December 10, 2004 By Blake Harris
In his book, Carr argues that when it comes to competitive advantage, IT's strategic importance decreases as its power and ubiquity increases. Drawing upon historic examples, Carr argues that as technologies mature and get cheaper, they lose their power to distinguish one organization from others. What makes a business resource truly strategic and what gives sustained competitive advantage, he says, is not ubiquity, but rather scarcity.
Carr is careful to emphasize that this is only true in the context of the individual organization or business. Clearly, new technologies have revolutionized a society time and again. But if any business can simply go out and purchase the same tools that competitors are using at relatively low cost, then any strategic advantage is fleeting at best and can be easily matched.
Carr makes important points, not because he is completely right, but rather because he helps to clarify how we should think about the deployment of IT. It is very easy, especially for governments, to think of IT as an increasingly standardized commodity. As best practices are adopted and standards develop, what one government is doing these days with IT starts to look more and more like every other government is doing. Carr says that the challenge for governmental IT organizations now is to move from a "we need to be innovators" mindset, to one where IT departments are creative managers of resources.
Within a certain context, Carr makes a good case. And it is admirable that in the face of opposition and controversy, he has had the courage of his convictions and continues to defend and explain his reasoning.
However, the real question, to my mind, is not how IT seems to be following the same patterns of adoption as previous "new technologies" (a premise on which Carr's case rests), but rather how and why IT is different.
Take the notion, for instance, that any competitor can deploy similar IT tools, thereby delivering essentially the same services as competitors and destroying competitive advantage. On paper that may make a certain sense. But if it were completely true, Ebay would not have become the multi-billion dollar business it is in a few short years. Yahoo's online auctions would have rapidly grabbed a significant market share of the auction pie. That clearly didn't happen.
Today, Ebay's main competition is not other online auction sites that adopted similar technological deployments, but rather the distribution channels of major retail chains. That is that market share that Ebay is now eating into big time.
For some time now, my own conviction was that the IT revolution was going to be different than other technological revolutions. The basis of this belief was that information was different than other commodities. One piece of information was not the same as any other piece of information in terms of value or importance. There is an infinite, qualitative aspect to information that made the information revolution very different from the industrial revolution. (That was the comparative so often used for many years as people began hyping the information revolution.)
Author and consultant Don Tapscott, in speaking at the Forbes CIO Conference last year in a kind of rebuttal to Carr, made this same point most pointedly.
"Take the claim that 'it's hard to imagine a more perfect commodity than a byte of data -- endlessly and perfectly reproducible at virtually no cost,' said Tapscott. "In fact, nothing in the universe is as diverse as
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