It Doesn't Matter Summary Essay

936 Words Jun 9th, 2005 4 Pages
Electricity, the telephone, the steam engine, the telegraph, the railroad and…..IT? In his HBR article, "IT Doesn't Matter," Nicholas Carr has stirred up quite a bit of controversy around IT's role as strategic business differentiator. He examines the evolution of IT and argues that it follows a pattern very similar to that of earlier technologies like railroads and electricity. At the beginning of their evolution, these technologies provided opportunities for competitive advantage. However, as they become more and more available – as they become ubiquitous – they transform into "commodity inputs," and lose their strategic differentiation capabilities. From a strategic viewpoint, they essentially become "invisible."
Carr
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First, IT is a "transport mechanism" that carries digital information much the same way that railroads carry goods and power grids transport electricity. And just like these commodities, IT is "far more valuable when shared than when used in isolation." Secondly, IT is highly replicable. With the economic efficiency of off-the-shelf software and the generic business processes that are inherently available within them, the costs savings and interoperability benefits make the sacrifices of "distinctiveness" unavoidable. And, finally, IT is "subject to rapid price deflation." As the cost of processing power, data storage and data transmission has declined, so has one of the most important barriers to commoditization – cost. Again, as cost declines, availability increases, which fuels the case for the commoditization of IT. Although Carr does agree that a myriad
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