should take heed.  But I think a deeper look at the larger IT environment suggests that although the nuts and bolts of IT don’t matter in and of themselves — the servers, the network, the databases — business is not out of the IT woods just yet. 

There’s a lot more to a successful technology operation than a bunch of cheap servers and network gear.  Although IT itself doesn’t matter, I have found that IT staff matter more than ever. Getting it all right still depends as much on assembling the right people as it does on using the appropriate technologies.

The market for IT jobs is undoubtedly poor right now, but I still need more IT help than I have on hand, even to handle the commodity tasks. Informal discussions with other CTOs and IT managers confirm that finding good IT people remains difficult, even with a seeming glut of talent.  The natural suggestion from the business side is to outsource, but outsourcing is not automatically cost effective. And you are still competing in the same labor market as your outsourcer, unless you are outsourcing IT to companies that are far removed geographically from your own (which is happening in some cases).

If the name of the game is managing costs to stay competitive, the old sports adage certainly applies: The best offense is a good defense.  Carr suggests that companies should focus heavily on security and service vulnerabilities, which is good news for security staff and anyone who knows how to build and maintain high-availability systems.   Eliminating waste in storage and server overdeployment is another element of playing defense. But anyone who has been involved in the consolidation trends of the past couple of years knows that managing infrastructure strip-down is a more valuable skill than simply building infrastructure willy-nilly.

If IT is headed in the same direction as electricity, that sounds pretty good to me — the last bill I got from an electrician certainly made me think about switching careers.  I think I’ll stick with IT for now, though.

Copyright © 2003 IDG Communications, Inc.

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