He edited The Digital Enterprise, a collec-tion of HBR articles published by Harvard Business School Press in 2001, and has written for the Financial Times, Business 2.0, and the Industry Standard in addition to HBR. Why write your own application for word processing or e-mail or, for that matter, supply-chain management when you can buy a ready-made, state-of-the-art application for a fraction of the cost? Landes. In the dozen years from 1989 to 2001, the number of host computers connected to the Internet grew from 80,000 to more than 125 million. The history of IT in business has been a history of increased interconnectivity and interoperability, from mainframe time-sharing to minicomputer-based local area networks to broader Ethernet networks and on to the Internet. Carr is HBR’s editor-at-large. For a brief period, as they are being built into the infrastructure of commerce, these “infrastructural technologies,” as I call them, open opportunities for forward- looking companies to gain strong competitive advantages. The winners will do very well; the losers will be gone. And now he has expanded his thesis into a new book called Does IT Matter. Consider some statistics. Suddenly, Mr Carr … And waiting will decrease your risk of buying something technologically flawed or doomed to rapid obsolescence. For most business applications today, the benefits of customization would be overwhelmed by the costs of isolation. He also clarifies that he does not mean that information itself doesn’t matter, nor does he mean that the people using the technology don’t matter. In 2000,nearly half of U.S.corporate capital spending went to information technology.Then the spending col- If so, you’re not alone. Even worse, the flood of capital led to enormous overcapacity, devastating entire industries. In his HBR article, 'IT Doesn't Matter,' Nicholas Carr has stirred up quite a bit of controversy around IT's role as strategic business differentiator. In Continental Europe, there were just 2,000 miles of telegraph wires in 1849; 20 years later, there were 110,000. AHS gained a true competitive advantage by capitalizing on characteristics of infrastructural technologies that are common in the early stages of their buildouts, in particular their high cost and lack of standardization. By the early 1990s, it had reached more than 30%, and by the end of the decade it had hit nearly 50%. In fact, the opposite is usually true. Information Technology and the Corrosion of Competitive Advantage expands and extends the arguments in Nicholas Carr’s explosive Harvard Business Review article “ IT Doesn’t Matter.”. The arrival of the Internet has accelerated the commoditization of IT by providing a perfect delivery channel for generic applications. In 1968, a young Intel engineer named Ted Hoff found a way to put the circuits necessary for computer processing onto a tiny piece of silicon. In his HBR article, 'IT Doesn't Matter,' Nicholas Carr has stirred up quite a bit of controversy around IT's role as strategic business differentiator. A few companies may still be able to wrest advantages from highly specialized applications that don’t offer strong economic incentives for replication, but those firms will be the exceptions that prove the rule. HBR AT LARGE • IT Doesn’t Matter Nicholas G. Carr is HBR’s editor-at-large.He edited The Digital Enterprise,a collec-tion of HBR articles published by Harvard Business School Press in 2001,and has written for the Financial Times,Business 2.0,and the Industry Standardin addition to HBR.He can be reached at ncarr@hbsp.harvard.edu. Saying of “IT Doesn’t Matter”: “Carr’s. He examines the evolution of IT and argues that it follows a pattern very similar to that of earlier technologies like railroads and electricity. As information technology’s power and ubiquity have grown, its strategic importance has diminished. Finally, and most definitively, the investment bubble has burst, which historically has been a clear indication that an infrastructural technology is reaching the end of its buildout. Myriad other companies have gained important advantages through the innovative deployment of IT. Focus IT resources on preparing for such disruptions—not deploying IT in radical new ways. In 2002, the consulting firm Alinean compared the IT expenditures and the financial results of 7,500 large U.S. companies and discovered that the top performers tended to be among the most tightfisted. Worrying about what might go wrong may not be as glamorous a job as speculating about the future, but it is a more essential job right now. The 25 companies that delivered the highest economic returns, for example, spent on average just 0.8% of their revenues on IT, while the typical company spent 3.7%. Today, an IT disruption can prove equally paralyzing to your company’s ability to make products, deliver services, and satisfy customers. Chief executives now routinely talk about the strategic value of information technology, about how they can use IT to gain a competitive edge, about the “digitization” of their business models. They let more impatient rivals shoulder the high costs of experimentation. IT may be a commodity, and its costs may fall rapidly enough to ensure that any new capabilities are quickly shared, but the very fact that it is entwined with so many business functions means that it will continue to consume a large portion of corporate spending. His invention of the microprocessor spurred a series of technological breakthroughsdesktop computers, local and wide area networks, enterprise software, and the Internetthat have transformed the business world. Even the way the technology is used begins to become standardized, as best practices come to be widely understood and emulated. Nicholas Carr, Harvard Business Review, 2003. Worrying about what might go wrong isn’t glamorous, but it’s smart business now. Others, like Reuters with its 1970s financial information network or, more recently, eBay with its Internet auctions, had superior insight into the way IT would fundamentally change an industry and were able to stake out commanding positions. At the same time, the buildout forces users to adopt universal technical standards, rendering proprietary systems obsolete. Consider electricity. Big hardware and software suppliers have become very good at parceling out new features and capabilities in ways that force companies into buying new computers, applications, and networking equipment much more frequently than they need to. But as their availability increased and their cost decreased—as they became ubiquitous—they became commodity inputs. When the Harvard Business Review HBR published IT Doesnt Matter in May 2003, the point. You only gain an edge over rivals by having or doing something that they can’t have or do. IT Doesn’t Matter Nicholas G. Carr Is Silence Killing Your Company? The bulk of what’s being stored on corporate networks has little to do with making products or serving customers—it consists of employees’ saved e-mails and files, including terabytes of spam, MP3s, and video clips. Companies can also steal a march on their competitors by having superior insight into the use of a new technology. (See the sidebar “New Rules for IT Management.”). Delay IT investments to significantly cut costs and decrease your risk of buying flawed or soon-to-be obsolete equipment or applications. He also clarifies that he does not mean that information itself doesn’t matter, nor does he mean that the people using the technology don’t matter. From a strategic standpoint, they became invisible; they no longer mattered. A distinction needs to be made between proprietary technologies and what might be called infrastructural technologies. They do, but their influence is felt at the macroeconomic level, not at the level of the individual company. Imagine yourself in the early nineteenth century, and suppose that one manufacturing company held the rights to all the technology required to create a railroad. Industrial manufacturer may discover an innovative way to employ a process technology that competitors find hard imagine... What are the 5 reasons Nicholas Carr IT Does n't Matter what these early dont... 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