Wednesday, October 2, 2013

IT does matter - but people and processes matter more.

The article “The Trouble with Enterprise Software” mentions Nicholas Carr’s response to it. In his article in Harvard Business Review, Carr argues that “IT doesn’t matter”. He is of the opinion that IT has been commoditized (like the telephone and railroads) and that all firms in the market have similar access to IT resources. Because IT does not offer a competitive advantage, it is better not invest in innovative IT solutions, and that firms should follow the competitors’ lead to avoid the risk.

However, the examples like the ones mentioned in “A different game”, the author tells us how IT enabled Wal-mart to identify trends in the sale of Pop-Tarts in the event of a hurricane. Indeed, Wal-mart has reached and maintained such a dominant position due to intelligent use of IT – in not just identifying complex customer behavior, but also managing its humongous supply network. The stress is on the word intelligent because what differentiates one firm from another, even though they all have access to the same IT skills, are the processes they follow. Processes vary across organizations and are essentially developed by the people who work there, and their experiences. To be able to design the supply network so that all the shelves are always stocked and the costs are kept to a minimum requires more than just big enterprise software – it needs elaborate planning and creative thinking.

Wal-mart may not have been a leader if it had not invested in technology, but it would definitely not have been so successful if it had not invested in people and processes. Companies focus a lot on big enterprise software – shouldn’t they also focus on those who run them, and what they are based on?

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