In IT Doesn't Matter, published in the Harvard Business Review's May 2003 edition, Nicholas G. Carr examines the evolution of information technology in business, noting that IT follows a pattern strikingly similar to earlier technologies such as railroads and electric power.

For a brief period, as they were being built into the infrastructure of commerce, these "infrastructural technologies," as he calls them, opened opportunities for forward-looking companies to gain strong competitive advantages. But as their availability increased, their cost declined. As they became ubiquitous, they evolved from profit-boosting proprietary resources to simply the cost of doing business. From a strategic perspective, they became virtually invisible -- they no longer mattered.

Carr, a former executive editor of the Review, created a storm of debate and controversy with the article, and expanded his analysis in his book, Does IT Matter? Information Technology and the Corrosion of Competitive Advantage published earlier this year.

Here he challenged many of business's most deeply held assumptions about IT's role today in achieving strategic success. In discussing this work with Government Technology's Public CIO, Carr offers a fresh view about the real challenges for IT executives in government.


Q: In your book Does IT Matter?, you make an essential point: The assumption that IT's strategic importance increases as its power and ubiquity increases is a mistake. Rather, what makes a business resource truly strategic and what gives sustained competitive advantage is not ubiquity but scarcity. Can you explain this more fully?

A: As you know, there has been an enormous amount written and said about computer systems and information technology. But I felt that most of what's been written and said looks at the broad effects of IT -- how it changes entire industries, the way it changes common business processes, and how it affects industrial productivity in general.

But there hadn't been much written about its effect on individual companies or organizations and their ability to distinguish themselves from competitors. It is only by doing something different, valuable to customers, that companies can gain a competitive advantage, and in turn, superior profitability.

As I explored it and looked back in history at other examples of broadly adopted technologies, I noticed a pattern. As technologies mature, and get cheaper and more standardized, they lose their power to distinguish one organization from others. Thus, they lose their strategic importance. This is what I think has been going on with information technology.


Q: And the key point here that some of your detractors perhaps miss is the difference between the effect for an individual company and the broader social effect. When you look at these earlier technologies, they reshaped society. But it was a broad reshaping. So what you are addressing here is not that the Internet or electricity are not broad technological forces of change, but rather that the advantage for the individual company adopting the technology becomes less and less significant.

A: Right. In fact, I think technologies only have their greatest broad impact on economies and societies when they lose their strategic importance, their ability to differentiate one company from the others. It is only then that they become part of the general infrastructure businesses and people use. During the times when technologies are immature and companies can use them in different ways, they have yet to become part of the general infrastructure. Thus their effect on productivity or their usefulness as a platform for new consumer products and services is limited. It is only when you move toward a more standardized infrastructure that you get your biggest broad effects.


Q: In the book, and you've also mentioned it here, you describe