Talk:Student Projects:Does IT Matter

I know a couple of you like the WIKI format, so here are some thoughts I had as to ways of cutting the topics and discussion for the meeting before class this Thursday....

erik jansen

1. Is Carr’s assertion that IT is “available and affordable to all” accurate? Does this ignore the economics of scale and the affordability of sufficient support to extract identical amounts of benefit, regardless of organization size? Said another way, is Carr right/wrong, but only in cases of certain size or other dimension. Is small business eternally damned to IT hell (vs. other larger or more far flung players)?

2. Is there a scale element (or other remarkable organizational attribute) to the decision to fund/deploy IT innovations outside a developing organization as a product for mass consumption (entrepreneurism) vs. the decision to keep in internal for strategic advantage (“intra”preneurism)? Or is this simply an “age of innovation” dynamic (early innovators in a sector of IT know-how, as was the early IBM, have no mass market to clearly deploy and sell their products)?

3. Is the transportation analogy appropriate or just simple and convenient? Does transportation (not just railroads) have an analog to the logarithmic growth that data processing power has (Moore’s law or Lentz’s law). Will Carr claim the high ground when Moore’s law breaks (as many as definitively and reasonably convincingly doing) in a decade?

4. Many say that computing (IT) as we know it lacks a paradigm to take it past the limitations of Van Neumann approaches. (Neurons “compute” in milliseconds vs. pico/femto seconds for transistors) Will Carr’s arguments reset (become faulty) if/when a new computing paradigm is launched (or will his process of technical dispersion/dilution be played out again in “fast forward”)?

5. Is the recent attention to Open Source S/W and Linux-based OS a confirmation or contradiction to Carr’s thesis?

6. (Here’s an idea set I would like to develop I think) Could we create a list of contradictions to Carr’s assertions that exist today – A single well argued exception refutes a generalization. I can think of several areas of IT where strategic edge is being built: tools for accelerating pharmaceutical research/drug discovery, approaches of data mining for more predictive retailing/merchandising, algorithms for optimizing/hardening data-communications routing, logistics mapping tools for more robust mfg and operations support, to name a few. Do these defy his claims – i.e. that IT innovation is no fodder for meaningful strategic advantage. Or are these applications outside what he would consider IT? I think his use of growth curves in this argument is contrived: he treats them like they were S-adoption curves for purposes of supporting his maturation theme. But they are not S-curves. I wonder if one could use venture capital investment levels into IT and Software sectors over time and equity values in the stock markets as measures (proxies) for the perception of strategic value by “smart” investors. Isn't economic gain (profits and the equitization of those perceptions) the quintessential definition of strategic advantage in the context of business? Any ideas here? Am I nuts?

7. Carr’s argument that companies should stop the pointless replacement of “obsolete” hardware misses a major point – hardware is not replaced because its cool to do so (although there certainly was an office social thing to who got the latest hot PC in the 80’s), but rather because the cost of maintaining it to operational and standards conformance outstripped the cost of simply putting a new, certifiably compliant machine in place. It was classically poor/unfortunate asset management (not unlike a pure production tool on the manufacturing floor that is no longer as efficient as a newer model), not an IT-related phenomenon per se.

8. Related to the above thought is: Is the real issue here that IT is intrinsically quite inflexible (recoding costs high, legacy issues being what they are, etc.) in a business environment that is increasingly dynamic and demanding of nimbleness? In this sense, IT merely subjects every user (that is company) to a fixed, high cost asset that can become obsolete overnight. Is this not the real issue that drives Carr to say its time to manage IT by “just saying no”?

9. I find the many discussions about IT affecting business processes to be an intuitively powerful one. With the fact that deploying IT innovation nearly always adds complexity and change to the way organizations need to operate, is there an intriguing angle here that says its the way IT is managed that most often impacts the strategic value it can provide? Carr says little or nothing about this. He seems to lock into the generic movement and reproducibility of bytes, etc. I have never been in an organization where IT was so generically deployed.

