NEW RULES FOR A NEW AGE

As we were writing this chapter, we noticed an interesting article in the Harvard Business Review entitled ‘IT doesn’t matter’ (Carr, 2003). The writer suggested that IT is an infrastructure technology, rather than a leading edge one. This means that it is no longer a scarce resource that can give an organization an important competitive edge. It is now readily available at less cost, but companies are still investing.

For the last 25 years companies have been investing in IT systems to the point where they are now firmly built into the infrastructure of commerce. Compare this with the progress of the railway, or the electricity generator. At certain points during this progression there have been moments when companies have gained a competitive advantage from being the first to implement a particular technology; however this is now starting to level off, and so should investment plans.

The three new rules for IT management offered by Carr give some guidelines for those ready to review their IT investment strategy:

• Spend less. Carr says that companies with the biggest IT investments rarely post the best financial results. The focus should now be on ensuring that you do not put your company at a cost disadvantage, because the competitive gains will be minimal.

• Follow, don’t lead. The longer you wait to buy IT systems, the more you will get for your money. Carr says that it is unwise to be on the cutting edge, with the possibility that software or hardware is unproven.

• Focus on vulnerabilities, not opportunities. Companies need to pay more attention to security and network vulnerabilities, as well as systems reliability and minimizing downtime. IT spend should be carefully controlled, and resources managed in an economic way.