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August 26, 2003

Why IT Does Matter

Why IT Does Matter

Rebuttal to Carr's article by two Harvard Professors -

Main points:
The most important thing that the CEO and senior management should understand about IT is its associated economics. Driven by Moore's Law, those evolving economics have enabled every industry's transaction costs to decrease continually, resulting in new economics for the firm and creating the feasibility of products and services not possible in the past. The economics of financial transactions have continually dropped from dollars to cents. New entrants have joined many industries and have focused on taking strategic advantage of IT's associated economics. Company boundaries have become permeable, organic, and global in scope through IT networks and the Internet.

Three suggestions to the CEO's -

- focused on improving cost savings and efficiencies.

- another should be focused on the incremental improvement of organizational structure, products, and services.

- another should be focused on the creation of strategic advantage through extending competitive scope, partnerships (customers and other parties), the changing of the rules of competition, and the provision of new IT-based services to extend the customer value proposition.

Its in the last category where author points out that IT will be the main driver.

August 26, 2003 | Permalink


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