10. Ineffective (wasteful) IT Capital spending is very common – I believe because the complexity of the products are so high, the certainty of achieving functionality and ROI payoff so low, that mistakes cannot help but be made. Yet some organizations do deploy IT better than others (look at Wal-Mart, Dell – both standouts in exceptionally low margin/competitive industries). Does Carr mistake a tough practice for a categorically non-existent one?

11. Related to the above argument, just as one can argue that email, RDBMS, web services etc. are commodities, so is advertising – available to any bidder willing to pay the going rates. Yet some get a better payoff for their advertising investments (and some get dreadful results – we all know of advertising flops – coca cola classic, etc. vs. “Got Milk”, etc.). Does this mean “Advertising doesn’t matter”?

12. Look at Carr’s definition of IT – data storage, data processing and data transporting. These are primitives, not IT technologies. They seem so much more static concepts than the dynamic nature of IT tools that combine all three in creative, co-dependant and synergistic ways. Is there a problem here with his baser premise and definition of IT? What are these three static analogs in his paradigms of railroads, electrical utilities, etc.

13. Is the better analogy for Carr’s argument really the invention of language? Especially when one adds the skills of writing (storage), reading/cognitive thinking (processing), and speaking (transport). At what point did “language not matter” to early cavemen?

14. Does Carr commingle the concepts of scale, network effects and commoditization?

15. Is Apple Computer continued existence a contradiction to Carr’s thesis? Shouldn’t they be dead if IT didn’t matter (to the graphics arts, music and creative industries)?

Additional Possible Subtopics

Here are some additional possible ideas for subtopics, or areas for further exploration) I mentioned at the group meeting:

1. Why did IT have no discernable effect on productivity until the mid-1990s? Did the standards of measure change or the fundamental nature of IT expenditures?

2. Why have IT productivity gains been unevenly distributed? Is it truly a function of competitive circumstances by industry or perhaps something else?

3. Why does IT spending not correlate with corporate performance? Do “better” companies simply reduce spending during slow economic times?

4. Is Carr’s definition of IT correct, i.e. the storing, and processing and transportation of digital information? Would another, perhaps broader, definition refute or support his suppositions?

5. What are good technology comparisons i.e. are railroad, telegraph and electricity truly relevant to Carr’s suppositions or would other comparisons refute or support his suppositions?

6. How do grid computing and web services refute or support Carr’s suppositions and what effect might they have on his recommendations?

7. Transaction and spatial organizational costs greatly affected organization size. Which is dominant today and what would be effect if Carr’s suppositions are correct and his recommendations followed?

-Al

Is implementation of IT becoming standardized?

In his text, Carr argues that an infrastructure technology becomes a commodity when, “Both the technology and modes of use become standardized.” (pg. 29) He proceeds to describe how the various aspects of IT (hardware, software and architecture) fit his definition of a commodity. He undercuts this argument, however, by discussing elsewhere the IT implementation fiascos that have cost businesses billions of dollars (pgs 110-111). Carr explains these fiascos as a symptom of adopting new technologies, but does not cite examples of increased success in implementation over the last decade.

If IT use is becoming standardized, there should be evidence of this both in increased rates of IT project success and broad adoption of standard implementation practices. A recent report of the Standish group did cite a doubling of the success rate of IT projects over the last decade (SoftwareMag.com Jan 15 2004), with the caveat that the average project size is now smaller. Standardization of project management is harder to measure. More individuals are seeking certification from the Project Management Institute, with an increase of 25% from 2002 to 2003 alone, However only 60% of Senior IT project management positions posted on the Monster job site prefer or require certification. The goal of this study is to explore recent changes both to success rates and current of IT project management standards and explore what these trends imply about the commoditization of information technology.

Resources (need pruning): Hawking, P. and A. Stein. (200) E-Skills: The Next Hurdle for ERP Implementations. Proceedings of the 36th Hawaii International Conference on System Sciences. (http://csdl.computer.org/comp/proceedings/hicss/2003/1874/08/187480235c.pdf)

Project Management Institute (www.pmi.org)

IEEE Revises Software Project Management Standard, Starts Agile Software Standard (http://standards.ieee.org/announcements/pr_1490p1648.html)

A Robust Search-Based Approach to Project Management in the Presence of Abandonment, Rework, Error and Uncertainty (http://csdl.computer.org/comp/proceedings/metrics/2004/2129/00/21290172abs.htm)

Trends in IT Project Performance and Best Practices (www.pmi-cpm.org/public/pages/news_events/ 2004_spring_conf/documents/PS_20.ppt)

Changing numbers reflect greater project success (http://techrepublic.com.com/5100-6330_11-1031505.html)

A Balanced Approach to IT Project Management (portal.acm.org/ft_gateway.cfm?id=954015&type=pdf)

Brooks, F.P. (1995) The Mythical Man-Month .

