it doesn't matter case study

Nicholas Carr

It doesn’t matter.

In this article, published in the May 2003 edition of the Harvard Business Review, I examine the evolution of information technology in business and show that it follows a pattern strikingly similar to that of earlier technologies like railroads and electric power. For a brief period, as they are being built into the infrastructure of commerce, these “infrastructural technologies,” as I call them, open opportunities for forward-looking companies to gain strong competitive advantages. But as their availability increases and their cost decreases – as they become ubiquitous – they become commodity inputs. They may be more essential than ever to society, but from a strategic business standpoint, they become invisible; they no longer matter. The staff of HBR voted “IT Doesn’t Matter” the best article to appear in the magazine during 2003.

This article provides a small part of my broader exploration of information technology and business strategy contained in the book Does IT Matter? Information Technology and the Corrosion of Competitive Advantage , published by the Harvard Business School Press. You can read the full text of “IT Doesn’t Matter” on my blog . The following list of reactions to the article was compiled in 2003 and 2004. Many of the links, unfortunately, have become broken over the ensuing years.

responses to article

“Carr’s article just won’t stay debunked.” – Bob Metcalfe

“IT Doesn’t Matter” was featured in a major article on the IT industry by Steve Lohr in the May 4 Sunday New York Times. The article was reprinted on May 5 in the International Herald Tribune.

Computerworld’s May 12 issue features an interview with me as well as a rebuttal of my article.

Information Week’s editor in chief, Bob Evans, provides another counterpoint to my article in that magazine’s May 12 issue. He also says, “The article is thoughtful and sweeping and quite interesting to read. I’d heartily recommend it.”

Stewart Alsop mentions “IT Doesn’t Matter” in his column in the May 12 edition of Fortune.

A somewhat testy Craig Barrett, Intel’s CEO, “fired back” at my article in remarks to reporters before a May 15 analysts meeting, arguing that the IT infrastructure is critical to competitiveness. Judging from his comments, I’m not sure Mr. Barrett actually read the article (I don’t blame him; I’m sure he’s busy). As I make clear in the piece, the IT infrastructure is indeed essential to competitiveness, particularly at the regional and industry level. My point, however, is that it is no longer a source of advantage at the firm level – it doesn’t enable individual companies to distinguish themselves in a meaningful way from their competitors. Essential to competitiveness but inconsequential to strategic advantage: that’s why IT is best viewed (and managed) as a commodity.

Steve Lohr has another excellent article on the prospects of the tech industry in the May 16 New York Times ( reprinted in the International Herald Tribune). He features my article as well as Craig Barrett’s remarks on it. He makes two critical points that are sometimes being lost in the current debate: “. . . it is possible to agree that technology can deliver broad productivity gains without necessarily delivering higher profits or competitive gains for individual companies, a point made by Mr. Carr. It is also possible to agree that the technology industry continues to be innovative and important, without also accepting that it will be a growth industry as it has been in the past.”

John Hagel and John Seely Brown have written a response to my article, saying that it “will have a significant impact in the business world” (but that it’s “also dangerous”).

General Motors CIO Ralph Szygenda offers some thoughtful comments on my article in the May 19 Information Week. He says, “Nicholas Carr may ultimately be correct when he says IT doesn’t matter . . . [but] business-process improvement, competitive advantage, optimization, and business success do matter and they aren’t commodities. To facilitate these business changes, IT can be considered a differentiator or a necessary evil. But today, it’s a must in a real-time corporation . . . I also agree on spending the minimum on IT to reach desired business results. Precision investment on core infrastructure and process-differentiation IT systems is called for in today’s intensely cost-conscious business versus the shotgun approach sometimes used in the past.” I find it interesting, and perhaps telling, that while my argument has certainly raised the hackles of IT vendors, consultants, and pundits, most of the actual IT executives I’ve heard from have expressed genuine interest in and considerable agreement for my point of view.

Computerworld takes another whack at the article in its May 19 issue: “You can get real business advantage with technology. You just don’t get it from products, services and information. You get it from processes, skills and execution – the same things that let any business differentiate itself in ways that don’t involve IT.” So you can get advantage from technology, but not actually from the technology. Okay. I can live with that.

eWeek has published a brief article on “IT Doesn’t Matter.”

Various IT research houses have issued comments on my article: Gartner , Alinean , Peerstone .

Bill Gates “assailed” my article in a speech at Microsoft’s CEO Summit on May 21, saying, “And so when somebody says, to take the extreme quote from the Harvard Business Review article, they say IT doesn’t matter, they must be saying that with all this information flow, we’ve either achieved a limit where it’s just perfect, everybody sees exactly what they want, or we’ve gotten to a point where it simply can’t be improved – and that’s where we’d object very strenuously.” Just to be clear, what the article argues is that we’re at the point where any technological improvement in the management of information will be quickly and broadly copied, rendering it meaningless for competitive advantage.

USA Today has a smart piece in its May 22 edition that examines the different competitive approaches of IBM and Dell through the lens of my article.

Information Week has posted a brief article titled “CIOs Sure Think IT Matters.” It quotes the CTO of General Motors saying, “Brakes are a commodity, but I don’t think anybody would say they don’t matter.”

David Kirkpatrick, a tech writer at Fortune, has launched a spirited, but glancing, attack on my article. Kirkpatrick first offers a convenient misreading of my argument, claiming that it deals only with hardware rather than with both hardware and software (not true at all), and then uses that as a platform for some furious verbal hand-waving. Of course hardware doesn’t matter, he says, and then quotes a Microsoft executive: “the source of competitive advantage in business is what you do with the information that technology gives you access to.” Yes, but how companies use the information they collect – about markets, operations, money flows, etc., etc. – has always been a potential source of advantage, or disadvantage. (The same could be said of the way they use electricity.) Making such a point isn’t particularly interesting, but it does enable you to neatly sidestep the issue of IT commoditization. [Note that Fortune is now charging for access to its archives. Thanks to those AOL TimeWarner synergies, however, you can still read this piece for free over at CNN.com .]

Adam Lashinsky, another Fortune writer, contrasts my argument with Kirkpatrick’s in a piece on the CNN/Money website. Lashinsky concludes: “As in any good intellectual debate, both writers make good points. Carr is accurately describing the technology world in the post-bubble era. Kirkpatrick proves that innovation isn’t over yet. My hunch is that prudent investors, however, will side with Carr.”

A thread of messages on “IT Doesn’t Matter” has begun to unspool on ZDNet. It’s noteworthy only because it includes the first airing, to my knowledge, of a conspiracy theory regarding the origins of my article. “In all likelihood,” the poster writes, “it’s a group of rich individuals with similar interests in keeping IT wages down that not only had a hand in the HBR article in the first place, but also a hand in making sure references to it appeared in the NYT.” My lips are sealed.

In the May 29 Washington Post, Leslie Walker takes an insightful look at my article and the controversy it’s stirred up. She concludes: “Carr may be early in calling this a turning point for the industry — for some companies, there probably still is strategic value left to be squeezed out of clever implementation of information technology. But the elbow room for seizing sustainable leads through technology is clearly diminishing as standards proliferate and computing power accelerates.”

David Ticoll takes issue with some of my conclusions in the May 29 edition of the Toronto Globe and Mail.

In Australian IT, a Gartner vice president offers a somewhat meandering rebuttal of my article under the melancholy title “Dousing the Embers of Hope.” In response to my suggestion that, when it comes to investing in new information technologies, companies would often be smarter to be followers rather than leaders, he counters with this: “Without those individuals who have courage and conviction to lead the rest of us, where would humankind be?”

Dan Farber provides a useful summary and critique of my argument at ZD Net.

Chad Dickerson calls my article a “must-read” in InfoWorld, saying, “You know what? Carr is right and IT staff should take heed.” He goes on to examine some staffing implications .

On June 2, National Public Radio’s Marketplace featured a lively segment on “IT Doesn’t Matter,” comparing the article to (I’m not kidding) Martin Luther’s 95 Theses. (Requires RealPlayer.)

Another Microsoft executive had a go at the article in a June 2 speech at the Tech.Ed conference in Dallas. “I have access to golf clubs,” he reportedly said, “but I am not Tiger Woods.” And even if he upgrades those clubs every year, he will still not be Tiger Woods.

The CEO of a software vendor cites the article in an eWeek interview. Another eWeek piece, by Lisa Vaas, summarizes the article and reports on reactions to it. “Much of the [article’s] premise makes sense to the enterprises that consume technology,” Vaas writes.

Jimmy Guterman asks me three questions in Health-IT World.

The Fortune tech writer David Kirkpatrick squeezes another column out of my article by reporting on the responses he’s received to his earlier column. The most telling quote comes from the CEO of a software company that, Kirkpatrick tells us, “builds sophisticated software for collaboration.” Says this CEO: “We just closed several deals with leading Fortune 100 companies using our software to differentiate their ability to get vast international sales and marketing ecosystems working together to respond faster and more correctly to customers. This is not a ‘me too!'” But if he’s already sold the same system to “several” Fortune 100 companies, one has to wonder how differentiating the technology really is. It’s difficult to purchase competitive advantage from an outside supplier who’s peddling the same “advantage” to your peers.

The lead article in the Financial Times’ special section on IT in the June 4 edition contains a reference to “IT Doesn’t Matter.” The article, “Corporate Computing Tries to Find a New Path,” is well worth reading, though it does require a subscription to FT.com.

Steve Ballmer weighs in in a memo to Microsoft employees.

The Harvard Business School features two excerpts of my article on its Working Knowledge site.

The Guardian (London) features an evenhanded review of my article and responses to it in its June 12 edition.

The Harvard Business Review has released a 17-page compilation of letters about “IT Doesn’t Matter.” It’s a free download .

Mike Langberg discusses my article in a column in the June 16 San Jose Mercury News . He calls the article “thought-provoking and well worth reading” and examines Oracle’s proposed takeover of PeopleSoft in light of my argument.

George Colony, CEO of Forrester Research, uses the felicitous image of CIOs stomping on icebergs in arguing that while the bulk of IT no longer matters, a little bit still does.

Scott Leibs offers an interesting take on my article in the Summer edition of CFO magazine’s IT supplement.

In the June 16 Information Week, Jeffrey Kaplan pens a perceptive article on how the tech business may change as IT commoditization continues. It opens with a reference to my article: “[Carr’s ‘IT Doesn’t Matter’] sent shockwaves through the technology world as vendors and consultants scampered to refute his suggestion that commoditization had made technology irrelevant. Noticeably silent in this debate have been business executives who grew tired and impatient with technology long ago. While they haven’t spoken out, their changing buying behavior says loud and clear that Carr’s arguments are more on target than the IT industry is willing to believe.”

The June 23 New York Times has a third article by Steve Lohr examining the prospects for the IT industry, again featuring an extensive discussion of my article and the reaction to it. The article also appears in the Tuscaloosa News .

Val Souza, editor of India’s Express Computer , discusses “IT Doesn’t Matter” in the June 23 issue.

Mohan Babu uses my article as a jumping off point to discuss IT professionals’ career strategies as IT becomes a commodity.

Paul Andrews writes on my article in the June 23 Seattle Times , noting, “Even as their words reject Carr’s thesis, industry leaders’ actions seem to be proving him out.”

A Fortune article on the prospects for Silicon Valley mentions my article. “The seeds to the next boom,” it says, hopefully mixing metaphors, “are being sown now.”

Baseline features some comments from me in an article on CIO pay .

Fortune’s tech writer David Kirkpatrick once again misreads my argument at the end of a sentimental column comparing Larry Ellison and Steve Jobs (two executives leading very different companies competing in very different markets with very different strategies).

Calling “IT Doesn’t Matter” “the rhetorical equivalent of a 50-megaton smart bomb,” Mark Anderson examines the reaction from Canada in a long piece in the June 26 Ottawa Citizen.

Cisco Systems has issued a response to my article by its CIO, Brad Boston . He claims that “IT is becoming a more powerful tool for gaining competitive advantage, not less so.” But he also admits that “Wal-Mart, Amazon, eBay, and other great companies didn’t succeed because their information technology was better than others. Their vision was.”

A thread on Slashdot discusses “IT Doesn’t Matter,” with one poster writing of the article: “It makes a number of points that I think most of us on Slashdot wish were more widely understood. I think most of us here want IT to be recognized as critical infrastructure. This is where conservative arguments in favor of open source, standardization, interoperability, and security really start to come together. It’s a field for pragmatic professionals, rather than the uncritical promotion of gee-whiz product features.”

It’s Monday (July 7), and that means a new round of stories in Computerworld , eWeek , and Information Week . The Computerworld piece, titled “IT Does So Matter!,” features comments by Rob Austin, Andrew McAfee, Paul Strassman, and Tom DeMarco. Strassman at one point says: “Right now only the CFO can go to jail. My hope is for the CIO of the future to be also eligible to go to jail.”

Microsoft’s Paul Flessner discusses “IT Doesn’t Matter” in a CNET interview. He says: “It’s just silly to think that there’s no competitive advantage to be made in IT. It’s insanity in my mind .”

Steve Steinke, editor in chief of Network Magazine, surveys reactions to my article in his column in the latest issue. “There are a handful of thoughtful comments,” he writes, “but I saw no sign of telling rebuttal from any of the detractors.” He concludes: “The article doesn’t say that IT spending ought necessarily decline, that high performing IT organizations aren’t necessary for competing successfully, or that it’s impossible to gain competitive advantage with IT. Some commentators apparently read these things into it, but the real argument is harder to attack successfully. I find the overall piece, if not the title, to be fundamentally persuasive and not simply provocative.”

John Taschek also offers a strong defense of my argument in the July 14 eWeek. He writes: “I’ll bet that plenty of the article’s critics have not read it. Industry partisans who have read it but can’t accept much of it as true are either awash in denial or so obsessed with self-preservation that they’re blinded to facts.”

CNET makes a passing reference to my article in a piece on Google.

The powers-that-be at Microsoft continue to chew on “IT Doesn’t Matter.” At the company’s July 24 financial analysts meeting, Steve Ballmer said, “Our fundamental response to that is: hogwash . We look out there like kids in a candy store saying what a great world we live in,” while Bill Gates put it this way: “We disagree with all of this. We fully acknowledge the harsh realities . . . [but] there are solutions to every one of those things.”

Michael Schrage lambastes my argument in the August issue of CIO Magazine, although it appears that he failed to read beyond the first couple of pages of my article. Schrage claims that I say that “the quality of management matters far less than the quantity of the commodity,” but that, of course, is exactly the opposite of what I say. Indeed, by the end of his piece, Schrage ends up circling around to confirm my essential thesis. I assume this is, by the way, the same Michael Schrage who recently wrote that in many markets “information has become so plentiful that it has become commoditized and marginalized” and who also recently said that “there is no correlation at all between innovation and profitability. Anybody who thinks there’s a correlation between innovation and profitability doesn’t understand innovation and doesn’t understand profitability.”

