Introduction
In 2003, Nicolas Carr wrote an article in the Harvard Business Review titled “IT Doesn’t Matter” which has generated a great deal of debate in the field of IT industry. Nicolas Carr claimed that Information Technology is losing its role as a source of strategic competitive advantage at the company level and based on this argument; Mr. Carr believes that companies should change the way they manage their IT investments. He believes that IT is going the same way as railroads and electricity to become only a factor of production or “commodity inputs.”
Summary of the Article’s Main Points
Mr. Carr started with defining what he believes to make a “truly strategic resource”. He thinks scarcity not ubiquity that gives the company a long-lived
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Carr distinguishes between two forms of technologies “proprietary technologies” which are the property of a single company and “infrastructural technologies” which are often shared throughout an industry. He stated that “a company could use proprietary technologies to gain advantages over rivals as long as access to the technology is restricted-through physical limitations, intellectual property rights, high costs, or a lack of standards” and once the company loses these restrictions imposed, the competitive advantage will be lost. On the other hand, infrastructural technologies generates far greater value when shared than when used as a basis for strategic advantage except for “the earliest phases of its buildout.”
He presented many examples to illustrate the eventual and feasible transformation of an infrastructural technology, which might appear proprietary in its early stages of buildout, “to be broadly shared that they will become part of the general business infrastructure.” Mr. Carr used the example of a proprietary railroad. It is conceivable that a company might achieve a competitive advantage by providing lines only to their vendors, but at the very end, this advantage would be insignificant compared to the greater benefit gained by building a railway
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Carr introduced “the commoditization of IT” concept. He stated, “It is hard to imagine a more perfect commodity than a byte of data – endlessly and perfectly reproducible at virtually no cost.” Although information technology may appear different to be described as a commodity, Mr. Carr indicates three specific characteristics that “guarantee rapid commoditization”: IT is a transport mechanism; IT is highly replicable; and IT is subject to rapid price deflation. Mr. Carr further supports this concept by demonstrating how “the arrival of the Internet has accelerated the commoditization of IT by providing a perfect delivery channel for generic applications.”
Finally, Mr. Carr claimed that the IT buildout is much closer to its end than its beginning, which means in his opinion, that information technology is no longer viable to gain a strategic advantage over rivals and if any, it will rapidly disappear. So that, he proposed three rules for the future of IT management: “spend less, focus on vulnerabilities, not opportunities, and follow, don't
The ability to capture values along the Technology Adoption Lifecycle determines not just how successful a firm will be, but whether it will create competitive advantage through technology. Businesses with large fixed costs, capital-intensive business plans, and specialized asset bases will face the challenge to maintain its strategic continuity because it is generally prohibitively expensive to change direction to response to any conceivable structural change.
In his analysis, Charles Fine goes on to note that as the speed of an industry accelerates, the advantage one company may gain shortens – advantages are temporary. This conclusion is somewhat intuitive since the research and development to production cycle gets s...
The more we use and/or rely on computer technology, the more risky it gets. As Neil Postman has said, technology gives us something, it will take away something, I’d like to make a very small change to that and I declare that technology gives us a few things but take away many and the most fundamental things away. And I believe that the reason why no one really speaks about the disadvantages of computer technology is because the marketing of the products will certainly affect the product launching company. I hope one day we all realize where life’s taking us and try to find a resolution even though it may be a little late. But neither does trying not hurt nor a little outcome is better than
Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment which is subject to change quickly. Based off this information a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary source of profitability. Resources entail intangible, tangible, and human resources. Capabilities describe environment and strategic environment. Core competencies include knowledge and technical capability. In this section we will attempt to describe in detail the three segments which are resources, capabilities, and core competencies.
Information Technology (IT) is a foundation for conducting business today. It plays a critical role in increasing productivity of firms and entire nation. It is proven that firms who invested in IT have experienced continued growth in productivity and efficiency. Many companies' survival and even existence without use of IT is unimaginable. IT has become the largest component of capital investment for companies in the United States and many other countries.
