Does IT still offer competitive advantage?
In a forthcoming book called “Does IT Matter: Information Technology and the Corrosion of Competitive Advantage,” Harvard professor Nicholas G. Carr argues that the commoditization of hardware and software makes it increasingly difficult for companies to leverage IT to achieve sustainable competitive advantage. His position is that the technology has become so pervasive that, although companies can still innovate, the competitive advantage obtained by the use of IT can be neutralized by corporate rivals in short order. And so the world has reached a point “where the technology becomes a necessity but no longer remains a source of competitive advantage,” so that early adopters are “going to pay a lot for the competitive advantage of a new technology, but they won’t be able to maintain that advantage long enough to make it worthwhile.” One expert who agrees with Carr up to a point is Bill McNee of Saugatuck Technology, who thinks that Carr’s argument is too focused on IT infrastructure: “IT is not just about data transport. His primary argument is around infrastructure, and software is not infrastructure. Software is a very different game, and that’s where I’d beg to differ with Nick.” He adds that “there are very few firms that use IT as a strategic weapon.”
IDG 17 Feb 2004