Robert Weisman examines my article and the “bitter response” to it from some in the IT industry in an article in the August 3 Boston Sunday Globe.

In the August 4 Wall Street Journal, Lee Gomes mentions “IT Doesn’t Matter” in a perceptive article (requires subscription) on the recent mini-boom in tech stocks. Writes Gomes: “Many captains of the tech industry criticized the HBR piece, describing it almost as an affront to the very idea of human progress. Many common folks in Silicon Valley, however, have become comfortable with the idea that technology has entered a mature, slow-growing phase. Their attitude is like that of a gifted child who is forever being pressured into excelling, but who wants nothing more than to be ordinary.” ( Reprinted in the Contra Costa Times.)

Business Week features an extended interview with me in its August 18-25 special issue on The Future of Technology . “IT Doesn’t Matter” is also discussed in several other articles in the issue. It’s a good issue, even if all the usual suspects say the usual things.

Carly Fiorina says I’m “dead wrong” in her keynote speech at HP World on August 12. More interesting, though, is her blunt attack on Dell and IBM: “Dell is low cost but with low technology . . . IBM—they are high-tech but they are also high cost . . . IBM [provides] fairly mediocre total customer experience.” It’s interesting how the CEOs of top business IT providers have begun to publicly slam their competitors. It’s turning into the kind of mud fight you get in commodity businesses.

Samy Mosimann discusses my article in the Swiss journal IBcom .

Industry Week’s September 1 issue has a column on “IT Doesn’t Matter.”

Erin Joyce writes on my article and the controversy surrounding it in Internet News .

Isaac Cheifetz says “IT still matters” in an article originally appearing in the Minneapolis Star Tribune.

James Morris, dean of the School of Computer Science at Carnegie Mellon, chimes in an article in the Sept. 7 Pittsburgh Post-Gazette.

Also on Sept. 7, Jeff May mentions my article in a piece on the tech industry’s crisis of confidence in the New Orleans Times-Picayune.

Lou Bertin discusses my “incendiary” article in the Sept. 8 Information Week. It’s “ the vision thing ,” he contends.

Although there has been a great deal of reaction to my article from IT managers and the IT industry, there have been relatively few public comments from business managers. It’s particularly noteworthy, therefore, to see Tony Comper, the chairman and CEO of BMO Financial Group, one of the largest North American financial services companies, discuss my article and the current IT landscape in a wide-ranging and often eloquent speech at the IBM Global Financial Services Forum on Sept. 8 in San Francisco. At one point, he addresses my much-debated contention that “IT’s power is outstripping most businesses’ needs.” Here’s what Comper says: “Let’s think about that for a moment. I’d hazard an educated guess that the vast majority of the two main end-users in my organization – customers and employees – actually utilize about 20 per cent of their computing capabilities (and I’m being generous here). The rest of the investment is mostly wasted. . . . This leads to a greater truth about IT in 2003, which is that like most A-list organizations, BMO Financial Group has just about all the basic technologies we need to successfully compete right now.” Highly-recommended reading for anyone interested in the general manager’s viewpoint.

Also in San Francisco, Intel’s Craig Barrett again responds to my article in remarks at the Oracle World conference on Sept. 10. He talks broadly about IT’s ability to provide business benefits (which no one debates) while sidestepping the issue of whether those benefits can form the basis for a competitive advantage or whether, as I argue, they become rapidly shared by all companies. Apparently, he also rode around the stage in a Ford concept car .

Peter Hind writes a concise summary of my argument and the counterarguments in the Sept. 9 edition of CIO Australia.

My debate with Scott McNealy and Bill Gurley, moderated by Stewart Alsop, at the SunNetwork conference on Sept. 18 can be viewed at Sun’s site (scroll down). The discussion was covered by the San Francisco Chronicle , San Jose Mercury News , and InfoWorld .

“If you read one thing this year, make it Carr’s article.” So counsels the Global IT Services Report in its July issue (print only).

Information Week mentions “IT Doesn’t Matter” in an article on IT budgets in its Sept. 22 issue.

General Electric CEO Jeffrey Immelt appears to have touched on my article in a Sept. 25 speech at MIT, terming “stupid” the idea that now that “everyone has information technology it is a waste of money.” I actually agree with him about that. Although companies have wasted a great deal of money on IT, continued investment in IT will remain a competitive necessity even if it doesn’t provide a competitive advantage. The key now, as I explain in the article, is to make sure that the future investment isn’t wasted.

Meanwhile, in Europe, Pedro Navarro discusses my article in Actualidad Economica , a leading Spanish business journal; Pierre Lombard offers a contrary view in France’s JDNet ; Billy McInnes supports my argument in Ireland’s Business World ; Jorge Nascimento Rodrigues looks at both sides of the issue in a piece for a Portuguese business site; Serdar Turan examines my article in Turkey’s Infomag ; and the Holland Management Review features my article in its September-October issue.

Gary Flood examines my article and the reaction to it in a Sept. 29 piece in Accountancy Age . Rebutting the “knee-jerk” responses of some critics, he says “a reading of the nine-page piece shows careful research, effective marshalling of figures, convincing use of historical parallels and a refreshing sense of ’emperor’s new clothes’ truth-telling.”

Dan Farber offers a smart and balanced take on the “IT Doesn’t Matter” debate in a Sept. 30 article at ZDNet. Highly recommended.

Jack McCredie, CIO of the University of California at Berkeley , says that “at least in higher education, IT certainly matters.”

I’m quoted at the end of Dean Takahashi’s Oct. 3 San Jose Mercury News article on Merrill Lynch’s criticism of Sun Microsystems.

Believe it or not, an entire book has now been written in response to my eight-page article.

In a long and notably lucid essay in the Australian edition of CIO magazine, Tim Mendham corrects some of the mischaracterizations of my argument and provides an incisive reading of the reactions to it. Toward the end of the piece, he writes, “There is an element of fanaticism and over-protectiveness in some of the responses, particularly as so many seem to indicate clearly either they have not read the article or they did not understand it. There are reasoned responses that do not rely on knee-jerk defensiveness, anti-outsider prejudice or self-serving position-selling, but these all tend to come back to the same “it’s the way that you use it” argument: it’s all about strategy and people, which are, of course, technology-reliant but should not be technology-driven.”

Kevin Francis, CEO of CenterBeam, examines my article and the state of corporate IT in an October 28 article on CNet. He concludes: “F. Scott Fitzgerald wrote, ‘The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.’ As we watch the mentally vapor-locked IT pundits continue to splutter and fume and blast Carr’s article, it’s painfully clear they are unable to pass Fitzgerald’s test.”

Forrester’s Jean-Pierre Garbani mentions “IT Doesn’t Matter” in an October 30 interview on SearchNetworking.com.

An article on the Taiwan server market mentions my article in the October 31 Taipei Times.

My article is discussed in an article on IT planning in higher education in the November 1 issue of Syllabus .

“What Does IT Mean?” asks Greg Neilson in an article at CertCities.com that examines the implications of my ideas for IT professionals.

A trio of Accenture consultants mention my article in a piece on IT misspending at CIO.com.

“Has IT Run Out of Big Ideas?,” a November 11 article on IT innovation in the Australian edition of CIO, discusses my article.

An article in Federal Computer Week describes a panel discussion on IT in the public sector, which I participated in.

W. Brian Arthur cites my work in an essay on the broad economic implications of the new IT infrastructure in the November 10 issue of Fortune (requires subscription).

Rich Karlgaard discusses “IT Doesn’t Matter” in a column on CIOs in the November 24 issue of Forbes.

James Champy, the erstwhile reengineering guru , gives his take on “IT Doesn’t Matter” in the December issue of Fast Company.

Dean Takahashi discusses “IT Doesn’t Matter” in a review of Clayton Christensen’s new book in the November 16 San Jose Mercury News.

My ideas are featured in “ Twilight of the PC Era? ,” Steven Levy’s cover story in the November 24 issue of Newsweek. Levy also moderated a panel discussion on the same subject at Comdex, which featured author Edward Tenner, Microsoft executive Jeff Raikes, IBM marketer Deepak Advani, and me. Stories on the panel ran on InfoWorld and ZDNet . Levy and I also discussed the issue in a segment on Newsweek’s radio program on November 16.

Here’s a new discussion thread on the article at Slashdot.

Colin Boag writes on “IT Doesn’t Matter” at vnunet.com . He notes that “support, maintenance and upgrades are the biggest problems faced by many businesses.”

Kevin McKean, editorial director of InfoWorld, says IT’s glory days still lie ahead.

The Los Angeles Times features an article on my “bold, Olympian pronouncement” (aw shucks) in its November 28 issue.

Looking back on the past year, ADT Magazine says that “Nicholas Carr’s critique, “IT Doesn’t Matter,” in the May issue of the Harvard Business Review was perhaps the most talked about happening in 2003. More important than the criticism from the corporate IT and IT supplier world, the most important result was the debate Carr started. You and your suppliers have been forced to explain what you do, why you do it and why it’s vital to your organizations. And that’s a good thing. ”

Singaporean CIO Teo Chin Seng draws on my article in providing a thoughtful account of the current IT environment in the December cover story of the Asian edition of CIO.

Northwestern University economist Robert J. Gordon cites “IT Doesn’t Matter” in “ Five Puzzles in the Behavior of Productivity, Investment, and Innovation” (pdf download).

The Red Herring refers to “IT Doesn’t Matter” in an article about the ongoing trend to keep tight control of IT costs . The article predicts that “companies will invest in cheaper, fast-commoditizing technologies like open-source software, blade servers, and voice-over-IP (VoIP), in addition to outsourcing functions that others can do more efficiently.”

Information Age lists the publication of “IT Doesn’t Matter” as one of the key events in IT in 2003.

ZDNet cites “IT Doesn’t Matter” in an article on Oracle’s bid for PeopleSoft.

Over at MidrangeServer.com, editor Timothy Prickett Morgan writes an insightful commentary on my article for the newsletter The Four Hundred .

For those keeping score, Network World has named me the 28th most important person in networking, just after HP’s Nora Denzel and just before SCO’s Darl McBride.

W. Brian Arthur comments on “IT Doesn’t Matter” in an interview in Optimize magazine. I comment on his comments in “Productivity and the Profit Myth” in my newsletter, Digital Renderings.

In “IT Does Matter,” an article in the European Business Forum, IT professor Enrique Dans stands atop his ivory tower and pokes at demons .

The November/December 2003 issue of Educause Review , a journal on IT in education, is devoted in large measure to commentary on my article. It also includes the full text of my article.

The always-interesting Paul Murphy comments on my article in a January 15 piece at LinuxInsider.

Andrew Wahl discusses “IT Doesn’t Matter” in “ Techies Now Cogs in Corporate Machine,” an article in the January 19 issue of the Toronto Star.

Also on January 19, John Seely Brown and John Hagel examine “IT Doesn’t Matter” in a Financial Times article on the commoditization of IT and its implications for business strategy.

Former FBI CIO Darwin John mentions “IT Doesn’t Matter” in a provocative article about the role of the CIO in the January 1 issue of CIO Insight. John argues that the CIO’s job has become too much for any one person to handle; he suggests companies establish an Office of the CIO .

The February issue of American Airlines’ American Way magazine names me as one of 10 people to watch in 2004, saying of “IT Doesn’t Matter”: “Carr’s bombshell – denounced by the likes of Bill Gates, Intel’s Craig Barrett, and, of course, the ever-pugnacious Scott McNealy of Sun Microsystems – is still being cussed and discussed by the geekerati. Now, Carr’s legion of critics is bracing for his book-length salvo due out this year. Just don’t look for any latte-stoked book-signing parties at Microsoft headquarters.”

Computerworld reports on a panel discussion I participated in at a Feb. 10 CFO conference in New York.

The February issue of Australia’s MIS magazine features an article on and interview with me entitled The Reluctant Anti-Hero . The author notes: “For an industry nurtured in the ego-stroking and phenomenally successful nineties, it took a lone journalist – albeit an influential one – to reveal how sensitive the IT contingent has become about its strategic position in the world.”

More From Forbes

6 lessons from the success of 'it doesn't matter'.

Share to Facebook
Share to Twitter
Share to Linkedin

Ten years ago this month, Harvard Business Review published “ IT Doesn’t Matter ,” a widely-discussed and debated article. Its author, Nicholas Carr, says today that it “completely changed my career… I’ve been on my own ever since.” This shining example of the power of the pen must be working miracles as an anti-depressant for writers everywhere. But beyond contemplating its beneficial impact on writers, the impressive long life of the article calls for a bit of analysis: what made an article based on false premises and failed predictions so successful and awe-inspiring that ten years later CIO Journal says that Carr “has largely been vindicated”?

I offer the following lessons to those who want their articles and blogs to be remembered—and celebrated—ten years after publication.

Lesson #1: Use a provocative and controversial title.

“Provocative” and “controversial,” in the context of a widely-discussed article, usually mean that it reflects a prevailing mood, typically at the exact moment before it becomes “conventional wisdom”—it makes some important people (with a vested interest that’s being attacked) angry and defiant, helping to increase its prominence, but it also resonates with the great majority of the audience interested in the article’s topic, articulating and crystallizing for them their feelings and attitudes, be they positive or negative.

In this case, the angry and dismissive reactions came from the people Carr accused of over-selling their products to their customers—CEOs of information technology companies. The vast interest in and acceptance of what Carr said came from the multitudes who were still suffering in 2003 from the dot-com bubble hangover. Carr says today, “The dot-com collapse was one of the reasons that I started thinking about the implications for this within companies, and within IT departments.” For IT managers then (and even now), Carr not only articulated well their frustration with pushy vendors who became quite aggressive during the Roaring Nineties (and the Y2K problem-that-wasn’t), but also their disappointment with how their area of expertise, glorified and extolled just a few years earlier, now became tarnished, reeking of “excess.”

Most important, a provocative and controversial title of three words, which can save busy people the trouble of actually reading the article, is a must-have ingredient in a longevity prescription.

Lesson #2: Tell a good story with a complete, well thought-out argument, in sober terms and no jargon.

Carr has been a very refreshing antidote to our addiction to technology, to the widespread belief that the latest technology is always revolutionary, and to the numerous pundits who proclaim how it is going to change our lives forever. I remember watching Carr give a keynote address explaining methodically why IT doesn’t matter at an IT conference in 2004, followed the next day by a famous business consultant/author rebutting Carr and insisting on the importance of IT. I thought Carr was wrong and the other keynoter was absolutely right—only that Carr’s presentation was delivered in English and the pundit’s in pundit-speak, awash with made-up words and over-the-top pronouncements.

Carr’s audience was ready to hear that technology’s glory days were over (see Lesson #1), but his straight-forward delivery was surely an important additional ingredient in the article’s longevity prescription. That should be encouraging to writers trying hard, in the face of so many examples to the contrary, to avoid thinking outside the box or shifting a paradigm or disrupting something or inventing new terms and made-up words (see The Most Annoying, Pretentious And Useless Business Jargon ).