Title idea and Subtopic description from Erik Jansen

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I suggest the title of our combined paper be very much to the design Maurer and Lazowska recommended. Something like:

‘A Policy Brief: Dimensions of Merit and Demerit Regarding “Does IT Matter” by N.C. Carr’

My subtopic will be:

Analysis of Several Case Studies of IT Investment, Strategy and Return

In my research I will identify several (more than three, probably no more than six) recent historical companies, mergers or buyouts in approximately the same number of industries where IT utilization was an distinguishing, critical or elemental factor in the situation described. In all cases I will draw upon public records, management interviews (including some by me if possible) or statements, company-issued documents, or other sources as I can find them to analyze the IT issues and outcomes as they related to the positioning, industry trends and financial results achieved. I hope to identify corroborating situational data to test major portions of Carr’s platform that IT is neither a meaningful element of strategy nor a basis to expect superior ROI. While I believe many of my examples will likely (by their very recent existence) overturn much of his hypothesis in certain situations, I also expect that several of his baser conjectures may be shown to likely be truths for some business organizations that are sub-critical mass or below scale within their chosen competitive ranks and/or industry.

Given available time and success with insights gathered above, I will set as a stretch goal to develop one or potentially two new industrial analogs to the dynamics of the IT environment today (past, present, future) as compared to Carr’s reliance upon telegraph, rail and others for predicting future trends.

Which IT components are commodities?

As you know I had difficulty getting my head around Carr’s definition of IT … how can you address IT without taking the data and the processes into account?

My subtopic will be to: Analyze various aspects of IT, identifying area’s that could be classified as a commodity and area’s that should not be classified as a commodity.

Carr defined IT in the preface of his book (page xii) as “all the technology, both hardware and software, used to store, process, and transport information in the digital form”. Carr’s definition encompasses the technology used to manage the data but not the data itself. Many of Carr’s critics claim that while some components of IT are commodities, others are not. We will investigate various components of IT and evaluate whether they should be classified as a potential commodity. There are many views of IT components; one view worth exploring would be Back Office, Customer Facing and Infrastructure. Back Office would include ERP, Data Warehouse, Shared Services and a Meta Data Repository. Customer Facing would include Retail, eBusiness, Call Center, Shared Services, CRM and Work Flow. Infrastructure would include Network, Operations, Desktop and Security. I like Dan Farber’s commodity definition, “IT is a commodity if the technology itself is built out of fairly standard components that don't vary greatly among vendors or provide truly unique advantages.”

One of the references will be: Farber, Dan., “The end of IT as we know it?” Tech Update, May 2003.

Eric, I like your title suggestion! You may find this resource helpful http://www.cio.com/research/itvalue/cases.html

- Diana

Diana: Thanks for the URL. Very helpful. ....-Erik J

I'm excited to get this going. Maybe because of our commercial experiences, it will be interesting to see what we come up with as a team. we have real life stuff versus the many many platatudes we have to work with here....

I'm also anxious to see what Al is doing and read his compilation of our inputs with his... I was glad to see we will all get a chance to do a gfast edit before its posted... Thank Al!

...erik

Al, et. al.:

Thanks for the first cut here.

I have several thoughts however--

1. The summeray is explicitly to be one page, two as an absolute Maximin. It needs to be cut back substantially. As a thougt to help, I am concerned that your summary takes far too much space. can you cut it back to a paragraph (or, two, max) as are the others?

2. Also, I don't beleive we need two pages of references at this point. It appears you have dropped in a large piece of you own piece's refences. can we summarize the kinds of referemces in a single paragrah that cover the entire work (otherwise it looks like a 'staple-up' which is specifically to be avoided at all costs. I'm happy to help in doing this is it lightens your burden.

