Difference between revisions of "Talk:Student Projects:Does IT Matter"

Revision as of 13:14, 7 November 2004

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

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, you may find this resource helpful http://www.cio.com/research/itvalue/cases.html - Diana