Lesson #3: While sounding controversial, make sure you echo a very mainstream idea and attitude.

In 2003, Carr declared the end of IT innovation: "The opportunities for gaining IT-based advantages are already dwindling. Best practices are now quickly built into software or otherwise replicated. And as for IT-spurred industry transformations, most of the ones that are going to happen have likely already happened or are in the process of happening."

It so happened that a few days ago, Ben Bernanke, Chairman of the Federal Reserve Board, talked in his Bard College commencement address about “knowledgeable observers [that] have recently made the case that the IT revolution, as important as it surely is, likely will not generate the transformative economic effects that flowed from the earlier technological revolutions.” He was referring not to Carr but to very recent observations by economists Robert Gordon and Tyler Cowen, and also pointed out that similar observations have been made for a long time, quoting John Maynard Keynes’s reaction to this mindset in the midst of the Great Depression: "We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterised the 19th century is over; that the rapid improvement in the standard of life is now going to slow down."

Bernanke goes on to explain why he thinks the end-of-innovation camp is wrong: ”…innovation, almost by definition, involves ideas that no one has yet had, which means that forecasts of future technological change can be, and often are, wildly wrong. A safe prediction, I think, is that human innovation and creativity will continue; it is part of our very nature. Another prediction, just as safe, is that people will nevertheless continue to forecast the end of innovation.”

Another ingredient in the longevity prescription is to be in good company.

Lesson #4: Make sure you use “convincing” historical analogies even if they have nothing to do with the topic of discussion.

Carr argued that IT is like other “infrastructure technologies” that lost their competitive potential once they became “accessible and affordable to all.” But IT is different, it has constantly expanding functionality, while Carr’s other technologies—steam engines, railroads, electricity, telephones—have narrow functionality. Electricity—which was Carr’s key historical analogy in his subsequent book, The Big Switch , hasn’t changed much since we found a way to harness and deliver it. Unlike electricity, IT is very different from what it was even ten years ago.

Electricity is a commodity, IT is not. But again, Carr was in great company (see Lesson #3). The so-called “Moore’s Law” is interpreted by Carr and others to mean that the relentless reduction in the cost of computing makes IT a “commodity,” widely available and abundant. Another interpretation of Moore’s Law is that there are endless new possible applications of IT. Bernanke again: “Some would say that we are still in the early days of the IT revolution; after all, computing speeds and memory have increased many times over in the 30-plus years since the first personal computers came on the market, and fields like biotechnology are also advancing rapidly. Moreover, even as the basic technologies improve, the commercial applications of these technologies have arguably thus far only scratched the surface.”

The mistaken view of IT as a commodity made Carr miss the greatest application of IT over the last decade—the use of IT to drive the business (or the competitive advantage, the strategic differentiation, that Carr thought could no longer be associated with IT) by Web-born companies. “The article was really about the IT infrastructure,” Carr explains to Network World , “which is basically what IT departments were mainly concerned with 10, 11 years ago. I think that has become fairly uninteresting from a strategic point of view.” Tell this to Amazon, Google, Facebook, LinkedIn, Netflix, and so many other new companies that IT begat and that thrive, among other reasons, because of their innovative IT infrastructure and innovative use of IT.

But even if you limit the discussion to traditional companies and their traditional IT organizations, it is ridiculous to say there hasn’t been innovation in IT infrastructure over the last ten years. Virtualization is just one example. It has not only made the IT infrastructure much more efficient, it has also provided the means for the IT organization to be flexible and responsive like never before, effectively supporting new strategic business initiatives. Without virtualization there will be no Cloud Computing, the one IT innovation that Carr correctly predicted in 2003, although he mistakenly saw it not as innovation but as a wholesale replacement for the IT organization (his 2005 article “The End of Corporate Computing” also made a splash) and the logical conclusion of his IT-has-become-a-commodity argument.

To his credit, Carr tells Network World , “I probably understated the new things that IT departments would have to grapple with.” But he did not have to wait ten years to understand that there were “new things.” Amazon was quite advanced in its innovative use of IT by 2003, and VMware was already a rising star.

Lesson #5: Ignore examples that don’t fit your argument. Actually, don’t even bother with any examples to support your argument.

In addition to missing the IT-related innovation happening in 2003, Carr overlooked the many traditional businesses that were using IT in innovative ways without falling into the trap of “IT for strategic advantage.” Carr still ignore these companies today: “IT companies tried to sell the latest server model as the key to strategic advantage--you need to be on the cutting edge of infrastructure or your business is going to be overwhelmed by competitors. At that level, the idea that the basic technology was going to be neutralized as a competitive differentiator has basically panned out.”

Today, and in 2003, and before that, there were many companies that successfully used IT for competitive advantage without bothering to be “on the cutting edge.” Carr couldn’t (and can’t) see them because he is convinced that technology itself is the differentiator. But it’s not technology that matters. It’s how it is used that becomes an advantage.

Just one example. Possibly the greatest rebuttal to “IT Doesn’t Matter,” (although it wasn’t presented as a reaction to Carr) was published by Andrew McAffee in 2004, as a Harvard Business School case study and a Sloan Management Review article : “…the company relies on an out-of-date operating system for its store terminals and has no full-time network in place across stores. Despite these limitations, however, Zara's parent company, Inditex, has built an extraordinarily well-performing value chain that is by far the most responsive in the industry.”

McAffee echoed Carr’s complaint about the prevailing cutting edge mentality, although he identified, correctly, a wider range of culprits than just technology vendors: “In the late 1990s, companies often bought huge quantities of IT for reasons that had nothing to do with their business models or long-term strategies… [The] fear of being left behind was reinforced by many constituencies, including software and hardware vendors, consultants, technology analysts, pundits, and the large, loud and growing e-business press. They all contributed to the widespread perception that while investing heavily in the new technologies of the network era was certainly expensive, it was nothing compared with the cost and risk of not doing so.”

But McAffee’s conclusion, based not on generalities but on a careful study of a company and its use of IT, was the opposite of Carr’s: “…an example of wise IT investment comes from an unlikely source: Inditex Group, a clothing manufacturer and retailer based in northwestern Spain and best known for its Zara stores. Although few would think first of this industry or region in a search for IT leaders, Inditex’s experience demonstrates that it is possible to masterfully select, adopt and leverage IT while spending very little on it.”

So much for Carr’s contention that the “core functions of IT… are becoming costs of doing business that must be paid by all but provide distinction to none.”

Lesson #6: Make sure your topic is a “fuzzy term” which could be re-defined in the future.

As mentioned above, Carr is much better than some other successful business and technology observers in his clear and straightforward discussion. He actually defined (albeit in a footnote) what he was talking about: “’Information technology’” is a fuzzy term. In this article, it is used in its common current sense, as denoting the technologies used for processing, storing, and transporting information in digital form.”

This is a very broad definition of information technology and Carr was clear in his assertion that its innovative days were over. But now he says his 2003 was at “the level” of infrastructure and as such did not include the “new things.” Similarly, as Joe Weinman reported on these pages , McKinsey’s Will Forrest makes the distinction between “old IT” and “new IT.” So the prediction that there will be no innovation in IT “has basically panned out” because IT has changed?

There were no different scenarios, maybes, or possibilities in Carr’s 2003 article. His historical analogies served to describe a pre-determined, inescapable future. Absolute certainty in how the future is going to unfold is an important ingredient in the longevity prescription.

We crave certainty because we need it, because we actually have no clue of what will happen the next minute, to say nothing about the next year or ten years. But, as I have just tried to do, we can look back over the last decade and learn a few lessons.

Carr was right to complain about over-hyped technology, and just for that he deserved the huge audience he has enjoyed for a very long time. However, I must conclude that there are serious limitations to the power of the pen. Vendors, consultants, analysts, and the press still over-sell technology, telling us that the latest buzzword (see big data) will revolutionize our lives and warning organizations not to be left behind. And IT managers and their bosses (especially their bosses) are still afraid to be left behind so they buy technology for technology’s sake as an insurance against losing their jobs.

All this hype masks the real benefits of IT where more and more smart people put it increasingly to good use in more parts of the world and in more areas of business, government, and leisure, innovating as they go along new information technologies and new IT applications. IT matters a lot.

Twitter: @GilPress

Editorial Standards
Reprints & Permissions

SUGGESTED TOPICS
The Magazine
Newsletters
Managing Yourself
Managing Teams
Work-life Balance
The Big Idea
Data & Visuals
Reading Lists
Case Selections
HBR Learning
Topic Feeds
Account Settings
Email Preferences

IT Doesn’t Matter (to CEOs)

Robert Plant

However, new technological threats mean it should.

In 2003 Nicholas Carr wrote a provocative article for HBR titled “ IT Doesn’t Matter ,” in which he stated:

Robert Plant is an associate professor of computer information systems at the University of Miami School of Business Administration. He can be reached on Twitter at @drrobertplant .

Partner Center

MIT Technology Review

Newsletters

Why I.T. Matters

Robert M. Metcalfe archive page

A year ago, Harvard Business Review published a now infamous article called “IT Doesn’t Matter.” Its author, the magazine’s then executive editor Nicholas G. Carr, argued that information technology no longer gives businesses a competitive edge. Carr called information technology managers impatient, wasteful, passive, and lured by the chorus of hype about the so-called strategic value of IT.

Harvard Business Review has 243,000 extremely influential readers. So if it publishes an article saying that information technology doesn’t matter, then an awful lot of important business leaders are going to believe it. And if they do, they’ll run their companies-and our economy-into a ditch.

Many commentators have debunked Carr’s article since it appeared last year. So many in fact that I feel like Elizabeth Taylor’s ninth husband: I know what to do, but how to make it interesting? But Carr’s article just won’t stay debunked. And now he has expanded his thesis into a new book called Does IT Matter? , which the Harvard Business School Press published in April. The question-style title hints at some backpedaling, but Carr’s point is basically unchanged-and it needs debunking yet again.

Since I do not subscribe to the ink-on-dead-trees version of the magazine, I bought my copy of Carr’s May 2003 paper through Amazon.com. It was delivered over the Internet in minutes as a PDF file for $7.00. Carr’s new book is also listed on Amazon.com, a triumph of IT-enabled corporate strategy. We see that IT apparently matters to Harvard.

Carr himself has a website, nicholasgcarr.com. IT apparently matters to Carr.

Let’s face it: IT matters to everyone.

Two Trillion Reasons that I.T. Matters

I asked how much IT matters of Frank Gens, senior vice president for the information technology market research giant IDC. (Full disclosure: IDC is owned by IDG, on whose board I serve.) IDC reports that the global investment in information technology (including telecommunications) totaled $1.9 trillion in 2003 and, despite Carr, will climb to $2.0 trillion in 2004.

According to a 2003 IDC survey, non-IT business executives spend 20 percent of their time thinking about IT. Are they wasting their time? Again despite Carr, almost 60 percent say that the strategic importance of IT is increasing; only 2 percent say the importance is decreasing. Carr may claim these Harvard-MBA-type executives are foolish or misguided, but 55 percent feel that their companies should use information technology more aggressively; 43 percent feel their usage is just right; and only 2 percent feel that they should be less aggressive.

In Carr’s world, information technology managers are apparently fools, or even frauds, to the tune of $2 trillion per year. Presumably, these managers slavishly upgrade to whatever new thing vendors want to sell. But in the real world, millions of people already work hard to spend their IT budgets wisely. The computer-trade press has been covering this complicated process for almost 40 years.

In warding off his debunkers, Carr has offered some clarifications of his argument. He doesn’t really mean that information technology doesn’t matter; rather, he says, his point is that because IT has been commoditized, like electricity, it confers upon its business users no competitive advantage. He also clarifies that he does not mean that information itself doesn’t matter, nor does he mean that the people using the technology don’t matter. What really doesn’t matter, he says, is the no-longer-proprietary technology infrastructure for storing, processing, and transmitting information. So we can only hope that most of Harvard Business Review ’s captains of industry read beyond the article titles before dropping the magazine on their coffee tables.

Carr concludes that since information technology no longer provides a competitive advantage to businesses, they should stop spending wildly on advanced information technology products and services. He admonishes managers to stop being suckers for the latest cool products from Cisco, Intel, Microsoft, Oracle, et al. IT managers should stop squandering corporate assets and begin acting in the best interests of their shareholders. They should become boring minimizers of IT cost and risk.

As evidence, Carr points out that my 30-year-old baby, Ethernet, has been standardized and commoditized. It’s true that last year more than 184 million new Ethernet ports were shipped, at a value of $12.5 billion, and that anyone can buy them. Most of those ports are the current mainstream version of Ethernet, which carries data over wires on local-area networks at 10 or 100 megabits per second.

But now that the post-Internet-bubble nuclear winter is almost over, Ethernet is speeding up, to beyond 1,000 megabits (one gigabit) per second. Ethernet is going into wide-area networks. It’s going wireless. It’s going into embedded systems-the eight billion microprocessors shipped every year that don’t go into PCs.

New Ethernet standards are being created, new commoditization races are being started, and Ethernet, if ever it wasn’t, is once again a tool of corporate strategy. In the article and now again in his book, Carr wrongly equates today’s information technologies with electricity, and then he wrongly characterizes electricity as static. In short, Carr, deep into a post-bubble depression, wrongly declares the end of history.

The history of electricity is not over, however. Controlling electrical power grids is still famously problematic, and that’s to say nothing of the exciting developments in technologies such as wind, solar, fission, fusion, hydrogen, and batteries, all of which present strategic opportunities. And information technology is bigger and more recent than electricity. Both are still rapidly evolving; both are very much alive as important elements of corporate strategy.

Much of the research on information technology usage that Carr cites is of dubious validity. Take, for example, the studies that, as Carr puts it, “consistently show” that expenditure on IT as a fraction of company revenue is inversely correlated with financial performance. One study that Carr cites states that the 25 companies with the highest economic returns spent on average just .8 percent of revenues on IT, while the typical company spent 3.7 percent. But this hardly proves Carr’s conclusion. Rather, it indicates that companies investing wisely in IT increase revenues much faster than those that invest unwisely, too little, or not at all. Companies that invest poorly in IT don’t increase revenues as quickly, so their IT expenditures are higher as a fraction of revenue. Companies that invest unwisely in IT go out of business and are not counted in the studies. IT still matters.

