Does IT Matter?Introduction By Thomas StewartSlide 3Brown & Hagel RebuttalSlide 5Slide 6Slide 7Slide 8Slide 9McFarlan & Nolan RebuttalSlide 11Slide 12Slide 13Strassman RebuttalSlide 15Slide 16Broadbent, McDonald, & Hunter RebuttalSchell's RebuttalSlide 19Does IT Matter?Does IT Matter?Introduction By Thomas Introduction By Thomas StewartStewart►notes that there are 3 perineal itemsnotes that there are 3 perineal itemsnew ideasnew ideastruths (that should not be forgotten)truths (that should not be forgotten)disputesdisputes►Carr started a disputeCarr started a dispute►IT expenditures grew to almost 50% of IT expenditures grew to almost 50% of corporate capital spending by 2000 and corporate capital spending by 2000 and then collapsed -- why?then collapsed -- why?►the article does not say IT is dead or the article does not say IT is dead or that IT will not continue to be a source that IT will not continue to be a source of dramatic, transformational changeof dramatic, transformational change►the article does say that IT is becoming the article does say that IT is becoming a commodity and that commodities are a commodity and that commodities are known to have little known to have little strategicstrategic impact impactBrown & Hagel RebuttalBrown & Hagel Rebuttal►Carr is right, businesses overestimated the Carr is right, businesses overestimated the value of ITvalue of IThow and why?how and why?►Carr is right, the critical nature of IT on daily Carr is right, the critical nature of IT on daily business requires managers to become business requires managers to become more focused on vulnerabilitiesmore focused on vulnerabilitieswhat do most managers know about the what do most managers know about the vulnerabilities and risks?vulnerabilities and risks?what strategies have managers used -- why is what strategies have managers used -- why is outsourcing a problematic response?outsourcing a problematic response?►where is Carr incorrect?where is Carr incorrect?IT, by itself, never was the competitive IT, by itself, never was the competitive advantage -- its advantage came by enabling advantage -- its advantage came by enabling innovative business processes and practices innovative business processes and practices (they reference the McKensey Global Institute (they reference the McKensey Global Institute study and there are many more)study and there are many more)►six of the 59 studied industries showed significant six of the 59 studied industries showed significant positive productivity correlated to IT investment while positive productivity correlated to IT investment while 53 were negligible improvement53 were negligible improvement►why? the advantage of the 6 'pulled' the other 53 to why? the advantage of the 6 'pulled' the other 53 to respond -- they did not reap significant benefits because respond -- they did not reap significant benefits because they were responders instead of innovatorsthey were responders instead of innovators►Carr was incorrect in counting only the Carr was incorrect in counting only the impact of the cost of data storage, impact of the cost of data storage, processing, and transmissionprocessing, and transmissionimpact of business practice changes such impact of business practice changes such as distribution changes ala Wal Martas distribution changes ala Wal Martimpact of team/community solutions impact of team/community solutions made available via networksmade available via networksrelaxing the necessity of problem solvers relaxing the necessity of problem solvers being proximate to solve problemsbeing proximate to solve problems►IT impact has been more incremental IT impact has been more incremental than 'big bang' even though popular than 'big bang' even though popular media (and many business publications) media (and many business publications) only address the 'big bang'only address the 'big bang'the 'big bang' applications are high risk, they the 'big bang' applications are high risk, they are more likely to fail spectacularly than to are more likely to fail spectacularly than to succeedsucceed'bolting on' applications (such as CRM) has 'bolting on' applications (such as CRM) has been much more profitable but less been much more profitable but less glamorousglamorous►IT impact continues to growIT impact continues to growMoore's Law has continually defied the Moore's Law has continually defied the experts by doubling power every 18 experts by doubling power every 18 months for a constant pricemonths for a constant pricethat did not happen with Carr's examples that did not happen with Carr's examples of steam engines, electricity, railroads, of steam engines, electricity, railroads, and telephonesand telephones►managers buying IT did not pay attentionmanagers buying IT did not pay attentionthought solutions to problems was in the thought solutions to problems was in the buyingbuying of IT and not in the of IT and not in the usingusing of IT of ITdid not buy the skilled labor to use the ITdid not buy the skilled labor to use the ITIT is a long term practice, not a short term fixIT is a long term practice, not a short term fixIT is a means to an end, not the end itself IT is a means to an end, not the end itself (remember the selling or ERP systems for (remember the selling or ERP systems for Y2K)Y2K)IT has little value as a stand alone asset, there IT has little value as a stand alone asset, there is great value in marrying it to other assets in is great value in marrying it to other assets in the businessthe businessMcFarlan & Nolan RebuttalMcFarlan & Nolan Rebuttal"In no other area is it more important to "In no other area is it more important to have a sense of what you have a sense of what you do n'tdo n't know know than it is in IT management. The most than it is in IT management. The most dangerous advice to CEOs has come dangerous advice to CEOs has come from people who either had no idea of from people who either had no idea of what they did not know, or from those what they did not know, or from those who pretended to know what they didn't. who pretended to know what they didn't. Couple not knowing that you don't know Couple not knowing that you don't know with fuzzy logic, and you have the with fuzzy logic, and you have the makings of Nicholas Carr's article."makings of Nicholas Carr's article."►when McFarlan and Nolan talk about the when McFarlan and