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Monday, August 23, 2004

Does IT Matter?

This argument has been going on for some time now. Most people in IT (Bill Gates, Scott McNealy, etc...) just scoff it off as the most ridiculous thing they have ever heard. But I actually think Carr is on to something.

Don't get me wrong, IT DOES matter. In fact, I think it is the single most important thing for the majority of companies in the world. Well, actually I think the most important things are customer bliss (who wants satisfaction?), employee recruitment / retention, and IT - in that order. ...but having world class IT helps in the first two areas.

So why do I think Carr is on to something? Because businesses suck at IT. IT - as it is currently implemented in a lot of companies - is not a competitive advantage but a "cost of playing the game". If every company in the world installs SAP, then what competitive advantage does installing SAP provide? In this respect, I believe Carr and I would be in agreement.

But it doesn't have to be that way. Indeed at some point in the future it WILL not be that way. Technology is playing an increasing roll in business. What percentage of your company is run by IT? To say it another way, if all computers went away tomorrow, how many extra people would your company need to hire? 50% increase? 75% increase? Whatever the number is, it is only going up.

It is absolutely nonsensical to me to deny this. And once you have accepted it the importance on IT becomes crystal clear - IT IS the business. More and more every company on the planet is becoming a software company.

So, does IT matter to a software company? Does IT provide a competitive advantage for Microsoft?


My point is this: Carr is right in that most companies are not gaining a competitive advantage through IT. ...but he is wrong in suggesting that this is anything other then a situation caused by a mass realisation of the importance of IT combined with massively ignorant / unimaginative / incompetent management.

If your IT department is not providing you with a competitive advantage then you are doing it wrong. The guy who is doing it right is going to put you out of business.

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