Raining On The I.T.-Bashers’ Parade

Carr is not the first person to question the value of information technology. Paul Strassman, for example, despite being a high-profile, big-budget chief information officer for such organizations as NASA, the U.S. Department of Defense, and Xerox, has made a second career of studies not finding the benefits of IT. Morgan Stanley economist Stephen Roach is another famous critic of IT. During the 1990s, he claimed that increasing investments in information technology were showing no benefits. Roach, echoing MIT economist Robert Solow, wrote that IT investments were not appearing in U.S. productivity numbers. I called Solow, a Nobel Prize winner, and he admitted that this so-called productivity paradox might easily be explained by how poorly productivity is measured. Productivity numbers are hard to come by, and Roach relied on outmoded methods. But Roach stuck by his IT-doesn’t-matter numbers, like the proverbial drunk looking for his wallet under a street lamp.

Today, information technology accounts for about half of capital expenditures by U.S. companies. Productivity is high and increasing rapidly. What is Roach saying now? He says that the productivity numbers are highly questionable. In other words, if the data conflict with your theory, throw out the data. It makes me wonder whether Roach, like Carr, just has a bad attitude about IT.

In Carr’s reply to early critics, published on the Web by the Harvard Business Review in June 2003, he wrote that his article “has at least succeeded in setting off an important and long-overdue debate about the role of information technology in business.” I don’t think so. If anything, Carr has succeeded only in misleading his readers.

Howard Smith and Peter Fingar, in their 2003 book IT Doesn’t Matter-Business Processes Do , argue that Carr is not only wrong but dangerous. They remind us of what happened when Harvard Business Review published Michael Hammer’s 1990 article “Reengineering Work.” Too many Harvard MBAs decided to take the easy part of Hammer’s advice and downsized their companies to death. Unless Carr’s argument is debunked, the current crop of reigning MBAs will be tempted to run WordPerfect on mid-1980s PCs connected to IBM 360 mainframes.

Which brings us to Carr’s central conceit. He urges IT managers not to venture foolishly out onto technology’s cutting edge and to buy only that which has low risk and high value to their companies. Carr urges this as if it were breaking news.

In fact, IDG alone publishes 300 information technology magazines worldwide, and each has several competitors. All of these have been offering advice for decades on just how far onto the bleeding edge of technology it is wise to go to give your company an edge. Taking technology risks, when done well, can bring competitive advantage. When done poorly, it can bring disaster. But that’s a balancing act that the information technology managers of the world were well aware of long before Carr put in his two cents.

We often brag about the marvelous U.S. innovation machine. We brag about our world-leading research universities. We brag about our entrepreneurs and the venture capitalists, like me, who back them. But there is an unsung player in our marvelous innovation machine: the aggressive users of information technology. In Germany, by contrast, it’s hard to buy IT unless it’s from Siemens. In the United States, startups readily find managers out on the cutting edge, searching for new, smarter, and more efficient ways to do things-a quest that keeps our vaunted innovation machine humming.

If business executives follow Carr’s advice, who will provide innovation’s test beds? How will new technologies find their markets? This may be the most important reason to debunk Carr’s arguments once and for all: if they harden into conventional business wisdom, American ingenuity will be strangled in its bassinet.

I serve on the board of a small public company in Silicon Valley called Avistar. For 10 years, Avistar has been marketing networked desktop videoconferencing to large companies. Avistar’s hardware and software have worked increasingly well for a long time. What’s taking time is their adoption-the search for one situation after another in which the technologies provide a value that’s worth the risk.

Avistar CEO Jerry Burnett disagrees strongly with Carr and recommends a division of labor in IT management. On one hand are specialists in what Burnett calls “availability management.” These might be mistaken for the cost and risk minimizers that Carr extols. On the other hand are specialists in “adoption management.” These are the people Carr wants demotivated, demoted, or fired.

Keep Reading

Most popular, how to opt out of meta’s ai training.

Your posts are a gold mine, especially as companies start to run out of AI training data.

Melissa Heikkilä archive page

Supershoes are reshaping distance running

Kenyan runners, like many others, are grappling with the impact of expensive, high-performance shoes.

Jonathan W. Rosen archive page

Why does AI hallucinate?

The tendency to make things up is holding chatbots back. But that’s just what they do.

Will Douglas Heaven archive page

The return of pneumatic tubes

Pneumatic tubes were supposed to revolutionize the world but have fallen by the wayside. Except in hospitals.

Vanessa Armstrong archive page

Stay connected

Get the latest updates from mit technology review.

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at [email protected] with a list of newsletters you’d like to receive.

Artificial Intelligence
Generative AI
Business Operations
Cloud Computing
Data Center
Data Management
Emerging Technology
Enterprise Applications
IT Leadership
Digital Transformation
IT Strategy
IT Management
Diversity and Inclusion
IT Operations
Project Management
Software Development
Vendors and Providers
Enterprise Buyer’s Guides
United States
Middle East
España (Spain)
Italia (Italy)
Netherlands
United Kingdom
New Zealand
Data Analytics & AI
Newsletters
Foundry Careers
Terms of Service
Privacy Policy
Cookie Policy
Copyright Notice
Member Preferences
About AdChoices
Your California Privacy Rights

Our Network

Computerworld
Network World

Interview | Nicholas Carr – The Argument Over IT

About a year ago, the Harvard Business Review published an article titled “IT Doesn’t Matter.” It ignited a vehement and often acrimonious debate over the value of information technology. Since then, Nicholas Carr, the author of the article, has expanded on his original thesis that while IT’s value will increase as it becomes more standardized and ubiquitous, “the ability of any one company to use IT in a distinctive way to gain competitive advantage will diminish until…it will make more sense to manage IT as a commodity input?something that is absolutely necessary but [that] isn’t going to set you apart from competitors.”

Carr has faced off with detractors in print and onstage, and this month sees the publication of his new book, Does IT Matter? the title of which suggests Carr may have backed off his original position a bit. (He hasn’t.) Carr spoke recently with CIO Editor in Chief Abbie Lundberg to explore his conclusions and the assumptions underlying them, one of which is that all information technology is “infrastructure.” (See “The Engine that Drives Success” on Page 36 for author Don Tapscott’s response to Carr.)

CIO: Most people distinguish between infrastructure technologies and the applications that ride on them. You seem not to make that distinction.

Nicholas Carr: Over time, what we call infrastructure has expanded to incorporate much more of the hardware, everything from PCs to mainframes, and much more of the software, from fairly esoteric utility software that’s been incorporated into operating systems through various application packages as well. I don’t think that process is over. More and more of the IT that companies use will, over time, become viewed as infrastructure. And what isn’t infrastructure continues to shrink and is meaningful to a smaller and smaller set of companies as a way to differentiate themselves.

So if you think of all of IT as a pie, what proportion of the pie falls into the infrastructure segment?

For most companies, you may as well think of it as 100 percent infrastructure and base your approach to IT management on that assumption. Ultimately, you’d want to just manage it as infrastructure, by which I mean a shared set of standardized hardware and software that is fairly homogenous across companies.

I agree with you that the greatest value from IT will come once the infrastructure is standardized, secure, reliable, interoperable, transparent. Where we differ is that I believe once we have that, there will be a lot of opportunity for differentiation and new types of business activities that are IT-enabled. Take Google’s search algorithms, which it has developed in a specialized, proprietary way on top of the common platform of the Internet to gain a unique advantage, which it has, in fact, been able to sustain.

A fairly small subset of companies can use distinctive secret algorithms, in effect, to create a fundamental competitive advantage. And if you’re a search engine, in which your entire existence basically is those algorithms, then sure. But how widely applicable is Google’s business model to other companies?

What about Amazon? It sells stuff. By leveraging the technologies it has developed on top of a common open infrastructure, the company has been able to achieve competitive advantage.

Whenever you have a new thing [like the Internet], you’re going to have new companies rise up and take advantage of that new thing. So you have companies like eBay and Amazon and Google. But what’s interesting to me about the Internet is how few companies you have like Amazon, eBay and Google.

The companies you cite in your book from 20, 30 years ago?American Airlines, American Hospital Supply, Reuters?are really the poster children of competitive advantage from that era. There weren’t very many of them either.

If you look back 20 years ago, even 10 years ago, companies were able to use creative IT systems themselves as competitive barriers. From American Airlines’ standpoint, it took an enormous amount of time to create Sabre, and it was horribly expensive. But because it was so difficult, it took a considerable period of time for competitors to replicate the system. And in that time in which American had a competitive advantage, based on its distinctive technology, it was able to get incredible economic and business value out of that. But I would argue that as IT has become more standardized?cheaper, more ubiquitous?it has become harder and harder to use the technology itself as a competitive barrier because it becomes easier for competitors to replicate your systems.

It’s important to distinguish between what is and what isn’t infrastructure. Amazon didn’t differentiate by having access to the Internet. It differentiated on how it set up its shopping carts, and how it tracked customer preferences, and all of those things it built into its business model. Those are the things that gave it its distinctiveness.

Certainly, Amazon has done a lot of great stuff with Internet technology…. Amazon is an example of a company that really did gain a first-mover advantage from the Internet, as eBay did as well.

So isn’t being able to leverage the right technology in the right way an important part of companies’ futures?

Sure, that is an important part, and that’s true of many business resources. The ability to build on that doesn’t in and of itself tell you that that resource, whether it’s IT or something else, is a strategic resource or not. It’s a competitive necessity, but it’s important not to confuse the technology, necessarily, with the source of advantage.

Are there other resources you could point to where the resource in and of itself does provide a competitive advantage?

It’s very rare. One of the reasons for writing my article and my book is to underscore the danger of trying to tie competitive advantage to a particular resource rather than to a complex system of activities and resources and such.

It’s been common wisdom for years that the value comes not from technology for technology’s sake, but what you do with the technology?how you use it to optimize or change your business model, how you use it to transform your processes. When you talk about the erosion of competitive advantage around information technology, are you talking strictly about hardware and software, or are you talking about those things?business processes, business models?that are enabled by IT?

I’m talking beyond just the hardware and software. When you have this increasingly standardized new business infrastructure that we call IT, even at the process level, it starts to quickly erode certain traditional advantages that companies have. Best-practice automation diffuses very quickly throughout an industry. So you can see those advantages start to erode as everyone adapts to the new infrastructure.

So why are there still such dramatic differences between one company and another? Why is it that Kmart imploded, when it’s the same kind of business as Wal-Mart? Why is it that when you call L.L. Bean, you get a superior form of customer service than when you call Eddie Bauer?

It’s not all technology. Wal-Mart had a fundamentally different approach to the discount retailing business in terms of where it located its stores, the type of merchandise it carried.

Having said that, certainly Wal-Mart has been an excellent user of information technology and continues to be so. My point is not that technology could never supply a competitive advantage. My point is that its ability to differentiate one company from another has diminished over time as it’s become more and more standardized. Wal-Mart didn’t create its technology yesterday. When it really set itself apart from competitors?in particular on the supply chain side?was back many years ago, when that technology was new. But, over time, things get routinized. Processes become standardized, and the technologies underpinning them become standardized. That ability to use technology to set yourself apart shrinks.

The First-Mover Advantage

I just don’t see that it was easier to gain competitive advantage from IT 20 or 30 years ago.

It was hard back then. It was the very difficulty of doing it that meant that your advantages tended to last a long time. The important thing about a competitive advantage is not just having one, it’s how long you can hold on to it. And so the difficulty of innovating with IT in earlier times meant that if you did innovate successfully, you could hold on to that advantage for quite a long time. You can still innovate today. The question is, how quickly are your competitors going to be able to replicate those innovations? That competitive replication cycle has sped up and continues to speed up.

How does that play out with companies like Amazon and eBay? Their first-mover advantage has been sustained.

Right, and if you are able to use your IT advantage to leverage other advantages, then that’s great. But the point is, there are millions of companies in the world. They have to ask themselves, are Amazon and eBay models that we can follow? I think very few companies can follow the eBay or the Amazon model. But isn’t the point that companies shouldn’t be thinking about whom they should follow?they should be thinking about how they get advantage. What do they leverage? How do they use their resources?whether they’re human or technology resources?how do they use those in a unique and strategic way to make their companies prosper?

Sure, yes. It does tend to be how you use various resources in combination distinctively.

Let’s go back to Google, where you have the infrastructure that you want to be stable, reliable, low-cost, easy to manage. Then you have that distinctive asset that gives you your uniqueness.

Google’s most valuable lessons to other companies are in its management of basic IT. It’s a great user of commodity goods. It was very interesting that it came out and said, We’re not going to rush to buy the Titanium chip; the old stuff is good enough for us. The company obviously has an incredibly intense need for processing power and for IT sophistication, and yet it’s cobbling its systems together out of cheap, old components. That provides a great lesson to other companies in how to approach their own investments in IT. The fact that it’s a search engine built on algorithms is probably less meaningful to other companies.

Certainly that distinctive, unique thing is going to be different from company to company. As far as Google’s resourcefulness goes, those are the lessons of the recession. I don’t know a CIO who hasn’t been consolidating servers, using Linux wherever possible and renegotiating contracts with vendors. That’s been going on for three years now, and it’s the right thing to do, a smart thing to do. That’s the way to manage the infrastructure part of your IT.

For most companies, it’s all infrastructure at this point. You’re right that companies have to find those special things that can distinguish them from their competitors. But IT is only one place to look for those things. For most companies, I would say it’s not going to be in information technology anymore.

So is there no more place for innovation within corporate IT?

I think there will continue to be lots of innovation in corporate IT. But it will take place at the infrastructural level, it will be driven by vendors, and it will be shared.

If you look at IT innovation from an individual company’s standpoint, there are two questions you have to ask. One is, how much more are we going to have to spend to be an innovator than if we waited and took the copycat route? The second question, and this is extremely important, is how long are we going to be able to maintain that advantage before it’s replicated either directly by competitors or by vendors?

If companies look at those two things and find a way to reduce the extra costs that are usually involved in being an IT innovator, or to block competitors from replicating their systems, then innovation can still make sense. But at this point, those opportunities are rare. For a few companies, it’ll make sense to pursue them, but it makes more sense for most companies to be followers.

The CIO’s Burden

Most of the CIOs I talk with complain bitterly about having to put the bulk of their budget toward “keeping the lights on” in IT. Only a small portion is left for the things that are going to help the company be distinctive. Once companies are able to run their underlying IT cheaply, reliably, securely, isn’t there an opportunity to use some of the freed-up dollars to go from “let’s get this stuff to work” to “what can we really do with it?”

What can we really do with it is a very big question. Usually, those kinds of decisions are the essence of business management. It doesn’t seem to me that an IT staff would make those kind of decisions.

It doesn’t sound like you see much of a future for the CIO.

A lot of the most successful CIOs today are, in fact, ones who have implicitly or explicitly accepted the commoditization of IT and are focusing on how they can capitalize on that to drive down the costs and increase reliability.

Should the CIO still be on the executive committee?

I don’t believe that it’s essential that it always be a C-level position. In a lot of companies, that’s probably not necessary. It might make perfect sense to have the CIO report to the CFO or the COO. A lot of the hype that surrounded the CIO role during the Internet boom, particularly, was the sense that the CIO was driving strategy. The CIO had become the second-most strategic executive after the CEO. I don’t think that was all that beneficial to CIOs. It created enormous expectations [about information technology] that the IT group has not been able to fulfill at a strategic level.

