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The True Identity of Is

Essay by   •  July 7, 2011  •  Term Paper  •  2,639 Words (11 Pages)  •  1,151 Views

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1. INTRODUCTION:

In his seminal paper "It Doesn't Matter", Nicolas Carr proposed that "As information technology's power and ubiquity have grown, its strategic importance has diminished. The way you approach IT investment and management will need to change dramatically". It is the purpose of this paper to elaborate on one of the elements listed by Nicolas Carr, namely the overinvestment in IT.

In his thesis, Carr draws a correlation between IT infrastructure and railway and electricity infrastructure. At the earlier stages of railway and electricity development there was an obviously marked differentiation between companies that had their own railway line connecting them to their factories, warehouses and suppliers. However, nowadays railway is a utility that can be used at anytime and hence lost its' competitive strength. Carr notices that likewise, IT has reached to the phase of "vanishing advantage"

Carr recognizes the implications of information technology towards the development of economy. However, his main concern is the increased accessibility of information and resource which hinders the competitive advantage of such technology. Thus, limiting its' strategic value. Furthermore, Carr describes information technology as a commodity model which through years has "involved greater standardization ...., and least recently, greater homogenization of its functionality".

Finally, Carr presents three proposals to operationalize efficient IS strategic Management:

1. Spending less to avoid cost disadvantages due to overinvestment of unnecessary IT resources.

2. Follow, do not lead as Moore's Law implies," the longer you wait to make an IT purchase, the more you'll get for your money".

3. Focus on Vulnerabilities and not on opportunities to avoid security breaches and technical glitches.

Carr concludes with an advice on how to develop success and to attain sustained competitive advantage is to manage costs and security of IT.

2. ARTICLE REVIEW:

Under the heading of "Vanishing Advantage" Carr restricts technology into two types:

"Proprietary technologies" and "infrastructural technologies". He presents proprietary technologies as technologies which are possessed by individual companies and suggests that, from this point of view "can be foundations for long term strategic advantage" and yields competitive gain. A Pharmaceutical company, for example, develops an innovative technology to invent a new drug and patents the process, thus able to gain substantial competitive advantage.

Second are the infrastructural technologies, Carr discusses the potential of dissimilarity between proprietary and infrastructural technologies from a strategic standpoint. He describes how the latter could work more efficiently on a wider economy level, however, on a microeconomic level he emphasizes on the tendency of such technologies to evade in importance due to its lack in scarcity. Including in his debate companies in the early nineteenth century which exploited transportation of goods by railways, and how in this century such technology is standardized as best practice. Next Carr quotes Eric Hobsbawn findings in "The Age of Capital" on the prominent resemblance between railway and electric investment and information technology, supporting the idea of commoditization.

Although Carr includes many relevant historical points in his article, he makes no distinction between information technology and infrastructural technologies as a matter of fact Carr includes that information technology is following the same trends as railroads and electricity, which "from a strategic standpoint, they became invisible; they no longer mattered". I disagree with this principle, it could be applied to elements of computing such as Central Processing Units, Storage Media which are turning into commodities, however, IS provides a more complex structure of information resources. It is the ability of the company to refer to useful resources along with IT to develop a sustained advantage.

As Gibb the author of Stathclyde Business School Information System book, illustration (figure 1) on the components involved in information system, it requires a combination of four stages or resources to develop information in an organization.

Phase I - Inputs: feeding the system with information or data entry.

Phase II - Information technology: involves computer and communication technology used to process, generate, present and distribute information. It includes necessary hardware and software.

Phase III - People: involves the human factor i.e. People who develop or interact with these technologies.

Phase IV - Processes: Creation of a new system after revising and feeding data from Phase I, II and III.

As a result of this structure, data output is composed of the processed information fed from various resources.

This model expresses a more distinctive definition of information system, which was vaguely observed by Carr in his quote "as the strategic value of the technology fades, the skill with which it is used on a day-to-day basis may well become even more important to a company's success." Thus noting more generally that information technology is not the only variable in developing a strategic decision, it is vital to have other resources and skills to achieve this competitive difference. By quoting this Carr confirms that skills will be the major factor that promotes the company's productivity, however, he diminishes the value of technology as another major factor that adds to such success. In the face of intense competition, one would agree that people, information technology and database have a major impact on decisions made and performance of any organization.

However, we are faced with controversy as Carr repeatedly the straitjacket of standardization and commoditization of information technology; relates it to the boom and bust of railway and electricity technology in his quote "IT is best seen as the latest in a series of broadly adopted technologies that have reshaped

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