3. In my portion you edited out a key phrase 'as a stretch goal' to my adding an additional analog of the IT business model/dynamic. Can you re-insert that phrase or drop the goal -- your choice

4. I am concerned in the way that your portion is framed. I am recalling that Lazowska specifically asked us to avoid doing digestions of other's work. You may want to reframe your efforts in thightening them up (as in 1 above) to avoid this misperception that could disrupt your work.

My thoughts....thanks for the first pass. I'd like to see the next version prior to submission. I think there is far too much editing yet to be done to make this a final pass...

thanks

erik

One more thought on prelim one-pager: Concern about your piece being done in a vacuum from the rest of us....-Erik J

While I'm happy for you that you feel your piece of this paper is done and you can move on with this course as you want to -- this troubles me as it has been done in a total vacuum from the rest of us -- and necessarily turns it into the undesirable 'staple-on' to our coordinated three-way (since you are out of the loop) colaboration.... plus we are instructed to do a 20-40 pager in total. (and implicitly a shorter, more succint, report is better....) with yours done and at 13 pages, are you not squeezing the rest of us - especially since most of yours is just a summary of Carr's work? Do you have enough original material? Assunming that is the thrust of your work, why don't we reduce the summary portion of your to 1 page, at most, perhaps turning it into bullets that the rest of us can reference. Being "done" as you say, is troubling to me having not yet seen an outline, hypothesis or conclusions, I am very concerend that your work will stand out a bit as aloof of all the thinking and discussions we are certain to have over the next weeks in doing this project in the way it was intended -- a collaboration.

Wrong Venue

Erik,

We have a chemistry problem and your playing it out on the Wiki is both inappropriate and unprofessional. I organized this topic, created the project page, have organized the meetings thus far, and wrote the project summary with inputs from each member.

The team met last week at my urging (you were late and missed most of it) but we agreed on each member's topic. We should now be busy going about producing our papers rather than waiting for directions from the others. There is no hard and fast page limit - we have been encouraged to write until there is nothing else left. Please read the project requirments.

Furthermore, you know that I have offered to circulate a draft of my paper weeks ahead of the others so that you might benefit from not having read the background material. I am hard pressed to understand your underlying paranoia, but perhaps you should get going on your own subtopic.

-Al

Outline for 'Standardization of IT implementations?'

Have Information Technology projects become standardized?

Abstract

In our second “test” of Carr’s platform, we look at trends in the deployment of some of these same IT resources. Carr argues that an infrastructure technology becomes a commodity when, “Both the technology and modes of use become standardized.” Our thesis here states that if IT use has indeed become standardized, there should be evidence of this in both (1) increased rates of IT project success, and (2) broader adoption of standard implementation practices among companies. As to the former, a recent report of the Standish group found a doubling of the success rate of IT projects over the last decade (with the caveat that the average project size is now smaller). We acknowledge that standardization of project management is harder to measure than in the past. As to the latter test of our hypothesis, we find that more individuals are seeking certification from the Project Management Institute, with an increase of 25% from 2002 to 2003 alone. However, only 60% of Senior IT project management positions posted on the Monster job site prefer or require certification. While contradictory data may make an absolute conclusion difficult, we will identify recent changes in success rates and current IT project management standards and discuss what these trends imply about the commoditization of information technology.

