Unfinished Products

IT does matter when translates to Growth and Transformation

Reading twenty years later the HBR article “IT Doesn’t Matter” (Carr, N. 2003) strikes few reflections, given the glorifying position Information Technology (IT) has in the media currently and the passionate debate on Artificial Intelligence (AI) happening nowadays (BusinessInsider, 2023; Reuters, 2023).

While the HBR article might still transpire bitterness for the dotcom boom blast (Financial Times, 2010), it does pose a valid challenge on wherever IT continues to represent strategic value and competitive advantage for organizations. One question even now repeatedly asked to CIOs is how IT investments relate to the organization’s strategic ones (Langer A.M. & Yorks L., 2018).

In its annual “IT Key Metrics Data”, Gartner highlights how nearly 40% of the interviewed organizations are neither cost efficient in their IT services, neither able to demonstrate the value of their IT investments. One out of two organizations struggle in justifying their IT value (Gartner, 2022).

At the time Carr’s article was written, core IT functions are rightly identified around the ability to store, to process and to transport data. With their costs continuing to decrease (Our World in Data, 2022), those core functions become affordable to most all organizations and IT eventually happened to be a commodity.

One of the questions that arise is wherever storing, processing and transporting data are still today the core functions of IT. Has the focus been shifting on the ability for IT to extract value out of the data instead? By becoming the driver of growth and digital transformation for companies, data created a new economy (The Economist, 2017). Thanks to ability of data to create value, the technology industry sector raised from the dotcom bubble blast declining position (BCG, 2003) to the capacity of driving organizations top-line growth (BCG, 2018).

Companies able to gain value out of their data and possessing the talents to deploy AI and automation technologies in their business processes, are the ones where IT continues to represent strategic value and competitive advantage. When looking at the organizations that denote the ability to deliver value thought out their IT services, the leading decile are characterized by spending more than 50% of the IT budget in services designed to grow and transform the business. On the other end, low performing IT organizations spend 75% or more of their budget to just keep the lights on (Gartner, 2022). Hence, wherever the IT matters for the organizations’ strategic value and competitive advantage, becomes a call on strategic technology management and not a mere question if the organization owns or not a given technologies.

Wherever the IT matters for the organizations’ #strategicvalue and #competitiveadvantage, becomes a call on #strategictechnologymanagement and not a mere question if the organization owns or not a given technologies.

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As accurately envisioned in Carr’s article, purchasing software as a service has been transforming IT in a utility industry. Customers purchase or rent IT technologies from providers on Internet using cloud capabilities – the article mention “the grid”, the term used at the beginning of the millennium for what we call today cloud technology. Cloud enables organization to focus their IT strategy on aligning with the business objectives and the core differentiators of the business. CIOs and IT leads are so less caught on the continuous straggle of catching up with new technologies and the challenge of building all those capabilities in house.

This IT strategy is not free of risks for the organizations: CIOs and IT leads needs continuously trade off what to outsource and what to own. The increase of complexity and performances of technology is creating a monopoly for tech giants as for example they seem to be the only players in the position to exploit at scale Generative AI (Japan Times, 2023). As at the time of Carr’s article, having much of the organizations’ IT spend imposed by vendors’ strategy remains a threat for CIOs still today.

In its strategic intent of integration with the business, IT in the recent years has been evolving and pursing the opportunity to integrate other type of technologies deployed in the organization. With the introduction of Industry 4.0 (Deutschland.de, 2014), organizations have been exploiting the opportunity to integrate Information and Operational Technologies to increase competitive advantage by highly digitize and connect production systems, machines, products and workforce. Convergence of technology as encompassing Information, Operational and Science Technologies is a novel technology trend (Accenture, 2023) ,creating new growth opportunities (ARK Invest, 2023) for those CIOs and IT Leads keen to continue to ensure IT does matter to their organizations.

The attention posted by Carr’s article 20 years ago on the real IT value is still a daily challenge for each of the actors in the IT industry. Not every lead is ready to demonstrate if and how IT matters. By continuously seeking opportunities to fully integrate the business, successful CIOs and IT leads are the ones that strategically manage technology as the growth and transformation engine of the business.