Does IT Matter?

The information technology debate

During a recent event in New York City, author Nicholas Carr spoke to a host of folks from leading financial services companies. He covered topics from his controversial book – Does IT Matter? – and discussed information technology with his fellow panel members and the audience. The panel consisted of Carr, Keith Collins, chief technology officer at SAS, and Michael Radziemski, CIO and partner at Lord Abbett. Bob Evans, editorial director at InformationWeek, served as the moderator.

Evans spoke to the crowd first, giving a primer for the event, "Nick Carr wrote a controversial book called 'Does IT Matter?' and it strikes very close to home for all of us. Today he is going to cover some of the key theses that he's brought forward in his book, and how he feels these matter, as well as where things go from being a commodity to being strategic," he says. "We'll also discuss how to avoid the trap of falling too much into the commodity area. We'll take a look at business processes and the volume of capital expense that IT consumes. We'll cover the way in which business needs to move to have IT become more strategic and beneficial to the business, shareholders and customers, and how IT can boost productivity. IT is central to business strategy and we're going to try to really dig into some of these issues today."

The debate begins
Carr began the discussion by saying, "When anyone hears me ask the question, 'Does IT matter?', their immediate response is, 'Of course it does.' Information technology today is everywhere in business." He went on to say, "If you look at it from a process standpoint, it's hard to imagine any major business process today being able to continue without the IT underpinnings that have come to form the central network of business."

He continued, "Certainly it's a prerequisite to survival. A company of any size today couldn't imagine operating without IT any more than it could imagine operating without electricity."

Carr's argument was that, to date, nothing has proven whether IT is itself a strategic resource. In other words, does the manner in which a company uses IT innovation help it distinguish itself from competitors in a way that lasts long enough to provide a real competitive advantage?

A pro-IT rebuttal
Before addressing the attendees, Radziemski readily admitted that, "I think that if you're in a growing, thriving company that is trying to innovate from a business standpoint, IT does have a role to play."

He outlined a three-step approach to being successful with IT, or in his terms, being a "business innovator." The first step would be to ensure technology is aligned with business, in terms of spending, priorities and activities. The second step is transparency. A business should be able, at all times, to answer: What are we doing? How much are we spending? What is the status of our projects? According to Radziemski, those answers need to be a proactive effort on the part of IT.

"The third point, I would say, in the recipe for success is execution," he said. "I think we've all seen stories in the industry of projects that have gone awry. So, we would love to take execution for granted, but as practitioners in the field, unfortunately, we can't."

The SAS approach
Collins spoke about the need for IT to attach itself to the business. He noted that the No. 1 issue, according to CIO Insights Analysis, was "how does line of business and IT interact?" Collins' answer: IT governance, or skills.

"If you look at IT spend this year, Gartner's growth is a 2.5 percent increase, but if you look at overall spend of the portfolio, there is clearly a big shift to this new space," noted Collins. "Some of us are calling it business analytics in terms of moving away from just operational spend, pushing the quantity, getting value, really turning the screws on the vendors."

And in terms of putting the screws on vendors, he noted that SAS sees much activity and consolidation in its marketspace. "If you look, just in the past year, how data integration has been merging into the definition of business intelligence, and this year the growth of the term "business analytics." Now you have data integration, business intelligence and analytics coming together as a suggested single framework. Later on I'll talk about what that means in terms of running your business."

An experienced crowd
Many in the audience had years of IT experience, and they were full of questions and comments for the panelists. One attendee had this to say: "If you look at whenever a technology is young and immature, it's so complicated that it requires its own language. And I think that's certainly been true of IT, and it's been magnified by some in the IT vendor community who see specialized language as kind of a marketing tool. But what it ends up doing is it has disconnected the traditional IT department from the best of the business, those who really don't understand and don't want to understand that specialized language."

Before the event was over, Carr noted that financial services organizations have done quite well at adopting technology to provide a competitive advantage. "Financial services [firms] were such an early and aggressive investor in information technology because there are these massive pools of capital that have allowed big financial services companies to invest in pioneer technology."

After some debate and review of various scenarios, the crowd came away with the notion that yes, IT does matter and it is becoming ever more tightly coupled with, and inseparable from, business issues.