The CFO, who manages the commodity resource of money, is a very important person in most organizations. So even if technology’s primary purpose is not to provide sustainable competitive advantage, isn’t it still such an important resource that it requires C-level oversight?

For some companies it is, and for other companies it isn’t. The difference with the CFO’s role is that everything a company does ultimately is reduced to financial terms.

How do you finally answer the question that is the title of your book, Does IT Matter?

It matters enormously as an essential component of business today. You can’t run a business without it. But does it matter strategically? Is it going to set your company apart from your competitors? The answer increasingly is no, and it’s counterproductive at this point to think of IT in that way and to invest in IT with that kind of hope.

Let’s agree to disagree.

Five generative AI tips for every business leader

Four generative AI use cases for businesses

CIO Leadership Live Australia with Alan Sharvin, Chief Information Officer, Tabcorp

CIO Leadership Live India with Irshad Saifi, Director IT and Digitization (CDIO), Shardul Amarchand Mangaldas & Co

CIO Leadership Live ASEAN with Sandeep Pandey, Group Chief Technology and Operations Officer, FWD Insurance

GitGuardian scans code to detect, fix secrets leaks

Our Network

Computerworld

Nick Carr’s ‘IT Doesn’t Matter’ still matters

Ten years ago, carr's article ignited an industry firestorm for its perceived dismissal of the strategic value of it.

Nick Carr’s article “IT Doesn’t Matter” was published in in Harvard Business Review in May 2003 and ignited an industry firestorm for its perceived dismissal of the strategic value of IT.

Ten years ago, Nick Carr said IT doesn’t matter — sort of.

The jarring headline of Carr’s May 2003 article, “IT Doesn’t Matter,” is what many people remember, and it tends to overshadow his more thought-provoking thesis: that companies have overestimated the strategic value of IT, which is becoming ubiquitous and therefore diminishing as a source of competitive differentiation.

“The opportunities for gaining IT-based advantages are already dwindling,” Carr wrote in the Harvard Business Review article. “Best practices are now quickly built into software or otherwise replicated. And as for IT-spurred industry transformations, most of the ones that are going to happen have likely already happened or are in the process of happening.”

[ Q&A: Nick Carr on 10th anniversary of ‘IT Doesn’t Matter’

BLOG POST: IT Doesn’t Matter: What every IT pro needs to know to survive in the cloud era — Part 1 | Part 2 ]

Carr advocated spending less on IT, both to reduce costs and to decrease the risk of buying soon-to-be obsolete equipment and applications. He also predicted the rise of utility-like computing: “The arrival of the Internet has accelerated the commoditization of IT by providing a perfect delivery channel for generic applications. More and more, companies will fulfill their IT requirements simply by purchasing fee-based ‘Web services’ from third parties — similar to the way they currently buy electric power or telecommunications services.”

I knew I was writing something that was provocative and that went against the grain of a lot of the rhetoric that was out there about information technology and business. But the reaction went way beyond what I expected.”

— Nick Carr

The article ignited an industry firestorm. It wasn’t shared on Facebook, it didn’t trend on Twitter and it wasn’t voted up on Reddit — none of those sites existed at the time. The article went viral the old school way: It was passed around the office, written about by other publications and discussed on IT news forums such as Slashdot.

Carr spoke with Network World this month about his inspiration for the article, the backlash, and the article’s unexpected longevity. (Read the full Q&A here)

“I knew I was writing something that was provocative and that went against the grain of a lot of the rhetoric that was out there about information technology and business. But the reaction went way beyond what I expected,” Carr says.

His editor agrees. “He, I, and we (all of us at HBR ) knew that it would be controversial,” said Tom Stewart, former editor of Harvard Business Review , in an email to Network World . “We also suspected that it might be misinterpreted as being a Luddite’s argument for typewriters rather than a nuanced argument that IT was strategically important not for itself but for what it enabled one to do, just as (using the analogy Nick used) electricity was more important for what people did with it than for the fact that it spawned a utilities industry.”

“Our suspicion proved well-grounded: Nick was attacked as much for what he did not say as for what he said — maybe more,” said Stewart, who today is chief marketing and knowledge officer at Booz & Company.

IT suppliers were the most upset, Carr recalls, since he essentially was telling corporate leaders to ignore vendor hype and to stop overspending on IT.

“The biggest backlash came from IT companies. Steve Ballmer called it hogwash, Carly Fiorina dissed it. All the vendors were really up in arms,” Carr says.

In the trenches, CIOs and IT executives had more mixed reactions. “Some of them really took offense at the article, but others said, ‘Yeah, I can see a lot of sense here. This is kind of where we’re heading, this is what I’m trying to do,'” Carr says.

Andi Mann, a former industry analyst and longtime enterprise technologist, saw that dichotomy among the IT executives he worked with. Some IT pros, threatened by the thought of losing control, wanted to prove Carr wrong to their CEOs and maintain the status quo. Others saw Carr’s essay as a wake-up call.

“One group was trying to maintain their legacy and trying to stop the momentum of change, of innovation, of enabling rather than controlling the business,” Mann says. “The other group was saying to me, ‘I think this guy’s onto something, and I want to be the innovative CIO, I want to be the CIO who actually uses this technology.’ Both groups were interested in trying to prove Nick Carr wrong, but for different reasons and in different ways.”

Making a career of it

“IT Doesn’t Matter” turned out to be a career-defining missive for Carr, who followed it up with multiple books (including 2004’s “Does IT Matter?” and 2008’s “The Big Switch”) speaking engagements, and another ire-raising essay titled “The End of Corporate Computing.”

Looking back on the 10-year-old HBR essay, Carr says he got some parts right and some parts wrong.

“Back then, IT companies tried to sell the latest server model as the key to strategic advantage — you need to be on the cutting-edge of infrastructure or your business is going to be overwhelmed by competitors. At that level, the idea that the basic technology was going to be neutralized as a competitive differentiator has basically panned out,” Carr says.

On the other hand, IT pros have new challenges to address, such as cloud strategy, mobility and social media. “From another point of view, I think I probably understated the new things that IT departments would have to grapple with. I don’t think I expressed the full range of what was to come,” he says.

Industry watchers agree — to varying degrees.

“He didn’t look into the future. He looked at the present state and saw a lethargic, slow, controlling, almost domineering department of IT,” says Mann, who today is vice president of strategic solutions at CA. “He got it right: IT needed to be fundamentally different. But he also got it hideously wrong.”

Suggesting that IT doesn’t matter, that it’s commoditized, and that cloud providers can do the job of IT fundamentally underestimated the value that IT brings to businesses, Mann says. “Nick Carr is a provocateur and author rather than a technologist, and I don’t think he understood what IT does when it does it well.”

More on the same page as Carr was analyst David Tapper, vice president of outsourcing and offshore services at research firm IDC, who says he fundamentally agreed with Carr’s article.

“I think he got people to start to think about it, to say, ‘Let’s step back from what we do and ask: Where is this all going, folks?’ He was right. I think he needed to modify it a little bit, but he struck the right chords,” Tapper says.

To Tapper, one distinction Carr should have made is to specify who will care about IT in the future: “I think he should have said, ‘To whom should IT matter?’ Because it won’t matter to the consumer, it will matter to the suppliers and the service providers,” Tapper says. “The service providers are the ones that are going to buy all this stuff, they’re going to integrate it and operate it.” To everyone else, technology is just a tool to do their jobs, something that’s taken for granted, according to Tapper. “Do I wake up in the morning thinking about my telephone or the boiler in my house? No. Only when there’s a problem. Otherwise I never give it a second thought.”

Tapper agreed with Carr’s prediction that IT would move to a utility model. “Once the masses of the world need something, it always becomes a utility. There are no exceptions,” Tapper says. “It’s the only way you can deliver it. And technology is now something we can’t live without.”

March to the cloud

Ten years after the HBR article, companies still have a long way to go on the path to cloud computing.

“If you look at IT, the bulk of investment these days, certainly on the vendor side, is on cloud systems and applications,” Carr says. “On the other hand, if you look at corporate spending, cloud is still a fairly small percentage of overall spending, even though it’s growing quickly. So we’re still kind of between two eras.”

Tapper agrees. “Companies are in the stages of restructuring their IT departments and trying to form them around cloud categories, such as platform as a service. They’re outsourcing or procuring different clouds. They’re trying to get it under control. It’s a bit out of control now — one company had 30 Amazon contracts and didn’t know about them.”

Back when “IT Doesn’t Matter” was published, the idea of utility-like computing was relatively new in the trenches of enterprise IT. But Mann saw some IT leaders accept the implicit challenge and begin laying the groundwork for cloud computing because of Carr’s article.

“There were a couple of organizations that specifically started talking to me about virtualizing everything, automating everything, implementing chargebacks and things like that. That was the start of a number of my clients’ journeys to the cloud,” Mann says.

The fact that it’s still being talked about suggests Carr made some valid points.

“If Nick had just merely [been] a provocateur/bomb-thrower/iconoclast — i.e., had he been wrong — then the article would have been a 9 days’ wonder, not something you’d like to write about on its 10th anniversary,” Stewart said.

At the very least, the article left a lasting impression. “It’s still a bit of a raw nerve for a lot of people,” Mann says.

Ann Bednarz covers IT careers, outsourcing and Internet culture for Network World. Follow Ann on Twitter at @annbednarz and reach her via email at [email protected] .

More from this author

2024 global network outage report and internet health check, 2023 global network outage report and internet health check, 2020-2022 global network outage report and internet health check, 10 things to know about data-center outages, data center fires raise concerns about lithium-ion batteries, global microsoft cloud-service outage traced to rapid bgp router updates, it to shoulder more responsibility for data center sustainability, top 10 outages of 2022, most popular authors.

Show me more

Cisco layoff announcement expected: report.

Key rules for Linux sysadmins

Google’s scientists lift lid on Effingo at Sigcomm 2024

Has the hype around ‘Internet of Things’ paid off? | Ep. 145

Episode 1: Understanding Cisco’s Converged SDN Transport

Episode 2: Pluggable Optics and the Internet for the Future

How to see how many days passed since the beginning of the Linux epoch

How to use the pv command

How to use the stat command

“IT Doesn’t Matter” by Nicholas Carr Essay (Article Review)

To find inspiration for your paper and overcome writer’s block
As a source of information (ensure proper referencing)
As a template for you assignment

After the several decades after the first Informational Technologies invention, they have spread around the globe and became an essential part of the infrastructure in every organization. According to Nicholas Carr (2003), through time IT has evolved from a competitive advantage in business into a commodity (p. 44). It means that Informational Technologies are no longer regarded as an innovation that helps companies to outstand among their competitors in the market and rather have become a necessary means of business maintenance and conduction. In the present-day situation, the organizational leaders cannot simply rely on technological advancement but need to elaborate and design a strategic and innovative approach towards IT usage that would provoke beneficial outcomes.

In the article “IT doesn’t matter,” Carr (2003) claims that every technologic innovation sooner or later becomes ubiquitous and conventional (p. 42). It is mentioned that technological evolvement is cyclic and is constituted of several phases. When a commercial potential of a technology is recognized, it provokes the increase of investments in it that consequently leads to commercial expansion (Carr, 2003). At the first phase, the technology remains expensive and inaccessible for the vast majority of entrepreneurs and common people.

It happened in the case of IT as well. In the 70s and 80s, only large and prominent enterprises could afford informational innovations. At that time, IT technologies increased competitiveness drastically and provided the growth of business effectiveness and efficiency. However, in the ending phase of the technological evolvement cycle, the advantageous characteristics diminish – the technology becomes affordable and accessible for everyone.

Nowadays, IT has become an intrinsic part of everyday life. Each individual face technologies in the multiple aspects of social performance: personal, academic, and professional. IT is used to maintain the infrastructural organization in every company no matter how big or small it is. Although infrastructural technologies are essential to the information and knowledge management, and it helps to solve various managers’ and employees’ tasks, the organizational leaders cannot expect that they will obtain the opportunities for advantage once they have purchased an advanced IT equipment. Nowadays, the competitive advantages are developed and maintained by those who have a “superior insight into the use of new technology” (Carr, 2003, p. 43).

By the nature of things, one deals with technologies at the workplace on an everyday basis. According to personal observation, it is possible to say that IT facilitates working processes dramatically. For example, it helps to communicate with colleagues on distances – it is possible to conduct business conferences even with partners from different countries. In this way, technologies save time and decrease expenses. Overall, it has a positive effect on business in terms of productivity and profitability.

Nevertheless, IT has become a common and regular phenomenon. It has rather become a necessary thing to maintain business, but it cannot be regarded as something that may create differences and uniqueness. It is possible to say that IT is now a standard and normative thing in every industry. And it is impossible to disagree with Nicholas Carr when he claims that IT experiences the phase of commoditization.

As soon as new technology emerges in the market, it is replicated (Carr, 2003, p. 46). The industries are abundant with similar devices and software programs. The increase of the similarity in products increases competitiveness in the market, and many companies fail to meet the excess requirements provoked by the ever-changing environment and rapid development. According to the author of the article, the innovative approach towards technology usage and smart IT management strategies are the things that make a difference and create advantages for businesses in the modern situation (Carr, 2003, p. 48).

When talking about IT management rules, it is important to mention that the purchase of the most expensive and up-to-date technology doesn’t necessarily mean the organizational indexes improvement. There is an example from the personal experience when the manager had been misled by the excessive promotional information and bought very expensive analytical software that failed to adjust to the hardware the organization had at that time. It provoked unnecessary difficulties and expenses. The situations like this can be easily managed by the effective IT management applied in practice by the competent and experienced specialists.

According to Carr (2003), an effective IT management strategy is the one that is aimed at cost reduction and focuses on the technological vulnerabilities, i.e. decrease the negative outcomes provoked by the technological flaws (p. 48). The appropriate and intelligent management doesn’t create competitive advantages, but it helps to avoid many challenges a company may face both in internal and external environments. But if the organizational management took a decision to outstand and take an advantageous position in the market, then they need to change approach and commence implementing technologies in a creative and distinctive way. For example, it is possible to adopt the proprietary technologies that would provoke the diversification of products and services. Such patented technologies may help a company to emphasize its uniqueness, increase customer attraction, and achieve financial improvement.

Carr, N. (2003). IT doesn’t matter. Harvard Business Review, 5 , 41-49. Web.

