It In Management Essay

5620 words - 23 pages

A CRITICAL REVIEW OF NICHOLAS CARR'S "IT DOESN'T MATTER"

STUDENT 1D: 07066996
Brief outline for this coursework

Nicholas Carr's article "IT doesn't matter" (2003) still continues to be controversial even though it was published five years ago.

Even now, it is still hard to find people who either agree or disagree with his views in their entirety. Most of his critics concur

with him to the extent that IT has become ubiquitous but think his article was faulty since it emphasised the possession of IT

rather than its utilisation and management.

This paper begins by reviewing Carr's article and summarising it. It goes on to examine the strengths and weakness of the article ...view middle of the document...

He arrived at this conclusion by

looking at industry statistics and by comparing IT-intensive organisations to those that were not. He realised that the

organisations that had large IT investments in previous years did not increase in productivity in any measurable way over those

that did not.

But technology is not something that always has an immediate effect or works right away thereby improving productivity in a

fantastic way (Dans, 2003). Recent documented experiences with IT investments have shown that they can be hard to

implement, may require big changes in training, mentality and even complete redesign of processes in order to generate profits.

Strengths of Carr's arguments

Carr's definition of IT focuses mainly on the technology component for which the three technology laws apply (Metcalf's law,

Moore's law and Gilder's law). Carr's arguments on the development of proprietary systems by organisations no longer being

advantageous also holds true to the extent that unless it is a core competence of the organisation, it may be better to buy IT as

an off the shelf solution. Grant (2003) supports Carr's position in this regard by pointing out that an organisation that develops a

proprietary technology to create differentiation and barriers to entry for competitors may not realise any long-term advantage

due to the increasing ubiquity of IT.

The emergence of IT use in organisations was in the areas of production efficiencies, rapid information exchange and

meaningful staff reductions. Smith, (2004), points out that IT used in this way provided a competitive advantage for the early

adopters but this is no longer the case as the use of IT in this manner has become the norm in most organisations. Figure 1

shows the change in the level of competitive advantage enjoyed by early adopters over a period of time. Early adopters have

already reaped the majority of the advantages offered by IT as shown in Figure 2

Figure 1: Poisson distribution for competitive advantage (Kimber, 2005)

Figure 2: S-curve of ubiquity vs. Z-curve of advantage (Carr, 2004)
Basic transaction processing has crossed the second knee in the S curve and is a mature technology around the world. Powerful

computing and communications technologies are accessible to most organisations and skilled personnel required for

implementation and maintenance are also available (Smith, 2004). Therefore the use of IT in back office applications such as

transaction processing may have lost its power in providing any type of advantage.

The growth in outsourcing of IT supports Carr's view of it being a commodity. Any operation/function that is outsourced is one

not considered strategic by an organisation (Bannister and Remenyi, 2005). The power of most PCs today is more than enough

to meet existing organisational needs. The same holds true for software with organisations becoming increasingly...

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