IT Doesn't Matter was a very interesting article that brought up some important topics effecting technology in all businesses. Among these topics are competitive advantage, cost reduction of technology, infrastructure build out, and the shift to conservatism in technology spending. These are all important to businesses deciding on an expenditure to bolster their technological liabilities. The reason many companies look at spending money is by analyzing its return on investment(ROI).
With the current saturation in all business sectors in regards to technology, competitive advantages are hard to identify. Most companies are already utilizing technology in some capacity to benefit their operations. However, it is pretty similar across the board for most companies and not "exceptional" by many standards. I would argue however that the way you utilize that technology can make it exceptional.
Take Wal-Mart and other retail giants for example such as Target. The way they do order fulfillment in store to make sure that the shelves is stocked is based off a system where every item that is scanned at a register is removed from their inventory list stored digitally. When a particular products inventory hits a certain level, it automatically generates an order to replenish from a distribution center. There are other steps in the process but this is the basic standard. When this was first introduced, it was revolutionary and provided significant technological advantage. Now, however, this becomes just the price of entry to compete on that level. It is no longer a competitive advantage.
Although this data and information is available to everyone and a cost of entry into the marketplace, execution and utilization of that system can differentiate businesses above others. The article did not explicitly point this out however and I disagree that it is not a differentiator. I think a key example of this is if you go into different Wal-Mart’s across even a local populace you may find vast differences in their Out of Stock, product that is on the shelf instead of in the backroom and other factors. Execution and unique methods of each store within the framework of that technology can truly set them apart. They can make the technology work better for them, so best practices in combination with IT becomes a differentiator.
Cost reductions on technology is one of the most significant developments in our modern society. We are in a world where computer versions that are released as "state of the art" become "standard" in 2 years at most and "obsolete" in 4 years. This advancement rate is in all industries, from true office buildings to car manufacturing.
Think to a new car you could purchase in 2012 compared to a car you would purchase today. Things like electric seats, electric windows and mirrors, etc. are becoming a standard package as opposed to "luxury". Fixing these parts and installing them is becoming cheaper every day, the same happens with processing power in computers. As technology becomes cheaper, it becomes more accessible. As it becomes more accessible it becomes a cost of entry factor and no longer one that gives an edge.
Infrastructure build-out of IT has impacted the way everyone does business. I grew up in a rural area of Minnesota and graduated high school in 2008. When I graduated from high school, we did not have internet in the house. We did have a computer and printer though. The problems we faced with getting internet was that it was incredibly expensive to get internet at our house by dial-up, it was very slow(even for the time), and it was not really necessary but a luxury. In 2010, my parents had made the decision to get internet because they "couldn't get by without it" as more of the things they interacted with required internet.
While that may be anecdotal it serves to illustrate that even within a 2 year time span, the infrastructure and utilization of the technology expanded so much that it becomes a necessity and the cost of internet is just a cost of entry to living your regular life. It is hard to think of living life without being able to access the internet. If we couldn't I would not be able to get this degree because working would not allow me to be in person in a class. The build-out has made it a standard course that IT permeates even education standards.
However, when you look at where we are in our buildout of the infrastructure we are far from complete. Advancements in how the technology functions such as 5G coming out soon or the addition of fiber optics have led to a point where the infrastructure is continuously changing and growing. I do not believe we will see an end to this buildout anytime soon.
The article indicates that spending money for IT becomes a very judicious process in todays market. We have made so many advancements so quickly that being able to fully utilize the technology and assets that we have and are paying for becomes rare. Conservatism becomes key to being efficient in your IT spending. An example that the article used that I found incredible is that 70% of data storage that companies spend money on is obsolete data that really should not be there if they implemented effective practices in data management. When IT expenditures can be up to 3.7% of revenue in most companies, that is an aspect of management that many overlook.
I would disagree with the articles assertion that conservatism is the key to having an effective IT program. You need to be willing to step out of the mold in order to find competitive advantage and ROI that others may not. Google has revolutionized the way that we do business and they did not do that by being conservative with technology. The truly innovative companies bend the limit on what can be done with technology and data analysis. The book had a limited view of how far the expansion of technology could go, because of that short-sightedness it downplayed the significance of IT as a whole.
The paradigm has shifted where IT is the cost of entry to a market. IT doesn't matter, because it is now essential and a must have in a business. It is now on the level of electricity, if you are not using it you are not going to succeed. While it has an incredible impact in the world we live in and on business, it doesn't matter because it is an assumption that you use it. However, spending smart and making investments in growth and advancements is still incredibly important. Choosing to only do what others before you have done will leave you in the dust in this marketplace where innovators continue to gain marketshare year over year. IT is the cost of entry, but advancement and growth is the key to staying in the marketplace.
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