Cyber Practice and Stakeholders Value
Ethics in the Technologies and Communications
The "How to Fix Social Media" Article by Nicholas Carr
The Shallows by Nicolas Carr
David Carr: ‘The Night of the Gun’
How Technology Has Destroyed Jobs in Our World Today?
ERP Systems Impact in Higher Education
The Digital Divide: Technologies in Australia
Efficient Interaction in Distance Learning Classroom
IT and Its Effect on Workplace Literacy
Chicago (A-D)
Chicago (N-B)

IvyPanda. (2020, July 8). “IT Doesn’t Matter” by Nicholas Carr. https://ivypanda.com/essays/it-doesnt-matter-an-article-by-nicholas-carr/

"“IT Doesn’t Matter” by Nicholas Carr." IvyPanda , 8 July 2020, ivypanda.com/essays/it-doesnt-matter-an-article-by-nicholas-carr/.

IvyPanda . (2020) '“IT Doesn’t Matter” by Nicholas Carr'. 8 July.

IvyPanda . 2020. "“IT Doesn’t Matter” by Nicholas Carr." July 8, 2020. https://ivypanda.com/essays/it-doesnt-matter-an-article-by-nicholas-carr/.

1. IvyPanda . "“IT Doesn’t Matter” by Nicholas Carr." July 8, 2020. https://ivypanda.com/essays/it-doesnt-matter-an-article-by-nicholas-carr/.

Bibliography

IvyPanda . "“IT Doesn’t Matter” by Nicholas Carr." July 8, 2020. https://ivypanda.com/essays/it-doesnt-matter-an-article-by-nicholas-carr/.

Why IT Does Matter

Harvard Business Review editor-at-large, Nicholas G. Carr, ignited a firestorm in the opinion piece " Why IT Doesn't Matter " published in the May 2003 issue of HBR.

Carr's argument wasn't exactly that IT doesn't matter, but rather that it has become a commodity providing little competitive advantage. As a result, he said, companies should rethink how much they pay for IT given this reduced return on investment.

HBR received a large number of positive and critical responses to Carr's piece including a letter we offer here from two professors at Harvard Business School. —Ed.

In no other area is it more important to have a sense of what you don't know than it is in IT management. The most dangerous advice to CEOs has come from people who either had no idea of what they did not know, or from those who pretended to know what they didn't. Couple not knowing that you don't know with fuzzy logic, and you have the makings of Nicholas Carr's article.

Carr's examples of railroads and electric power played out over eighty years, (not forty, as he suggests), turning society, business organizations, and lifestyles inside out. The deeper societal impacts came during the second forty years, as society's insights on how to use the technology changed. It is worth noting that although these technologies mutated significantly (for trains, it meant moving from fifteen miles an hour to eighty miles an hour), the mutation was on a totally different and much smaller scale than IT's.

The cost performance of IT technologies over the first forty years changed by roughly 10 7 , and for the foreseeable future will continue to evolve at the same rate. That is in sharp contrast to a train, which after eighty years moved six times faster than it had in the earlier period. This is impressive, but not nearly as dramatic as a computer produced in 2000, which runs 10 million times faster than a 1960s' computer.

Carr's graph on information technology stands as a subject lesson for Darrell Huff's well-known book How to Lie with Statistics . Carr's chart would look very different if he had tracked the number of MIPS or CPU cycles on the network from 1990 to 2002. Even using a log scale on the vertical axis would be barely enough to tilt a vertical straight line enough to create something resembling the curves of the other two schematics in Carr's article. With this explosion of cost effectiveness has come the ability to do things truly differently. American Hospital Supply's distribution software and American Airlines' SABRE reservation system are examples of victories in past technologies. The firms were the first in their industries to see technology's transforming potential, they had the courage to invest in its performance, and they used it to gain a significant competitive edge. It is naive to assume that other sharply discontinuous technologies will not offer similar transformation opportunities in the future.

In our view, the most important thing that the CEO and senior management should understand about IT is its associated economics. Driven by Moore's Law, those evolving economics have enabled every industry's transaction costs to decrease continually, resulting in new economics for the firm and creating the feasibility of products and services not possible in the past. The economics of financial transactions have continually dropped from dollars to cents. New entrants have joined many industries and have focused on taking strategic advantage of IT's associated economics. Company boundaries have become permeable, organic, and global in scope through IT networks and the Internet.

The most important thing that the CEO and senior management should understand about IT is its associated economics.

As the pace of doing business increases, the CEO and senior management team must be aware of how IT can change rules and assumptions about competition. The economics of conducting business will likewise continue to improve—providing opportunities for businesses to expand the customer value proposition by providing more intangible information-based services. For example, the automobile value proposition continues to expand with technology that continuously senses road conditions and applies the appropriate wheel traction and suspension system pressures.

CEO and senior management must understand that historical constraints of every kind continue to be knocked off IT because it is a "universal information-processing machine." Before e-mail and the Internet, the cost of communications was seen as limiting IT's wider use. Packet switching was invented as a way to digitize voice, data, and video in a matter that enabled digital computers (and its associated economics) to communicate, and the cost of communication sharply and suddenly dropped. Similar situations have transpired with the advent of digitized photography, use of radio frequencies for various handheld IT appliances, and the development of such products as elevators that call in to the service center or to a computer that automatically dispatches collective software or people when a part or system is about to fail. Often, only the senior management team's imagination limits new IT-based opportunities.

Our research suggests the following:

New technologies will continue to give companies the chance to differentiate themselves by service, product feature, and cost structure for some time to come. The first mover takes a risk and gains a temporary advantage (longer if there are follow-on possibilities). The fast follower is up against less risk but also has to recover lost ground. Charles Schwab versus Merrill Lynch and Walgreens versus CVS are examples of this playing out over the past decade. Our advice to the CEO is to look at IT use through several different lenses. One lens should be focused on improving cost savings and efficiencies. Another should be focused on the incremental improvement of organizational structure, products, and services. Still another should be focused on the creation of strategic advantage through extending competitive scope, partnerships (customers and other parties), the changing of the rules of competition, and the provision of new IT-based services to extend the customer value proposition.

Unless nurtured and evolved, IT-enabled competitive applications, like many competitive advantages, don't endure. Even historic strategic systems like American Hospital Supply's (after a decade of financial malnourishment) may wind up turning into a strategic liability. Others, however, like American Airlines' SABRE have shown extraordinary robustness and have permitted the survival of otherwise doomed organizations.

Evaluating these opportunities as well as thinking through their implications and timing, is vitally important, nonboring work. The new technologies will allow new things to be transformed in nonlinear ways. Radio-frequency identification devices for grocery stores, smart cards, and automated ordering systems for hospital physicians are all examples of new process targets that technologies will soon address. In the more distant future we will see the improved creation of drugs and treatments through the ability to rapidly and more deeply analyze huge databases. Understanding the potential and then deciding when the time is right to seize these transformative applications will be neither routine nor boring for the CEO or CIO.

Grid computing, standardization of components, and open systems, far from stifling differentiation, provide a stable platform to build on and offer new ways of differentiating, either by cost, structure, product, or service. Just as literacy stimulated innovation, so do open systems and grids. Outsourcing the commodity infrastructure is a great way to control costs, build competence, and free up resources, which can be used to combine data bits in creative ways to add value. Relatively bulletproof operational reliability will be a key part of the price of success. Back-office or server farms, help desks, and network operations will be outsourced to specialists to attain this reliability (at rock-bottom costs). Packages like SAP further help remove commodity maintenance activities and allow firms to better analyze customer information and provide service at the sharp end. The package of skills needed inside an organization is changing very fast for competition in the information age.

The jobs of the CTO and CIO are and will be of unparalleled importance in the decades ahead. Max Hopper of American Airlines and Paul Strassmann of Kraft and NASA are not the last of a dying breed of dinosaurs, but prototypes of the leadership skills needed for survival.

If you take 1955 (with the IBM 701) as the start date and use eighty years as a technology cycle, 2035 may not be far off the mark for playing much of this out. Even then, the special recombinant nature of this technology makes us uncomfortable calling an end date. We wish Carr were right, because everyone's golf handicap could then improve. Unfortunately, the evidence is all to the contrary.

25 Jun 2024
Research & Ideas

Rapport: The Hidden Advantage That Women Managers Bring to Teams

11 Jun 2024
In Practice

The Harvard Business School Faculty Summer Reader 2024

How transparency sped innovation in a $13 billion wireless sector.

24 Jan 2024

Why Boeing’s Problems with the 737 MAX Began More Than 25 Years Ago

27 Jun 2016

These Management Practices, Like Certain Technologies, Boost Company Performance

Information Technology

Sign up for our weekly newsletter

"IT Doesn't Matter" by Nicholas Carr: A clear paradox?
Expert Talks Home

If you have read Nicholas Carr's 2003 article "IT Doesn't Matter," I am sure you know why this article is still a topic of interest even today. Though Carr wrote this article almost two decades ago, the fact that it is still being discussed and debated globally shows the astute quality of his ideas, the compelling nature of his narrative, and his gift of captivating readers despite the barrier of time. His words have painted a clear picture of how the railroads, while initially conferring advantages to various industries, failed to sustain those same benefits when the industries scaled up.

And while the author's argument over railroad technology is sound, the same cannot be said for his arguments about information technology, especially in today's world. Carr's entire article revolves around how IT doesn't matter in the long run. But you will find that there is a constant disconnect between which technology he is actually referring to—for instance, he often uses the term “technology” synonymously with regards to railroads, power grids, as well as IT, when a distinction should have been made in some of his arguments.

Carr starts the article talking about how IT has become the backbone of commerce, and that its presence has expanded so much that chief executives routinely talk about its strategic importance. However, later, he contradicts himself and goes on to say that IT is a commodity input that only acts as a transport mechanism for carrying digital information, the same way railroads carry goods, and power grids carry electricity. And just when you think you've seen it all, he gives his flawed reason for IT being a commodity: its global pervasiveness and decreasing cost. I can't help but feel that here the author has failed to consider the wide scope of applications that arise from the use of technology, especially IT, in different industries with differing needs.

The author then gives his opinion on proprietary and infrastructural technologies, saying that the former is more advantageous for long-term profits. He says that IT has all the hallmarks of an infrastructural technology because it can be rapidly commoditized and all businesses can get their hands on it in a relatively short time. The author also agrees that infrastructural technology leads to major market changes, but he labels the advantages it confers as “unsustainable.” He says that infrastructural technologies’ power to transform businesses doesn't last long.

The author gives the example of American Hospital Supply Corp. (AHS), which reaped profits within the first few years of launching its proprietary software. However, he admits that with the advent of personal computers and packaged software, things went belly up for AHS and it had to merge with Baxter Travenol to survive. If we go by the author's argument, then doesn't this mean that even proprietary technology cannot give a lasting advantage? Any technology, whether it is proprietary or infrastructural, can give businesses a sustained advantage if they adapt that technology to changing market trends and user requirements. Don't you think so?

The author concludes his article by appealing to business executives to delay their technological investments because the rapid pace of technological advancements could quickly render their systems obsolete. According to the author, IT expenses hardly ever translate into profits, and IT challenges such as technical glitches, security breaches, and unreliable vendors make the matter worse. He says that the real key to success is to spend frugally and avoid risks. The author gives the examples of Dell and Walmart, which allowed their competitors to bear the high costs of experimenting with a new technology and reaped the benefits of the advancement after best practices had been standardized and the costs had gone down significantly.

Now, I know what you are thinking. Isn't this similar to what Carr said about infrastructural technology being a mere commodity and hence strategically insignificant, except for an initial cost advantage? Beats me! And like me, I am sure this is not the only discrepancy you found in his article or the only disagreement you had with his viewpoints. So, allow me to address the grievances on your behalf.

Also, as the Principle of Comparison states, "Only the likes can be compared"; comparing something as unique as IT with railroad technology defies logic.

Moreover, easy access to a certain technology does not mean that it is accessed by all, or for the same purposes, or even to the same extent. While technology is available to all, how it is used is always in the hands of the user. Gone are the days when people believed that “knowledge is power.” We now live in the information era, and knowledge is at the fingertips of everyone. So, the real power lies in how organizations put the knowledge to use, and who puts it to use first.

Using a blanket term like "technology" while discussing strategic advantages for businesses, or lack thereof, is arbitrary. Every business will have specific needs, which can be catered to by specific technologies. And even if an infrastructural technology caters to a need, it has the potential to become a competitive advantage. This can happen if the company personalizes the technology to meet the needs of its customers. For example, technology, being fluid, can be customized to meet the present and future needs of customers. So, if using a particular technology is not working out for a business, the organization is either unaware of its customers' expectations or it doesn't have a USP for its products or services. In this instance, despite the technological advantage, the lack of business intelligence results in the nonperformance of that business.
The author's opinion that technology's influence can be felt only at the macroeconomic level cannot be farther from the truth. In today's world, when the pandemic brought life to a standstill, technology helped bring normalcy back to daily life. It wasn't just businesses whose survival depended on technology—humanity's did too. During lockdown, we were able to ward off loneliness and maintain our peace of mind thanks to technology, which enabled us to keep in touch with our friends and family via video calls.

The success of a business lies in how effectively its decision makers grab hold of opportunities. For instance, restaurants that aren’t on delivery services often have lower sales, and this proved even more true during lockdowns. Pre-pandemic, delivery apps like Uber Eats, Seamless, Swiggy, and Zomato were already delivering food, but their services became absolutely essential during lockdown.

Also, if you would rather trust numbers than words, let's take a look at the stats. While both Swiggy and Zomato experienced a multi-fold increase in their revenue, Swiggy allowed for delivery between individuals and not just restaurants, and this further increased the company’s revenue by 56% between April and September 2021.

This is a clear example of how technology not only provides a strategic advantage to businesses but can also influence the success or downfall of a business as a whole. So, if IT services really don’t matter, as the author says, how could they have the ability to paralyze a business? How can something be so paradoxical as to be unimportant and yet be so utterly valuable as to decide the fate of a business?

And, folks, if you think I am exaggerating, let's look into some of the factors that affect businesses. Experts agree that these are the major reasons businesses fail:

Lack of a proper business plan or model
Not having measurable goals
Poor marketing and customer service
Poor pricing
Poor maintenance of records and inventory

Looking at these factors, don't you think that technology can help overcome these issues? We have all experienced the wonders of technology in real life during this pandemic, haven't we? We are all aware of how LinkedIn helps both employers and employees find each other, which was even more important when the pandemic caused many people to lose their jobs. And, thanks to software like Zoho Remotely, Microsoft Teams, and Zoom, we were able to work from the comfort of our homes. Going digital in so many aspects of our life wasn't easy; but, thanks to AI chatbots, many of the queries we had, even after business hours, were resolved quickly, weren't they? And in different languages too. Isn't this an example of how technology can help improve marketing and customer service efficiency?

Also, as Carr mentions in his article, there is rapid advancement in technology, which means businesses need to keep updating their strategies. But the advancements thankfully don't have to be as fast as the author would have you believe, because software these days is progressive enough to allow for updates on an existing device or technology without major changes. However, it is also wise to remember that the early bird gets the worm, which means delaying technological investments might not be in a business’s favor!

