McConnell: IT as more than an end

In his new book, "Does IT Matter?," Harvard Business School professor Nicholas Carr proclaims his answer, "Not anymore!" On the book's dust jacket, Microsoft Corp.'s Steve Ballmer responds, "Hogwash!"

Carr's thesis is that information technology has changed from a strategic investment that can give a company a competitive edge to a commodity that should be managed for lowest cost. To translate this into the language of government, he would say that IT has ceased to be a transformational technology. Instead, it has become an essential utility, and government should spend less on it.

Carr's arguments resonate with many executives who see increasing costs and diminishing transformational impact from IT. They believe they have overinvested in IT and the best path to follow is that of Amazon.com Inc. and other companies where officials realized IT savings of 20 percent to 40 percent by using commercial hardware and open-source software.

Carr makes a strong case — one that the IT community needs to take very seriously. But he overshoots the mark in several ways. Most importantly, by focusing on technology, Carr suffers from the same myopia that afflicts most IT partisans. Transformation is not about technology. It is about understanding and changing information flows and organizational processes. IT is a means, not an end.

Of course, transformational changes to business processes cannot be achieved without the intelligent use of IT, just as mass-production techniques require the intelligent use of electricity. But experience has taught us that technology is neither the biggest driver for transformation nor the biggest obstacle to its success.

Secondly, Carr underestimates the power and inevitability of innovation in the IT sector. He argues that grid computing and service-oriented architectures will simply make IT more of a commodity. Although innovation drives down costs, such innovations will produce transformation opportunities for astute organizations. Net-centric warfighting and the coming workplace and commuting impact of integrated voice/video over IP are just two examples. There is no Moore's Law for electricity.

Third, in the words of a former agency chief operating officer, "If only we could deliver IT like a utility!" Unfortunately, too much of today's IT is neither mature nor stable enough to merit the utility label. Too much management is still needed to ensure secure, predictable performance.

Finally, until CIOs can couch the argument for IT investments in business and not technical terms, executives will increasingly ask why they should not set an annual target for IT cost reductions.

Bottom line: IT does matter, but Carr's arguments are not hogwash. Today, government and business executives demand that CIOs and the IT industry provide a cost-effective, predictable and secure environment. If they don't, they won't be able to convince them that IT innovations, even if they could support strategic, transformative changes, are worth the price.

McConnell, former chief of information policy and technology at the Office of Management and Budget, is president of McConnell International LLC (www.mcconnellinternational.com).