IT Doesn't Matter--Business Processes Do: A Critical Analysis of Nicholas Carr's I.T. Article in the Harvard Business Review

As anyone who is responsible for strategic IT planning can tell you, it's a new dawn in IT these days - especially as IT spending relates to improved business efficiencies and the bottom line. While Carr's HBR article is a simplistic and flawed interpretation of where IT is heading, Smith and Fingar present a well thought and presented, point by point analysis of, not only what is wrong with Carr's misguided vision, but also solutions offered by new directions in IT of paramount importance to strategic corporate management. A significant element of my company's competitive edge came from developing advanced business processes, so we are already up to speed on the directions towards business process management espoused by Smith and Fingar. I do, however, know of many examples of companies and organizations that might be looking for excuses to minimize their IT expenditures due to problems with previous flawed IT strategies and execution. For those companies, Carr's article might provide the perfect justification to retrench. This book, on the other hand, is for forward thinking strategists who are looking to optimize and innovate to maintain and improve their efficiency and competitive edge.

Nicholas Carr's article in the Harvard Business Review has taken the backlash wave from the IT overspend in the 1990s to spin a sensational story, a story that some rebuttals have called "dangerous," for it distorts the role of IT in creating competitive advantage. Companies are indeed struggling with the issue of IT's role, and it is difficult to break out of existing misconceptions of IT. This is evident in David Forbes' review of this book. He seems so locked into his perceptions that he distorts what the book actually says. For example, he says the Smith & Fingar's vision is that of expensive ERP sysems of the past. He must be so busy railing against ERP systems that he failed to actually read the book's related discussions that are in fact in agreement with him. And, about Forbes' comments about usability... did he actually read the section on amenity? Again, agreement.The point is that when it comes to IT, many people bring much baggage to the subject, for IT means many things to many people and is an emotiaonally charged subject for those with a particular stake in IT. Many read a book like this and filter it through their individual bias to the point where they distort what the book actually says. As a business manager using the book to foster discussion in our company, I suggest readers go through it twice: once quickly with their defensive mechanizms in place, and then again with a keen eye on what the IT issues portend for their company going forward. We are doing precisely that in our company and find the book to be the focal point of our deliberations, for it covers all the key issues of the past and those setting the stage for the future. Correct thining about IT, not preconcieved notions or turf bias, is essential for companies to move forward, for as the book says, IT is not about the past fity years of business automation and its inherent limitations, IT is about a "change in kind" in business automation where the focus is not on data and record keeping, but on the way business is conducted. And yes, the authors totally agree that usibility is key to that, for it's business people who must manage their own business processes.

Smith and Fingar take Carr's assertions to task, and tear them to shreds. With clever observation after clever observation, they show how and why Carr is extremely misguided -- and how and why the corporate landscape is and should be changing from IT-heavy to business process management-focused. Smith and Fingar are truly onto something: a means being adopted by many companies to help them become agile, customer-centric, real-time enterprises, with business users, not IT staffers, leading the way. Read this and catch the BPM wave (make that Third Wave, as Smith and Fingar discuss in another work).

When Carr published his ill founded thesis in HBR a few months back it shook the corporate world. It was like telling the CEOs that they were stupid to spend millions on IT to achieve competetive advantage. Relating IT to commodity was not only erroneous but showed a lack of pragmatic involvement by the author in issues dealing with IT. In my 35 years as senior executive I have never encountered such an irresponsible behavior (HBR+ Carr= ATTENTION).The response by Peter F and Howard S is timely in that it attempts to explain rationally the present short comings of IT in delivering its true potential and organizational culture that has focussed on cost management via IT. The authors, I believe lay out the very foundation of the future and next generation of IT solutions that will be driven by businesses where the user will orchestrate services that will be delivered using the under pinnings of IT infrastructure. Yes we got rid of the Glass house only to have built a plexiglass replacement. IT geeks are notorious in delivering the perfect mouse trap and take inordinate time. Yes user's need to take charge. I have read the book and fully recommend that any one who has any responsibility in IT should do so before the ill founded thesis in Carr's article hits the corporate board room and you will have to hurriedly prepare your response. There is a lot of ammunition here that help us in delivering the right message- that IT does matter not in its components form like the PCs, network, or routers-yes they are commodities; but the software (services) are the value that will create competetive advantage for our companies for a long time to come. The changing customer environment mandates a responsive process driven business where IT remains supreme and evolving.

Linking BPM to Carr's argument that "IT Doesn't Matter" is a clever move by Smith and Fingar, but it is a justified one. In their last book they claimed competitive advantage through BPM and new BPM technologies. In this book they push against the arguments made by Carr in this HBR article from May "IT Doesn't Matter", and they attempt to set out holes in his arguments and his oversight of the emergence of the BPM movement. I love it, like I love their previous book BPM3W. Clearly this book had to get to market fast, so it's quite short, but it take a completely different look at BPM from another dimension created by Carr, and the two books make good companions. btw guys, I'm still waiting for the New Directions book mentioned in the cover of BPM3W. The integation of industry comment, with new ideas, works well, and weaving in comments from people that wrote to them during the writing helps give alternative views not previously published.