It Doesnt Matter
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This document discusses how IT spending as a percentage of capital expenditures by companies has increased dramatically since the 1960s but begins to level off in the 2000s. It argues that simply spending more and more on IT will not provide a lasting strategic advantage, and that companies should focus instead on cost-effectiveness and security. While new technologies can initially provide benefits, those advantages are often temporary and do not guarantee long-term success.
It Doesnt Matter
- 1. IT Doesn¡¯t Matter Nicholas G Carr May 2003 1 Jaana Metsamaa 2009
- 2. 1970 2
- 3. 1970 2
- 4. 1970 2009 2
- 5. more power! more potential! 1970 2009 2
- 6. companies spend a lot 50% 50% .com Bubble 38% 30% 25% IT 13% 15% 5% 0% 1965 1980 1990 2000 % of money spent on IT from Capital Expenditures 3
- 7. does it matter? 4
- 8. does it matter? Does the increase of availability and potential increase its strategic value? 4
- 9. de?ciency 5
- 10. don¡¯t believe me? electricity railways (MW) (1000km 6
- 11. don¡¯t believe me? electricity railways (MW) (1000km 6
- 12. don¡¯t believe me? electricity railways computers (MW) (1000km (millions) 6
- 13. American Hospital Supply 1976 ASAP for ordering hospital goods electronically 7
- 14. a new technology might give you an advantage 8
- 15. a new technology might give you an advantage but just for a while 8
- 16. just pouring more and more $$$ into it wont give you an advantage. 9
- 17. what you should be thinking about 10
- 18. cost effectiveness 11
- 19. cost effectiveness best results aren¡¯t from companies with biggest spendings 11
- 20. follow don¡¯t lead 12
- 21. follow don¡¯t lead innovaing is expensive 12
- 22. It could kill you 13
- 23. It could kill you what if you were hacked? 13
- 24. IT matters 14
- 25. IT matters but just a lot of computers won¡¯t give you strategic advantage 14
Editor's Notes
- \"Information technology is best understood as the latest in a series of broadly adopted technologies that have reshaped industry over the past two centuries - from the railroad to the telegraph to the electric generator. For a brief period, as they were being built into the infrastructure of commerce, all these technologies opened opportunities for forward-looking companies to gain real advantages. But as their availability increased and their cost decreased - as they became ubiquitous - they all became commodity inputs. From a strategic standpoint, they became invisible; they no longer mattered. That is exactly what is happening to information technology today, and the implications for corporate IT management are profound.\"
- Behind the change in thinking lies a simple assumption: that as IT’s potency and ubiquity have increased, so too has its strategic value. It’s a reasonable assumption, even an intuitive one. But its mistaken
- Behind the change in thinking lies a simple assumption: that as IT’s potency and ubiquity have increased, so too has its strategic value. It’s a reasonable assumption, even an intuitive one. But its mistaken
- Behind the change in thinking lies a simple assumption: that as IT’s potency and ubiquity have increased, so too has its strategic value. It’s a reasonable assumption, even an intuitive one. But its mistaken
- As IT power and presence have expanded, companies have come to view it as a resource ever more critical to their success, a fact that is clearly reflected in their spending habits.
- What makes resource truly strategic - what gives it the capacity to be the basis for a sustained competitive advantage - is not ubiquity but SCARCITY.