The Significance of IS

IT Doesn't Matter

Just as a consensus was forming about the value of IT, the Internet stock market bubble burst. Two years later in 2003, Harvard professor Nicholas Carr wrote his article "IT Doesn't Matter" in the Harvard Business Review. In this article Carr asserted that as information technology had become ubiquitous, it has also become less of a differentiator, much like a commodity. Products that have the same features and are virtually indistinguishable are considered to be commodities. Price and availability typically become the only discriminators when selecting a source for a commodity. In Carr's view all information technology was the same, delivering the same value regardless of price or supplier. Carr suggested that since IT is essentially a commodity, it should be managed like one. Just select the one with the lowest cost this is most easily accessible. He went on to say IT management should see themselves as a utility within the company and work to keep costs down. For Carr IT's goal is to provide the best service with minimal downtime. Carr saw no competitive advantage to be gained through information technology.

As you can imagine, this article caused quite an uproar, especially from IT companies. Many articles were written in defense of IT while others supported Carr. In 2004 Carr released a book based on the article entitled Does IT Matter?  A year later he was interviewed by CNET on the topic "IT still doesn't matter". Watch the video of Carr being interviewed about his book on CNET.

Probably the best thing to come out of the article and subsequent book were discussions on the place of IT in a business strategy, and exactly what role IT could play in competitive advantage.