News

Tech.Ed Reporter's Notebook: What's the matter with IT?

• By Jack Vaughan
• June 10, 2003

The "Harvard Business Review" (HBR) recently published a piece that has gained attention among the media savvy and the just plain technology obsessed. "IT Doesn't Matter" by Nicholas G. Carr (HBR, May 2003) was a topic as well at a keynote for developers and system administrators at Microsoft's Tech.Ed Conference last week in Dallas. If one follows Mr. Carr's premise to its conclusion, IT someday soon, one can surmise, will be taken for granted and will be no more revolutionary than the railroad is today.

The buzz about the article, which challenges the long-term future of IT as a power for business and social transformation, carried over to a luncheon panel for press members held at Microsoft Tech.Ed.

Why does this have any bearing on the work of developers?

Well, management gurus that often take their lead from HBR may in turn catch the ear of managers at your company, who may just be ready to take a dimmer view of IT costs and potentials. If your projects get a tougher grilling from the pointed heads of power, this may be one reason why.

In Dallas, with Microsoft on stage, there were plenty of folks ready to refute HBR's notions. Read our Reporter's Notebook. Forewarned is forearmed!

At the Tech.Ed panel luncheon, moderator Darryl Plummer, Gartner analyst, set the tone, summing the HBR item. The article suggests IT becomes a commodity for most, and an advantage only for the first movers, he said. After the first rush, everyone has access to the same basic technology, and it is thereafter something from which no one can gain strategic value. In the article there is a leap from the discussion of technology infrastructure to broader conclusions that may not be supportable, Plummer suggested. Plummer's own premise is that IT is more like an arcane art than it is a science or engineering discipline. Thus, he said, it is nowhere near as well understood as is a railroad utility.

1) Notes on comments by Nathan Hanks, director of technology, Continental Airlines:

If you look at the work of classic economists, said Hanks, they will say profits are eaten away in the long run. Money is made in frictional gains between paradigms. That can add up over time and you can set yourself off from competitors. One way Continental has used IT to do this is via customer kiosks at the airport, which provide self-ticketing and reduce Continental's cost of doing business. Over time it adds up to productivity improvements, said Hanks.

This reporter would add:

It is true that the infrastructure required to build a kiosk has become a commodity in recent years as the Web happened. But clever apps that ride on the kiosk could keep developers, and flyers, busy for many years.

2) Notes on comments by Gafar Lawal, director of architecture, Merrill Lynch:

The HBR article is a shallow misread of the trend in the industry, said Lawal. IT is the use of technology to enhance a business, he said, and that includes the classic servers and the software. Merrill Lynch uses software, customizes it and delivers unique intellectual property (IP) to clients.

If some part of the technology is becoming a commodity, Merrill Lynch is happy to say, indicated Lawal, "let it be commoditized." But if it is something unique to the company's mission, that is a different matter. "It is good for us to maintain the strategic advantage we have over competitors," he said.

This reporter would add:

Wall Street has been an example of leveraging IT for competitive advantage. It has not necessarily been an example that can be carried over into every other business in America. Distinguishing between what you can take from off the shelf, and what you should plan to build yourself, is a key task for programmers looking ahead.

3) Notes on comments by Brad Sherrell, assistant vice president of IT, Pacific Life:

When you think about IT, you may start to compare it to a utility company, Sherrell said. In fact, elements can be likened to a utility. But when you look at intellectual capital, the business rules in your software system is what you use to compete, he said.

Sherrell pointed to policy-making, the lifeblood of insurance. The software Pacific Life has created to calculate a policy draws value. But it can have many ways in which to be delivered, with each way a commodity of sorts. The policy calculator, he said, can run online or in client/server mode, and the company is looking at mobile delivery. Pacific Life is already exposing the calculator internally in a Web services mode and that may soon "flow externally," Sherrell said.

This reporter would add:

Harvard-style gurus are too quick to confuse the message, the messenger and the originator. Certainly, technology infrastructure looks like a utility ... It is! But what you do with those pipes makes all the difference.

4) Notes on comments by Rachel Mileur, director of e-commerce system development, Airborne Express:

At last! A technologist sees some merit in the HBR article. Airborne's Mileur said her IT group looks to manage part of the organization as a commodity. The company has to lower the cost of mainframe operations but still add functionality. While the company has Unix in the shop, there is a deliberate effort afoot to standardize, where possible, on Microsoft Windows software.

When Airborne looked at what competitor FedEx did in the way of tracking applications, "we decided we had to be a little leaner, that there are some packages that are [more] important," she said, and the tracking app of Mileur and crew was focused on these packages and the most pertinent data. This can be done through Microsoft Outlook, Mileur indicated.

This reporter would add:

Mileur holds a unique position at Airborne. Her company is in the shadow of two heavy hitters in technology -- FedEx and UPS. For Airborne, the money it would cost to stay even with FedEx in every function (e.g., full package tracking) might not be justified by sales. So Airborne takes another tack and looks to satisfy customers that may rather interface with the company at the Excel, Word or Outlook level, rather than directly through a Web browser interface. As always, technology is about decisions.

Tell us: What do you think? Send your comments to [email protected]

To read the "Harvard Business Review" article "IT Doesn't Matter" (available in PDF format for a fee), please go to http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=3558

For other Programmers Report articles, please go to www.adtmag.com/article.asp?id=6265