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IT Doesn’t Matter
Class 6: IT Investment and ROI
Nicholas G. Carr
Case Summary by: Sepideh Gazeri
Main Takeaways
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“You only gain an edge over rivals by having or doing something that they can’t have or do.
By now, the core functions of IT (data storage, processing, and transport) have become and
available and affordable to all. “ – Carr
“Corporations will adopt generic applications; business process will therefore be uniform and
without competitive advantage.” – Carr
IT buildout is close to its end.
Companies are investing more money into IT than necessary.
Delaying IT investment is a good method to cut cost and examine what processes
competitors used that proved to be advantageous/disadvantageous.
Investment in IT does not guarantee financial returns.
More in-depth Summary
IT Doesn’t Matter is composed of a main article and several commentaries that disagree with
Carr’s viewpoint. The points made above represent a good summary of Carr’s perspective. The
counterarguments are the following:
 “IT’s economic impact comes from incremental innovations rather than ‘big-bang
initiatives’.” In other words, the companies that are best off are those that slowly incorporate
IT into their strategy.
 The rate of return on infrastructure technologies (railroads, steam engines, etc.) was much
smaller in comparison to the returns (and improvements) on IT. Thus, one cannot conclude
that because IT is similar to railroads in function, it will provide the same modest rate of
returns.
 Information goods (especially of software) will not exhibit diminishing marginal returns.
 Widespread availability (and standardization) creates new business opportunities.
 With IT small businesses are given a new chance to make themselves known. The little
people can now be heard.
 The following comment made a great point: “Carr used the same software to write his essay
that I did to write his critique, yet we have arrived at opposite conclusions!” Or in other
words, technology is a tool, not the strategy.
Case Discussion / Digest Questions
There were no assignments for this article. You may find it relevant to know that the Professor
absolutely disagreed to the assertion that IT is becoming a (useless) commodity.
The secret to success is knowing who to blame for
your failures.  Despair.com
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