The Hindu Business Line : Does IT matter? The debate is hotting up

DOES IT matter? The third Regional Infocomm Conference 2004 got off to an unusual start here on Monday with an animated discussion on this simple question. Pitted against an army of information technology experts was independent writer Mr Nicholas Carr, whose book Does IT Matter? has been termed as "blasphemous" by the techies.

But Mr Carr, former editor of the Harvard Business Review, held his ground, describing IT as an "infrastructural technology" akin to the railways and electricity supply that is simply a tool to be used by businesses to offer better products and services to their customers.

"IT is fast becoming a ubiquitous technology. Most business enterprises use IT now and it has become almost as important as electricity. Used in the right way, it can boost a company's productivity," Mr Carr said. At the same time, organisations run the risk of "over investing" in IT, he said.

"IT is fast becoming commoditised, which means it is more standardised and uniform. That translates into lower prices and thus, there should be no need for companies to be on the cutting edge of technology unless they are very clear that they can derive sufficient advantages from their investments," he said.

The process of commoditisation, Mr Carr said, started with hardware, and now even software was largely getting standardised. "Producing software is very expensive, but it costs nothing for it to be shared. It has to be shared to achieve economies of scale. There was a time when companies profited from innovation in IT services. But now, most processes are available as standard packages," he pointed out.

Mr Carr's advice to chief technology officers (CTOs), who he believes will be as anachronistic as chief electricity officers or chief railroad officers of companies, is also rather simple. "Spend less, don't make an effort to lead if you can be better off as a follower, innovate when risks are low and focus more on vulnerabilities than on opportunities."

While that might sound music to many organisations who realise that they have made huge investments in IT simply because they got sold on the perceived advantages that it would bring, experts from the field strongly disagree with Mr Carr's views.

Mr Philip Lay, Managing Director of IT consulting firm TCG Advisors, sought to highlight "the power of IT when it really matters" by citing examples of companies that have used information technology to stay ahead of their rivals.

What Amazon did in five years took Walmart 30 years, American Airlines' Sabre reservation system helped the airline stay ahead of competition, BMW is using IT extensively to optimise its designing and stay more competitive and IBM is saving $3 billion through outsourcing and process improvement, Mr Lay said.

Taking a dig at Mr Carr, he said his response to customers depends on what they want. "If you are a visionary customer, ignore Mr Carr and invest. If you are a pragmatic customer, invest in solutions that solve a chronic or severe business problem and simply to stay abreast with competition. If you are a conservative customer, invest later, just to catch up. And if you are a skeptic, don't invest, just keep telling the world that this IT stuff will never work, he said."

But Mr Carr was unfazed. When a delegate said that if IT was like a paint-brush, which is so widely available, why could everyone not be a Michael Angelo, he replied: "Do you want to be a paintbrush investor? Is the paintbrush strategic to your business? IT should not be for IT's sake. Innovate in your business, not in IT. IT should just be a tool to enhance your business, not your focus area," he said.

Surely a thought that must engage companies.