Having said all that, please understand that the author wrote his article in 2003, and it would not have been possible for him to anticipate the level of technological advancements and their impact on the world to this extent; but it does feel like he underestimated the impact of technology quite a bit even in his times, doesn't it? Let's take this as a learning opportunity and remind ourselves that technology is a powerful weapon indeed; but, a weapon is only as good or as powerful as the person who wields it. So, to be successful, you need to strike the right balance between improving your business acumen and your technology. Thanks for reading, folks!

Products mentioned on this page:

EventLog Analyzer

SUBSCRIBE TO THE LATEST CONTENT

Setting up a SIEM in three steps (Deployment, Tuning, Maintenance)
Detecting intrusions on public facing applications/machines

5 things to look for in a SIEM tool
Detecting intrusions on public-facing applications and machines
Spotting and stopping cloud attacks: SSH Linux attacks on AWS
Why seasonality factors are important to anomaly detection in cybersecurity

Get the latest content delivered right to your inbox!

Thank you for subscribing..

You will receive regular updates on the latest news on cybersecurity.

Please enter a business email id
By clicking on Keep me Updated you agree to processing of personal data according to the Privacy Policy .
Expert Talks

Awards & recognition

ManageEngine named in 2022 Gartner MQ for SIEM Gartner Peer Insights Customers' choice for SIEM

Threat detection
Attack detection
Integrated DLP
Integrated CASB
IT compliance management
Real-time security analytics
Getting Started
How-to videos
Documentation
Attack Library
Cloud Security
Online Demo

Secure your IT infrastructure with a cloud SIEM solution

Solutions by industry

Financial services
Government and federal agencies
Educational institutions
Healthcare organizations

One-stop solution to all Log Management and Active Directory Auditing

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

We're Hiring!
Help Center

Critique of the Arguments of Carr's: IT Doesn't Matter

In the year 2003, Nicholas Carr published a controversial article that shed the world of information technology in a bad light. The basic thesis of Carr’s article was: when an information technology has become prevalent, ubiquitous, and part of the status quo, that information technology has become a commodity in a non-proprietary technology infrastructure and has therefore lost its ability to provide a competitive edge or strategic advantage for business growth and profitability at the company level. Carr’s article was successful in stimulating thought but it did not hold to the principles of rigor and reliability required to be considered scholarly, peer-reviewed research. Carr’s article was, at best, a conceptual paper. Although his article was compelling from the standpoint of conjecture, it provided very little quantitative evidence to back his statements. Even from a qualitative analysis research method perspective, there was not sufficient information presented to provide validity, credibility, or trustworthiness. Our article therefore is an argument against the validity of Carr’s article and provides evidence showing that little academic rigor in research methodologies was used in the development of Carr’s article. Further, this article provides viewpoints that could have been cited to provide evidence to support Carr’s claims or alternate viewpoints to argue against Carr’s claims.

Related Papers

New Left Review

Advances in information technology have generated both delirious boosterism and gloomy prognoses of computer-assisted decline. Rob Lucas engages with the sceptical current exemplified by Nicholas Carr’s The Shallows, tracing its conceptual underpinnings and identifying its lacunae—political, economic, historical.

Business Review

Eugene Kowch

Roger Alan Pick

Abstract A new analysis of secondary data examines Carr's controversial Harvard Business Review article of 2003 by considering the relative importance of top information systems issues according to the level of innovation in an industry. Although the majority of the subsequent literature argues that Carr was wrong, our analysis provides evidence suggesting that Carr may have been right.

Jay Brian Barney

International Journal of Information Management

Donald Kerr

IAEME Publication

The relationship between Information Technology (IT) resources and competitive advantage has been the academic focus of attention and debate issues. Although many researchers found that IT investments contribute to help firms gain competitive advantage, there are still those who doubt like Solow (the Solow Computer Paradox), and Carr (IT doesn’t matter). The aim of this study is to research the relationship between IT resources, which are divided into four categories: IT infrastructure, IT technical skills, IT managerial skills, and IT-business partnership, and the competitive advantage of firms. Using data from 30 Algerian firms and the Pearson Coefficient, the results indicate a significant positive relationship between IT resources and the competitive advantage. Furthermore, the results show also a significant positive relationship between all categories of IT resources from one side, and competitive advantage of firm from the other side. Finally, the results show no significant relationship between firm’s age, type of industry, and the competitive of firms.

Dibyendu Choudhury

Keith Smith

E.H. Carr was one of Europe’s preeminent thinkers in the field of international affairs. Yet his contribution to International Relations theory is continually questioned. Realists depict Carr as a quintessential realist; revisionists draw from his wider corpus to qualify his contribution. Although not inaccurate, the revisionist literature is incomplete as it neglects a number of Carr’s diplomatic histories. Refocusing on these, especially the manner in which traces of Ranke’s the primacy of foreign affairs tradition are evident, this paper points to a more conservative and less critical Carr. Utilising an interpretivist framework, this shift in traditions of thought is explained by the dilemmas Carr faced. Although works of history rather than theory, the paper contends that Carr’s diplomatic histories remain relevant, particularly with regard to the embedded criticism of realpolitik they contain. This realisation is made evident through a reading of Carr in parallel with the concept of tragedy.

Adamawa State University, Journal of Scientific Research Vol.1, No.2

Franklyn Chukwunonso , mohammed ribadu

This paper investigates the linkages between information and communication technology and firm performance. The findings show that information and communication technologies alone cannot produce sustainable advantages, but that firms must organize and manage information and communication technologies in such a way as to leverage the complementary human and business resources. The results also suggest that adopting information technology has positive effects on innovative practices, which increases the competitive advantage of firms.

Loading Preview

Sorry, preview is currently unavailable. You can download the paper by clicking the button above.

RELATED PAPERS

Problemy Zarządzania - Management Issues

Leslaw Pietrewicz

Minnesota Stands Out for Its Moderately Progressive Tax Code

August 6, 2024

Carl Davis Research Director

Most state tax systems fall short of the public’s perception of fairness by charging the rich lower tax rates than everyone else. Minnesota is among a small group of states that has chosen a different path. In Who Pays? , our comprehensive study of state and local taxes, Minnesota stands apart from the pack with a moderately progressive tax system that asks slightly more of the rich than of low- and middle-income families.

Recent reforms signed by Gov. Tim Walz, the Democratic Party’s presumptive Vice-Presidential nominee, have contributed to this reality. Our analysis shows that taxes on working-class families declined markedly over the last few years in Minnesota, while taxes on high-income people went up slightly over this same period.

The most notable changes were signed into law by Gov. Walz in 2023 as part of a sweeping tax reform package. Some changes were temporary, like taxpayer rebate checks and expanded property tax credits. But the bill also included a host of important, permanent reforms.

Chief among those was a new Child Tax Credit that is expected to slash child poverty in Minnesota by one-third, according to Columbia University’s Center on Poverty and Social Policy. The link between Child Tax Credits and child wellbeing is well established, as the financial security afforded by these credits is associated with improved child and maternal health, better educational achievement, and stronger future economic outcomes.

Other tax cuts signed by Gov. Walz include expanded exemptions for Social Security income and for student loan forgiveness, plus an extension of the Child Care Tax Credit to newborn children.

To help pay for these and other substantial tax cuts, the 2023 bill included a variety of well-targeted tax increases on high-income people and profitable corporations. Certain tax deductions claimed by high-income filers have been scaled back. Capital gains, dividends, and other investment income over $1 million per year is now subject to a modest 1 percent surtax. And multinational corporations reporting income overseas now face higher taxes as well, as the state opted to piggyback on a law written by Congressional Republicans targeting companies’ “low-taxed income.”

While the Minnesota tax code is somewhat progressive, it is far from radical. The state has embraced practical, administrable reforms that have lowered taxes for working-class families, reduced child poverty, and addressed the public’s frustrations with the tax treatment of multinational companies and wealthy people. At the end of the day, Minnesota does better than most states in living up to what most people would consider to be a bare minimum standard of tax fairness: the idea that wealthy people should not pay lower tax rates than everyone else.

Full Archive

All Blog Posts

Hybrid Work: How Leaders Build In-Person Moments That Matter

“did i just commute for this” leaders need to critically examine what kinds of interactions matter most for their teams..

Workplace, Teams, & Culture
Talent Management
Organizational Behavior
Performance Management
Remote Work

Carolyn Geason-Beissel/MIT SMR | Getty Images

As hybrid work programs continue to grow in popularity and full-time office work declines, many leaders and companies are still struggling with a tough question: What are the right patterns for getting people together?

Free-for-all approaches that depend on individuals and managers to self-organize hybrid work norms don’t succeed — the coordination tax is just too high. I’ve seen this up close in my work with dozens of organizations. These ad hoc models result in people showing up to quiet offices, retreating to conference rooms to be on Zoom all day, and commuting home with a bubbling resentment about having traveled in for no clear reason.

What does work, then? While headlines make it sound like it’s a battle to get people out of their home offices (even if the office is a closet), three years of data from Future Forum shows that the vast majority of people want to gather together, anywhere from a few days a week to once a month — but they want that in-office time to be purpose-driven.

Get Updates on Transformative Leadership

Evidence-based resources that can help you lead your team more effectively, delivered to your inbox monthly.

Please enter a valid email address

Thank you for signing up

So instead of leaning into broad return-to-office (RTO) mandates like requiring everyone to show up at the office three days a week, innovative companies are avoiding a negative employee response by focusing on moments that matter.

These selective moments are built around activities that blend business work with social time. They’re most successful when they’re designed around specific workplace goals and events that include team development, onboarding and training, new-team formation, project kickoffs, and specific times for function-specific roles, such as sales. The benefit? Companies get the upsides of deeper connection and engagement without all the downsides of RTO mandates.

Office Attendance Doesn’t Equal Engagement

To be clear, five days a week in the office isn’t just dead in practice — it’s dying in policy, too: While 49% of U.S. companies had full-time in-office policies in the first quarter of 2023, only 31% did as of the second quarter of 2024 , according to Flex Index. (These numbers are, of course, way down from before the pandemic, when an in-office policy was the default almost everywhere.) What’s growing fastest are structured hybrid work programs. The most popular varieties are two-or-three-days-a-week guidelines or policies.

Five days a week in the office isn’t just dead in practice — it’s dying in policy, too.

Mandates to be in the office “just because” have faced a lot of employee resistance. Blanket policies increase the risk of losing top talent and a diverse workforce, disproportionately cause women to leave, and negatively impact productivity. We’re seeing that one-size-fits-all approaches don’t work for the majority of teams that are now distributed across cities and even countries, and they don’t fit the distinct team rhythms in realms such as sales, finance, or engineering. As a result, leaders have generally been loath to go hard on enforcement of RTO policies.

Pre-pandemic, designing in-person gatherings that would support both work time and personal connection between colleagues was a challenge for the few teams that were spread out across cities. But remote workers are now the rule, not the exception. Zillow offers a typical example: In 2019, 99% of Zillow employees lived within a 50-mile radius of an office; today, fewer than 50% do. The company is responding to the challenge with its shift to what it calls Cloud HQ . This includes a commitment to come together on occasion as the company embraces dispersed work. As Corina Kolbe, Zillow’s vice president of talent success, put it to me, “If we’re going to be distributed, we will always also prioritize in-person connection.”

Leaders are being forced to grapple with a fundamental question: What’s the purpose of the office, anyway? Employees’ answers tend to be similar regardless of whether the research comes from Boston Consulting Group (BCG), Microsoft , or even real estate companies. For example, in a survey conducted by Cushman & Wakefield covering 2020 to 2022, employees cited socialization, team collaboration, and separating work from home as the top purposes for going to an office.

Successful hybrid leaders creatively craft what happens when employees do come together — making sure that the time includes socialization along with work. I’ve seen this in practice at companies ranging from Allstate to Zillow, across a span of industries.

Moments that matter happen at both the companywide and the team-specific levels. These moments follow tempos that build engagement, reinforce friendships, and inspire employees to dig into projects side by side. To the employees, there are clear reasons to be in the same room.

Four Essential Times for Building Moments That Matter

Companies are thinking closely about how to use in-person time most fruitfully in four broad areas of interaction. Below, I’ll go through each, highlighting some common effective work patterns I’ve seen in my work supporting a range of companies across financial services, defense, retail, and technology.

Team development: Get people together three or four times a year, with a 50-50 mix of business and social.

There’s mounting evidence that having team-level gatherings three or four times a year that blend time for socializing and building relationships and doing deep work are essential for forming deeper connections faster. That means connections both to team members and their work.

There’s clearly something that happens when humans are together for a few days, preferably spending at least half our time socially and getting to know one another through meals, team-building activities, and volunteer opportunities. Such a need is especially strong in organizations where, because of the pandemic, colleagues haven’t spent significant time in each other’s presence. I recall one team member based across the country from the rest of us who was hungry to get us all in the same room. She’d worked remotely in the past, but she’d never been in a situation where she’d spent no regular face-to-face time with her colleagues.

There is deep value in coordinated, collective time. Atlassian has shared internal data showing that employees who meet with their teams in person see a 27% boost in connection that lasts four to five months. That boost is even higher for two key groups: new hires and recent graduates.

Interestingly, and contrary to popular wisdom, sporadic office visits didn’t have the same lasting effect. Harvard Business School professor Prithwiraj (Raj) Choudhury studied team gatherings at Zapier, a remote-first company, and also found that the connections people made in person persisted unchanged for at least three months. Perhaps more importantly, he found that there was an essential requirement to design for diverse connections . Otherwise, people tended to connect along gender, age, and race. Even something as simple as shifting table setups or orchestrating cab rides can avoid “birds of a feather” flocking together.

Onboarding and training events: Use face-to-face time to get to know people and to build ties across functions.

Onboarding and training events provide great opportunities to bring people together from across the company to build relationships.

During the pandemic, many companies had to find a way to onboard employees remotely, which drove some much-needed improvements. For instance, many organizations moved the administrative aspects of a new job to something that employees could do asynchronously, such as getting paperwork done and laptops set up.

What remains, though, are interactions that can be done virtually but are disproportionately beneficial when they happen in person. There are often different in-person requirements for young, new hires during “proving out” periods. For instance, entry-level claims agents at Allstate have in-person training and work together in person while they’re learning the ropes. Then, after a couple of months, they can work from anywhere. Microsoft has found that when new hires spend a few days with their managers and teams, it drives higher satisfaction and deeper engagement. Managers, too, have said that they take a more active role in the development of new hires on their teams by meeting with them in person at least a couple of days a month.

Holding training events in person can help build stronger weak ties — the casual connections that make every company thrive.

More organizations are bringing new hires into fewer locations, especially in the case of recent graduates. For example, some companies will hire senior engineers to work anywhere but will hire people for entry-level engineering roles in just a handful of locations, even offering to pay for relocation costs. This rather old-school practice is designed to give these new hires more in-person networks and proximity to managers.

