Nicholas Carr has made many valid points in his article, but it is very important to keep the context in mind. I will first address the points raised from the viewpoint of the IT mature organisations, which are more likely to be in the worlds developed markets. I will then consider the points from the viewpoint of organisations in the worlds emerging markets and who have limited use of IT at present for a variety of reasons.
For the worlds technology saturated markets and organisations, Carrs contention is that IT has become commoditisied and may not therefore offer a significant source of competitive advantage. This is a view that I find hard to believe. There are some parts of IT to which this may apply to for example, access to computing and Internet. But for the most part, there is still plenty of room for using IT for ones advantage. Carrs point is that because IT is replicable, these unique applications are likely to become commonplace. Possible, but IT taken together with business model innovation can offer enough of room for innovation and advantage. That may still not be enough for sustained profits because the economies and organisations at the top of the IT usage pyramid have limited inefficiencies that they are going to be able to address.
So, my view is that the views expressed by Carr, while being relevant and timely, cannot be applied to every sphere of IT. There are many emerging areas of technology which will continue to surprise. Each emerging area will have its innovators and early adopters who will be able benefit from the use of IT. The pertinent point is that the change being brought by technology is not over, but has just begun. At the point of time which is now, it may be hard for us to look ahead and see dramatic changes coming in the future which are likely to provide differentiated competitive advantages for organizations. But this is what always happens when a new technology comes up, and the rate of emergence of new technologies is not slowing.
What has slowed is the pace of adoption as weary CIOs opt for greater stability. Unlike the investment frenzy of a dotcom era when just about everyone invested in IT without a second thought, there is now a focus on looking at the return of investment that technology provides. This is what we forgot and is the cause of the angst being felt by many business managers. This is manifesting into a belief that technology can do little to provide competitive differentiation because every organization has the same likelihood of adoption of the new technologies as they become available.
This is not true. Each technology cycle brings its leaders and laggards. Unlike railroads and electricity where innovation in the infrastructure was limited once the network and grid was built out, this is not the case with technology. Each new innovation offers a potential for a competitive advantage to its early adopters. So, if anything, CIOs need to be on the lookout for those emerging technologies which can offer distinction in specific business processes. There is not likely to be any big bang improvement, but to stretch this to the belief that because of standardisation of technology, the improvements will be able to all nearly simultaneously is not correct.
What IT managers need is a vision into tomorrow to better understand the emerging technologies, marry this knowledge with that of the business processes involved in the extended enterprise, and then decide where the new technologies have the potential to provide the greatest returns.
Tomorrow: My View: IT and Emerging Markets
TECH TALK IT’s Future+T