Outline

1. . Introduction
   1. . Carr’s arguments regarding use of IT, how as a commodity it is becoming commoditized. Should show up in project success rate improvements and standardization of training.
   2. . Some type of IT projects are “boxed” now, such as small ecommerce sites. Tie into Diana’s section.
   3. . Larger IT project success rates may be up, but numbers are inconclusive and failed projects are expensive. However these are the projects that offer the biggest rewards (Eric’s section).
   4. . Training is not becoming standardized and IT project success not definitively tied to employee education or experience.
   5. . Potential impediments to standardization
      • . “Wicked problems”
      • . People centric issues
2. . Boxed products (truly commoditized)
   1. . Web sites: in a single package Macromedia Contribute provides all tools necessary to build and deploy a sophisticated website, including project workflow tools.
   2. . Payroll systems: Intuit offers financial management and payroll processing tools sufficient for many small businesses
   3. . One other from Diana’s list
3. IT project success
   1. IT projects historically plagued by schedule and cost overruns, including down right canceling of projects. (Standish Group 1994 report)
      • Boxed IT solutions show commodization at a low level, but how about larger projects?
      • Carr does not differentiate between IT application development projects and IT deployment projects, which is correct. Large scale IT deployment projects still require considerable customization and linking of interfaces, precisely the problems that plague application development.
      • Are success rates improving (focus primarily on IT deployment when possible)?
   2. CHAOS group – canceled projects are expensive!S
      • 1994 Original report, glum, estimates 31% outright failure
      • Updated CHAOS reports shows improvement, in 2000 23% outright failure, 2003 somewhat better… find those numbers again. Average project cost declined by 50% - smaller project?
      • Not great, but signs of improvement.
      • Company provides consulting services.
   3. Hackett group -2003 study
      • 30% of large IT project fail
      • “Average” companies saw project completion rate drop from 72% in 1999 to 67% in 2002
      • Analysis of “world-class” companies, i.e. those with successful IT projects finds that standardization of IT processes throughout the company contributes to success, as does having CIO that reports directly to the CEO.
   4. UK study (Computer Weekly)
      • Similar results to Standish
      • Smaller, shorter projects have significantly higher success rates.
   5. Conclusion – not clear that things are improving.
      • Shorter projects more likely to succeed, is this like shorter buildings being less likely to fall down, or are large projects not really necessary?
      • Company practices can make a difference, but few companies are implementing best practices. Why?
4. IT project management training
   1. If IT project management practices are becoming standardized, training of IT project managers should be standard the way training for electricians is. But evidence of this is scarce.
   2. Does the education of project managers contribute to IT project success?
      • Hackett group – a format Project Management Office contributes to IT project success, but not clear about training.
      • Standish group – project manager increases success, but few of the necessary skills are ones that can be directly taught. Business skills ranked higher than project management skills.
      • UK project management study – people skills very important. Women more successful, no link of project success with PM education.
   3. What certification is available?
      • PMI isn’t IT specific, but is growing in popularity
      • Companies like PMI certification, but very few require it
   4. Hard to standardize people skills!
5. Impediments to standardization
   1. People-centric activity
      • Theme throughout, it is the people and processes that make much of the difference between success and failure in a company.
      • Capabilities must adapt to the needs of individuals, how users interact with IT remains understudied.
   2. Wicked problems
      • Complex problems are hard – the larger the project, the higher the likelihood of failure
      • New ideas such as “agile” methodologies are being applied as new way of coping with complexity.
      • UK study – trend is for project to get more complicated
6. Conclusions
   1. Some IT projects are commoditized, with standard methods of deployment.
   2. Improved success rates of IT projects due primarily to companies choosing smaller projects. There is some evidence that processes help, but they are not near to standardization. Company organization and interpersonal skills of project manager are some of the most important metrics of success.
   3. Lack of standard processes prevents adoption of applicable training of IT project managers. Much skill is in “people skills”, these are hard to standardize and certify.
   4. While certain IT uses are now standard, allowing thousands of small companies to adopt time- and money-saving systems (mention Diana’s section for which ones), larger projects remain problematic and expensive. Successful projects can pay off big time (see Eric’s section), but remain risky propositions.

Reference:

Boxed software: http://www.macromedia.com/software/contribute/solutions/sm_biz/index.html http://www.intuit.com/business/

Project Management Success http://www.standishgroup.com/sample_research/PDFpages/extreme_chaos.pdf http://www.thehackettgroup.com/ab_pr.asp?id=289 http://www.computerworld.com/managementtopics/management/story/ 0,10801,81057,00.html www.cw360ms.com/pmsurveyresults/surveyresults.pdf

Project Management Training www.monster.com http://www.pmi.org/info/default.asp

Barriers to standardization – wicked problems The Mythical Man-Month http://www.touchstone.com/tr/wp/wicked.html http://www.pmforum.org/pmwt04/viewpoints04-56.htm