IDC Forum: Has IT lost its strategic edge?

The debate over whether IT gives businesses a competitive advantage roared into life again this week when two industry observers...

The debate over whether IT gives businesses a competitive advantage roared into life again this week when two industry observers offered starkly different views of the role IT can play in transforming business strategy.

Speaking on the first day of the European IT Forum in Paris, former editor of the Harvard Business Review Nicholas Carr said that any strategic advantage from being on the cutting edge of technology was likely to be both short-lived and expensive.

Following him to the rostrum was business consultant Don Tapscott, who told the conference that IT could spark business model changes that gave companies a strategic advantages over rivals.

"You may gain an advantage with IT implementation," said Carr. "However, your competitors can see what you've done and replicate it." He pointed out that interoperable products based on industry standards allowed the speedy replication of systems.
He acknowledged that IT was integral to modern business practices and a prerequisite for survival, but saw its role in an age of open standards as akin to electricity or water supply - an infrastructure to be managed rather than a strategic tool.

"Distinctive systems once provided competitive barriers," Carr said. "But barriers have eroded as accessibility, affordability and standardisation have increased." He added that the economies of scale provided by standardised open systems outweighed the costs of the temporary advantages offered by proprietary systems.

Tapscott argued that IT was more than just a platform for businesses. "The internet is a platform for programmability and on that platform companies can make innovations," he said.

Tapscott said that the internet had become a hypernet, with billions of objects around the world acting as smart communication devices. "First movers and early adopters seize this innovation and get an advantage."

To prove his point, Tapscott polled the audience. A show of hands revealed that while most attendees used to buy books, only  half a dozen were actively looking for another online provider.

Relegating IT to no more than an infrastructure to be managed was a response to the dotcom bust, recession and terrorism, said Tapscott. "Don't throw out the technology baby with the dotcom bathwater."

On a panel afterwards, chaired by  TV journalist Jeremy Paxman, Carr noted that many IT projects fail. "The danger of technology evangelism is that it leads you to take more risks and spend more than you should. The right approach for companies is a more conservative approach," he said.

"By giving up on IT innovation, you're not giving up on just IT but on business innovation as a whole," countered Tapscott.

Marc Ferranti writes for IDG News Service

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