Cisco Systems' CIO Brad Boston Responds to Nicholas G. Carr's article "IT Doesn't Matter"
June 25, 2003
In the May 2003 Harvard Business Review Nicholas G. Carr asserts "IT Doesn't Matter." Cisco Systems has 1.9 billion reasons to believe IT does matter.
That's the amount of money Cisco saved last year thanks to our investments in information technology. I'm referring to the same kinds of information technology that companies around the world use to run their accounting, customer service, e-business, financial management, and nearly every other task. Thanks to our strategic use of information technology, we not only lowered operational costs but also improved customer service and created better workforce intelligence, among countless other benefits.
The key to Cisco's strategic use of information technology has been not how much we spend but how we spend it. Just like any investment, you need make the right choices. But saying there's no longer great competitive advantage to be gained from information technology is akin to saying that there's no reason people should invest in stocks or bonds because they cannot guarantee extraordinary wealth. Financial markets and technology innovations ebb and flow, but in both circumstances the wise investors can find profitable picks that separate them from the crowds.
And it has never been the case that if a company finds the right technology, it automatically wins. Information technology implementations involve a complex combination of hardware, software and business process changes. And that is, and will continue to be, how businesses distinguish themselves. Wal-Mart, Amazon, eBay, and other great companies didn't succeed because their information technology was better than others. Their vision was.
Certainly, as Mr. Carr seems to need to prove in his article, information technology is no panacea. Perhaps he was talking to someone back in the go-go 90s who tried to sell him something. But contrary to Mr. Carr's assertion, IT is becoming a more powerful tool for gaining competitive advantage, not less so. Information technology can now process more data, communicate more quickly, and act more intelligently in an increasing variety of business functions.
Ironically, the greatest flaw of Mr. Carr's article is his binary, on/off approach to information technology advancement and investment. Information technology is not a monolith and so investing in it is not an all or nothing proposition. As some technologies commoditize, others emerge. Some day significant innovations might end, but Cisco and other companies, bolstered by Moore's Law, are still advancing information technology as rapidly as ever. Now such nascent technologies as wireless, distributed storage, and IP telephony-just to name a few--are promising new business benefits. Some will prove more profound than others, but the successful companies, as always, will make the right investments and reap the competitive rewards. And new technologies won't be the only opportunities. Companies will also find advantage in using existing technologies in new ways. The first businesses to discover and implement these new concepts will gain benefits unavailable to their rivals.
The successful companies are not, nor will ever be, the ones that view information technology as a profit drain. Information technology is an opportunity. Cisco took this view and now we have $1.9 billion as proof we were right.