Ongoing virtual training can certainly be done successfully and provides an episodic opportunity to bring together people who have common levels of experience but often work on different teams. Holding training events in person, however, can help build even stronger weak ties — the casual connections that make every company thrive.

New-team formation and major-initiative kickoffs: Grapple together over the objectives and norms of a project.

In many organizations, major initiatives involve product development and go-to-market resources. A core group within a cross-functional team may include product managers, marketers, designers, and engineers to build the next big product launch, or the designers, communication specialists, marketers, and analytics teams to develop the next big marketing campaign.

Initiatives like these benefit from bringing teams of people together in person not just to drive a deeper understanding of the goals of a project but to build trust among team members. This is a time to talk through whether those goals align with the function’s priorities and to build social connections while having meals together. It’s a good way to focus on the operating norms of a project, such as making simple but important decisions about what tools the team will use to communicate and who will be responsible for driving updates.

Major-milestone reviews are another obvious reason to bring teams back together in person for a few days. Best practices involve combining both product and go-to-market function milestones so that everyone across functions gets exposure to both — with social activities built in. These could include having meals together or participating in offsite team-building events, such as an outdoor walk-and-talk in pairs (switching up partners every 15 minutes), taking a quirky city tour, or cleaning up a public garden as a volunteer project.

Business-function-specific activities: Let teams figure out the best in-person schedules for their needs.

The patterns of what interactions work best in person vary across both organizations and functions. Every business function likely has its own key times when being in the same room is more meaningful. For example, the finance team may gather for the monthly and quarterly close of the books. Regional sales teams may have weekly anchor days for practicing pitches. Members of the legal team who work on commercial deals may come together with the sales team during the last five days of each sales quarter. Roles that are more of what I call the “glue layer” of a company — including product management, product marketing, and program management — all tend to need more in-person time with their teams.

Discovering the best moments for deep collaboration — where the purpose behind coming together in person is clear — takes effort by leaders and teams. In its research, BCG found that teams who set their norms together were much more likely to feel productive as well as engaged compared with teams where the boss set the norms or people were left to figure them out individually.

Bringing distributed teams together drives important bonds and works best if leaders focus on moments that matter. What was once the minority — teams spread across geographies — is now the majority. The opportunity in front of all of us is to rethink how offices can become collaboration hubs. Leaders need to better imagine how we’ll support teams and functions to figure out what their own moments that matter look like. As we do so, we’ll solve for connection and engagement for the entire organization.

About the Author

Brian Elliott is an executive adviser and speaker. He is a coauthor of How the Future Works: Leading Flexible Teams to Do the Best Work of Their Lives (Wiley, 2022).

More Like This

Add a comment cancel reply.

You must sign in to post a comment. First time here? Sign up for a free account : Comment on articles and get access to many more articles.

Supported by

Disqualification Costs India a Gold Medal, but Its Future Still Looks Bright

The wrestler Vinesh Phogat had a chance to become the first woman from India to win an Olympic gold, but she was disqualified when she missed her weight class by a few ounces.

Share full article

A wrestler in a red uniform takes down one in a blue uniform.

By Jeré Longman Suhasini Raj and Yan Zhuang

Jere Longman reported from the Paris Olympics and Suhasini Raj from New Delhi. In January, both reported on women’s sports from New Delhi and Patiala, India.

Three and a half ounces, roughly the weight of a small banana, three slices of bread, a deck of cards.

That amount is usually insignificant, but is hugely consequential in sports with weight classes. This small but prohibited excess during a weigh-in on Wednesday morning kept the wrestler Vinesh Phogat from a chance to become the first woman from India, the world’s most populous nation, to win an Olympic gold medal in any event.

“It’s very shocking,” Virender Singh, Phogat’s coach, said in a brief interview, adding, “If she got the gold medal, it would have been a turning point for Indian sports.”

Phogat, 29, entered these Games as a celebrated figure, having overcome knee and elbow injuries and qualified in a lower weight class than her natural weight to reach her third Olympics. Last year, she helped lead public protests against what she and other athletes said was sexual abuse and harassment by the former president of India’s wrestling federation.

Her gold medal match was scheduled against an American opponent on Wednesday night. But at the morning weigh-in for the 50-kilogram (110-pound) category, Phogat remained 100 grams, or 3 ½ ounces, over the limit after trying to cut weight by running on a treadmill and sitting in a sauna. She had gained roughly three pounds, which is common, during replenishment after wrestling in three bouts on Tuesday.

“A billion hearts break,” became a common, deflated refrain in India. At the behest of Prime Minister Narendra Modi, India’s Olympic committee filed an appeal. But international wrestling’s rules allow no leeway. Now Phogat would get no medal at all. After the weigh-in, she was given intravenous fluids to treat dehydration.

We are having trouble retrieving the article content.

Please enable JavaScript in your browser settings.

Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.

Thank you for your patience while we verify access.

Already a subscriber? Log in .

Want all of The Times? Subscribe .

COMMENTS

"It Doesn't Matter" by Nicholas Carr Case Study
The article "It Doesn't Matter" helps managers and leaders to embrace the best business ideas. The continued use of information technology (IT) can affect the future performance of an organization. This essay explains why the ideas presented by Nicholas Carr in his article are applicable in every corporation.
IT Doesn't Matter
If so, you're not alone. Businesses worldwide pump $2 trillion a year into IT. But like many broadly adopted technologies—such as railways and electrical power—IT has become a commodity ...
IT Doesn't Matter
Information Week mentions "IT Doesn't Matter" in an article on IT budgets in its Sept. 22 issue. General Electric CEO Jeffrey Immelt appears to have touched on my article in a Sept. 25 speech at MIT, terming "stupid" the idea that now that "everyone has information technology it is a waste of money.".
6 Lessons From The Success Of 'IT Doesn't Matter'
Possibly the greatest rebuttal to "IT Doesn't Matter," (although it wasn't presented as a reaction to Carr) was published by Andrew McAffee in 2004, as a Harvard Business School case study ...
PDF IT Doesn't Matter
1. technology"is a fuzzy term. In this article,it is used in its common current sense,as de-noting the technologies used for processing,storing, and transporting information in digital form. Reprint r0305b; HBR OnPoint 3566. To place an order, call 1-800-988-0886. L e t.
"It Doesn't Matter" by Nicholas Carr
📝 The article "It Doesn't Matter" helps managers and leaders to embrace the best business ideas. The continued use of information technology (IT) can affect...
IT Doesn't Matter (to CEOs)
In 2003 Nicholas Carr wrote a provocative article for HBR titled " IT Doesn't Matter ," in which he stated: Robert Plant is an associate professor of computer information systems at the ...
Why I.T. Matters
Robert M. Metcalfe. June 1, 2004. A year ago, Harvard Business Review published a now infamous article called "IT Doesn't Matter.". Its author, the magazine's then executive editor ...
PDF IT Doesn't Matter
study by the U.S.Department of Com-merce's Bureau of Economic Analysis, less than 5%of the capital expenditures of American companies went to infor-mation technology.After the introduc-tion of the personal computer in the early 1980s,that percentage rose to 15%. By the early 1990s,it had reached more than 30%,and by the end of the decade
IT Doesn't Matter
This widely debated article now includes 14 Letters to the Editor. As information technology has grown in power and ubiquity, companies have come to view it as evermore critical to their success; their heavy spending on hardware and software clearly reflects that assumption. Chief executives routinely talk about information technology's strategic value, about how they can use IT to gain a ...
Interview
About a year ago, the Harvard Business Review published an article titled "IT Doesn't Matter." It ignited a vehement and often acrimonious debate over the value of information technology.
IT Doesnt Matter
This is an audio lecture for the Case Study 1 reading, "IT Doesnt Matter" for the course Advanced Applications of IT in Business
'IT Doesn't Matter:' 10 Years Later
Ten years ago Nicholas Carr created an uproar by arguing that 'IT doesn't matter.' Guest Columnist Irving Wladawsky-Berger argues that the widely misunderstood piece was making the point that in ...
Nick Carr's 'IT Doesn't Matter' still matters
Nick Carr's article "IT Doesn't Matter" was published in in Harvard Business Review in May 2003 and ignited an industry firestorm for its perceived dismissal of the strategic value of IT.
IT Doesn't Matter A review of Nicholas Carr's Perspective on
Does" IT Doesn't Matter" Matter?: A Study Of Innovation And Information Systems Issues. 2012 • ... case studies, and digital analytics surveys. The findings of the study contribute to the evolving discussion on how the innovative digital globalization powered by free-flowing data with evolving customer experiences is giving way to the success ...
"IT Doesn't Matter" by Nicholas Carr Essay (Article Review)
190 writers online. Learn More. In the article "IT doesn't matter," Carr (2003) claims that every technologic innovation sooner or later becomes ubiquitous and conventional (p. 42). It is mentioned that technological evolvement is cyclic and is constituted of several phases. When a commercial potential of a technology is recognized, it ...
Why IT Does Matter
Matter. HBS professors F. Warren McFarlan and Richard L. Nolan respond to the much-discussed assertion by Nicholas Carr that company investments in IT are less and less likely to produce competitive advantage. Harvard Business Review editor-at-large, Nicholas G. Carr, ignited a firestorm in the opinion piece "Why IT Doesn't Matter" published in ...
"IT Doesn't Matter" by Nicholas Carr: A clear paradox?
If you have read Nicholas Carr's 2003 article "IT Doesn't Matter," I am sure you know why this article is still a topic of interest even today. Though Carr wrote this article almost two decades ago, the fact that it is still being discussed and debated globally shows the astute quality of his ideas, the compelling nature of his narrative, and his gift of captivating readers despite the barrier ...
Critique of the Arguments of Carr's: IT Doesn't Matter
Critique of Argument 4 The fourth set of arguments that Carr makes is that information technology vendor should: follow not lead, become tight-fisted with spending, and manage cost and risk fC iti ue of the A gu e ts of Ca 's: IT Does 't Matte , C. Madewell, 8 meticulously (Carr, 2003, pp.11-12).
John Fetterman's concerns about Josh Shapiro as VP didn't ...
Sen. John Fetterman reportedly put a word in against Gov. Josh Shapiro as a potential running mate to Vice President Kamala Harris, bringing national attention to old tensions between the two ...
Minnesota Stands Out for Its Moderately Progressive Tax Code
Most state tax systems fall short of the public's perception of fairness by charging the rich lower tax rates than everyone else. Minnesota is among a small group of states that has chosen a different path. In Who Pays?, our comprehensive study of state and local taxes, Minnesota stands apart from the pack with a moderately progressive tax system that asks slightly more of the rich than of ...
Hybrid Work: How Leaders Build In-Person Moments That Matter
Office Attendance Doesn't Equal Engagement. To be clear, five days a week in the office isn't just dead in practice — it's dying in policy, too: While 49% of U.S. companies had full-time in-office policies in the first quarter of 2023, only 31% did as of the second quarter of 2024, according to Flex Index. (These numbers are, of course ...
PDF IT Doesn't Matter.
IT Doesn't Matter. HBR AT LARGE Doesn't Matter by Nicholas G. Carr As information technology's power and ubiquity have grown, its strategic importance has diminished. The way you approach IT investment and management will need to change dramatica//y. N 1968, a young Intel engineer named Ted Hoff found a way to put the cir- cuits necessary for ...
Ailing from a bad case of 'Fill-Out-Formitis'
Doesn't matter if you visited Doc Treatment two weeks earlier and drained your pen on a ream of forms; when you arrive for your follow-up, someone hands you another ream of paper and a new pen ...
More Divided Than Ever? Not When It Comes to Charity, Study Finds.
Rising polarization doesn't appear to affect charitable behavior, according to a GivingTuesday survey of donors in seven countries
Indian Wrestler Vinesh Phogat Disqualified From Paris Olympics Gold
The wrestler Vinesh Phogat had a chance to become the first woman from India to win an Olympic gold, but she was disqualified when she missed her weight class by a few ounces.

Nicholas Carr

More From Forbes

IT Doesn’t Matter (to CEOs)

Partner Center

MIT Technology Review

Why I.T. Matters

Keep Reading

Supershoes are reshaping distance running

Why does AI hallucinate?

The return of pneumatic tubes

Stay connected

Our Network

Interview | Nicholas Carr – The Argument Over IT

The First-Mover Advantage

The CIO’s Burden

Related content

Five generative AI tips for every business leader

Four generative AI use cases for businesses

CIO Leadership Live Australia with Alan Sharvin, Chief Information Officer, Tabcorp

CIO Leadership Live India with Irshad Saifi, Director IT and Digitization (CDIO), Shardul Amarchand Mangaldas & Co

CIO Leadership Live ASEAN with Sandeep Pandey, Group Chief Technology and Operations Officer, FWD Insurance

GitGuardian scans code to detect, fix secrets leaks

Our Network

Nick Carr’s ‘IT Doesn’t Matter’ still matters

Making a career of it

March to the cloud

Related content

More from this author

Show me more

Key rules for Linux sysadmins

Google’s scientists lift lid on Effingo at Sigcomm 2024

Has the hype around ‘Internet of Things’ paid off? | Ep. 145

Episode 1: Understanding Cisco’s Converged SDN Transport

Episode 2: Pluggable Optics and the Internet for the Future

How to see how many days passed since the beginning of the Linux epoch

How to use the pv command

How to use the stat command

“IT Doesn’t Matter” by Nicholas Carr Essay (Article Review)

Why IT Does Matter

Rapport: The Hidden Advantage That Women Managers Bring to Teams

The Harvard Business School Faculty Summer Reader 2024

Why Boeing’s Problems with the 737 MAX Began More Than 25 Years Ago

These Management Practices, Like Certain Technologies, Boost Company Performance

Sign up for our weekly newsletter

Products mentioned on this page:

SUBSCRIBE TO THE LATEST CONTENT

Related Posts

Get the latest content delivered right to your inbox!

Awards & recognition

Solutions by industry

Related solutions

One-stop solution to all Log Management and Active Directory Auditing

Critique of the Arguments of Carr's: IT Doesn't Matter

Related Papers

RELATED PAPERS

RELATED TOPICS

Minnesota Stands Out for Its Moderately Progressive Tax Code

Carl Davis Research Director

Full Archive

Related Content

Hybrid Work: How Leaders Build In-Person Moments That Matter

Get Updates on Transformative Leadership

Office Attendance Doesn’t Equal Engagement

Four Essential Times for Building Moments That Matter

Team development: Get people together three or four times a year, with a 50-50 mix of business and social.

Onboarding and training events: Use face-to-face time to get to know people and to build ties across functions.

New-team formation and major-initiative kickoffs: Grapple together over the objectives and norms of a project.

Business-function-specific activities: Let teams figure out the best in-person schedules for their needs.

Related Articles

About the Author

More Like This

Disqualification Costs India a Gold Medal, but Its Future Still Looks Bright

COMMENTS