Back in 2003, the author Nicholas Carr wrote a provocative piece for the Harvard Business Review that questioned the link between IT and competitive advantage. He followed the article with a book, Does IT Matter, that further elucidated his critical stance on enterprise IT investments. Carr’s works were a bombshell in the IT community sparking a large number of passionate responses from prominent thought leaders and everyday IT professionals. Eight years later, the industry is still arguing about the influence and relevance of IT spend on the strategic advantage of a firm. In this post, I’d like to add my voice to the chorus of folks debating this important issue.
In 2008, the satirical website College Humor produced a video parody called 24: The Unaired 1994 Pilot. The video is 4 minutes long and provides a host of laughs. In the video, agent Jack Bauer is attempting to disarm a bomb, with support from a command center, much as he would do in the real TV series. The twist is that Jack and his support team are hampered by the technology of the world of 1994. He gets paged on a numeric beeper and has to find a pay phone in order to contact the command center. An attempt to get him bomb schematics leads to a farcical and nostalgic romp involving AOL chat rooms, geocities pages, floppy disks and dot matrix pin feed printers. In one comical moment, an agent trying to provide Jack a disarm code, loses her connection to a chat room. She turns to a colleague who is holding an oversized cordless phone and exclaims, “Damn it George, you picked up while I was doing the internet”.
The parody is funny on several levels. First, the primitiveness of the technology creates a Keystone Kops feel to the venture. This is in stark contrast to the “leading edge”, effective technology displayed on the real 24 show. The video also makes us laugh as we recognize that this antiquated technology was, just “yesterday”, considered state of the art and relevant. Now, just 17 years later, it seems silly and starkly limiting. While this is simply comedy it does raise an interesting question: How effective would the average intelligence agency be if they had made no new investments in IT since 1994?
We can ask this same question of conventional commercial enterprises: Would they be effective using a technology set common to the mid-1990’s? When looked at through the lens of multiple decades, the answer seems crystal clear; no organization would be productive and competitive using dial-up internet, pagers and floppy drives. They would be hugely inefficient when doing research, communication or data transfer. Both their customers as well as their employees would be unable to take them seriously as leaders in their market space.
Yet, when we reduce the time horizon from 17 years to shorter periods, the inadequacy of our current, legacy technology becomes less clear. Innovations are frequently dismissed as fads, unnecessary toys or threats to security and compliance. In fairness, when these innovations are first introduced, they frequently lack the complimentary ecosystem that turbocharges their effectiveness. For example, when Carr wrote about the commoditization of the internet in 2004, he could not have foreseen the explosive growth of social media and smart phones in enterprises.
While I disagree with some of Carr’s ideas, I concur with two basic premises that he raises. First, enterprises should focus on those areas of IT spend that help transform the business to be competitive. They should look to specialized service providers to handle commodity or utility functions. At the same time, IT must remain focused on the classic control functions known as CIA (confidentiality, integrity, availability). As Carr has stated, it’s hard to do IT well, it’s easy to do it bad. Whether you provide a service yourself, or outsource it, the reputational consequences of data breeches or major service breakdowns can be severe.
The next 17 years are likely to produce even greater innovation than the last 17 as the pace of change accelerates. Firms that view new technology as frivolous or too costly will ultimately fall victim to nimbler startups and more progressive traditional competitors. While innovative technology investments are not a ticket to market leadership, over reliance on antiquated technology is a death march to the corporate graveyard. The next time a luddite in your firm says that your outdated technology is sufficient, show them the 24 parody video (assuming your firm has broadband internet access!).