Living Bibliography

Does IT Matter?: Information Technology and the Corrosion of Competitive Advantage

Nicholas Carr

“In May 2003, I published an article entitled “IT Doesn’t Matter” in the Harvard Business Review. Described as “the rhetorical equivalent of a 50 megaton smart bomb” by one newspaper, the article challenged the conventional wisdom that information technology has become increasingly important as a strategic weapon in business. In fact, I argued, IT is becoming less and less important to business strategy as it becomes more powerful and more widespread. Some of the leading figures in the technology industry quickly attacked the article. Microsoft CEO Steve Ballmer dismissed it as “hogwash,” while Hewlett-Packard CEO Carly Fiorina called me “dead wrong.” But the debate over my ideas only intensified as the year progressed, with articles appearing in publications as diverse as the New York Times and Fortune, BusinessWeek and Newsweek, the Washington Post and CIO.

“In Does IT Matter? Information Technology and the Corrosion of Competitive Advantage, I offer a broader and deeper analysis of the role of IT in business and commerce. Taking into account the myriad responses to the original article, both positive and negative, I examine the particular technological, economic, and competitive characteristics of computer and communications hardware and software that guide their evolution and determine their fate. Through a series of historical and contemporary examples, I show how these characteristics combine to push all new IT innovations to rapidly become part of the shared business infrastructure, neutralizing their ability to provide competitive advantage to any one firm.

I also discuss the practical implications for how companies approach IT management, laying out a new framework for assessing potential IT investments based not only on their likely return on investment but also on the competitive responses they’re likely to engender. Business and technology managers will come away from the book with a fresh and coherent perspective that will help them make sense of – and derive real value from – the enormous sums of money they devote to information technology. The time has come, I argue, to apply real discipline to IT management, to turn the IT infrastructure into a stable, efficient, and reliable foundation for running a business.

“Beyond IT management itself, the book also examines the influence of the new IT infrastructure on other traditional sources of competitive advantage. Again taking issue with the common wisdom, I will show that many of the current assumptions about process automation, outsourcing, partnering, and virtual business are simplistic and dangerous. Companies that act on the assumptions are more likely to destroy advantage than create it.

“Given the world economy’s heavy reliance on information technology, I believe these are subjects of importance to everyone. I have therefore written the book in straightforward prose, avoiding the jargon that makes much of the current writing on computer systems dense and obscure. I think anyone who buys, sells, manages, or uses IT – or invests in companies that do – will find the book invigorating and useful. I hope you’ll agree.”

– Nicholas G. Carr