IT Doesn’t Matter

Nicholas Carr – Harvard Business Review 2003

 

(This note is intended to be read by my MM UGM students commencing the lecture on May 5^th 2008. The note is not a summary of Carr’s paper. It is written after I read Carr’s paper. The note serves as a trigger for a discussion that may increase our understanding. Please do comment! I also invite comments from general audience)

These are some files you need to read:

Here is Nicholas Carr’s HBR article carr_does_it_matter.pdf and the debate letters does_-it-_matter_debate_letters.pdf.

The following 2 (two) files I have already forgotten where they come from, but you can find it open in the Internet. They are sample chapters of a book (what is the title? can somebody help, please?

The first chapter entitle Define the Goals and the second chapter, Ask the Right Questions.

Define the Goals

Ask the Right Questions

 

 

The following file is from MIS Journal. The paper describes IT value. What is the value of your IT?

business-value-of-it-investments.pdf

They are in, my opinion, are very good chapters. A Noble Prize winner, Isidor I. Rabi said “Asking Good Question Make me become Scientist” quoted by Thomas Friedman in his book The World is Flat.

IT investment & expenditure are high but the impact is low.

IT projects not always a success

Most IT projects are failures.

 

How to make IT a success?

 

IT is not the goal. IT is the means to achieve the goal.

 

The goal is business success (increase profits, decrease costs, information-based decision making)

 

IT has always been considered as the infrastructure – the hardware, the software, and the communication network.

 

A good IT may end up not being used by the expected users (due to lack of understanding about

the benefits of the IT). Therefore, users are important. How to make users USE the IT?

 

The user behavior in using IT must comply with the standard practices. Therefore, a procedure is required.

 

An IS (Information System) consists of Information Technology (hardware, software, communication network), users, procedures, and data.

 

Among the six components of IS, only one component will not become obsolete (out of date). It is the data. Data never become obsolete because in decision making, historical data plays a very important roles. Forecasting can not be done without historical data. Therefore, DO NOT DELETE your DATA. It will be useful later.

 

Michael Porter’s Value Chain

 

Data –> Information –> knowledge –> wisdom

 

Organization performs better when it knows everything about its employees, its assets and liabilities, its customers, its competitors, its environment, etc.

 

Data are processed into information. Information are the components of knowledge. The accumulation of knowledge leads to wisdom.

 

How we use IT is more important than IT itself.

 

One data about a prospective customer entering your shop may not tell many things about your business. But, if you consistently record the number of customers entering your shop everyday, you

eventually can plot a graph displaying the fluctuation of the customers. In addition, if you record also the details of their purchases, then you know who your customers are, what are the preferences, what is their shopping behavior, etc.?

 

How then are you going to maximize the valeu of your IT investment?

 

How to avoid over-investment in IT?

 

How to avoid failure in IT project?

 

What are the characteristics of a successful IT project?

 

What are the characteristics of IT projects which lead to failure?

 

Why is it so expensive to get information? (e.g. Buy a computer, set up the networking – register

to an ISP, search the information, leverage and harness the value of the information, monthly fee plus

hourly/data packet-based cost)

 

How do you reclaim the capital expenditure for IT?

 

How do you reclaim the bandwidth? Can you reclaim “unused” bandwidth?

 

How the customer can be sure that the “usage meter” provided by the ISP is indeed displaying

the real usage? Who certifies the tools?

 

How to manage a multi-year IT projects? What changes do we experience during that multi-year period?

 

When should we replace our IT equipment? When there is a new technology? Isn’t that very expensive?

 

How to do data management?

 

How to do information management?

 

How to do knowledge management?

 

How to do wisdom management?

 

(The students should read my e-comments in the e-Indonesia magazine)

 

Duri, April 24^th 2008