Slater, S. (2005). Successful development and commercialization of technological innovation: Insights based on strategy type. The Journal of Product Innovation Management, 23(1), 26-33. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/j.1540-5885.2005.00178.x/citedby
Pitts and Koufopoulos (2012) argue that resources and capability are highly important internal factors that should be taken into account by the organization in order to obtain the successful performance in the long run.
Lastly, he claims that IT can no longer be used to gain a strategic competitive advantage. To provide evidence for his argument, Carr states that the only way to gain an edge over competitors is to offer something they cannot. To this point he mentions that if a competitor finds something hard to replicate, it is an advantage. The core point to his argument is that as long as the technology remains proprietary, it can provide strategic advantage and that it has strategic potential. Later in the article, Carr counters his arguments above by stating that, “some specialized applications that do not offer strong economic incentive for replication” will survive.
Henderson and Venkatraman proposed a model for business – IT alignment; it was intended to support the integration of information technology (IT) into business strategy by advocating alignment between and within four domains (see figure 1). The inter-domain alignment is pursued along two dimensions: strategic fit (between the external and internal domain) and functional integration (between the business domain and the IT domain). The objective of this model was to provide a way to align information technology with business objectives in order to realise value from IT investments. The authors argued that the potential strategic impact of information technology requires both an understanding of the critical components of IT strategy and its role in supporting and shaping business strategy decisions and a process of continuous adaptation and change. Hence, they presented a model that defines the range of strategic choices facing managers.
To further shore up his "IT as commodity" theory, Carr cites the fact that major technology vendors, such as Microsoft and IBM, are positioning themselves as "IT utilities," companies that control the provision of business applications over "the grid." Couple this IT-as-utility trend with the rapidly decreasing cost of processing power, data storage and transmission, and even the most "cutting-edge IT capabilities quickly become available to all."
It is also perhaps not feasible to evaluate the attractiveness of an industry independent of the resources a firm brings to that industry. It is thus argued that this theory be coupled with the Resource-Based View (RBV) in order for the firm to develop a much more sound strategy. It provides a simple perspective for accessing and analysing the competitive strength and position of a corporation, business or organisation.
"Technology is like fish. The longer it stays on the shelf, the less desirable it becomes." (1) Since the dawn of computers, there has always been a want for a faster, better technology. These needs can be provided for quickly, but become obsolete even quicker. In 1981, the first "true portable computer", the Osborne 1 was introduced by the Osborne Computer Corporation. (2) This computer revolutionized the way that computers were used and introduced a brand new working opportunity.
of a firm to attain new forms of competitive advantage (Müller, 2011). It is due to these
Hendersern and Stern 2000, ‘Untangling the origins of competitive advantage’,Strategic Management Journal, Vol. 21, pp. 1123-1145.
In the 1980’s, the birth of a new concept called ‘Human Resource Management’ was born. This trend comes after an intense period of Taylorisation, Fordism and now, McDonaldisation. HRM came to counter balance these trends and to consider the concept of the Man as a Man and not as a machine. For the last several decades, the interests of companies in "strategic management" have increased in a noteworthy way. This interest in strategic management has resulted in various organizational functions becoming more concerned with their role in the strategic management process. The Human Resource Management (HRM) field has sought to become integrated into the strategic management process through the development of a new discipline referred to as Strategic Resource Management (SHRM). In current literature, the difference between SHRM and HRM is often unclear because of the interconnections linking SHRM to HRM. However, the concepts are slightly different. Thus, we can ask, what is strategic human resource management? What are the main theories and how do they work? What do they take into account and how are they integrated? What are the links between SHRM and organization strategy? In order to answer to these questions, we will precisely define strategic human resource management, followed by a look at the different approaches built by theorists, and finally, we will see the limits between the models and their applications depending on the company’s environment. Discussion Strategic Human Resource Management: definition Strategic human resource management involves the military word ‘strategy’ which is defined by Child in 1972 as "a set of fundamental or critical choices about the ends and means of a business". To be simpler, a strategy is "a statement of what the organization wants to become, where it wants to go and, broadly, how it means to get there." Strategy involves three major key factors: competitive advantages (Porter, 1985; Barney, 1991), distinctive capabilities (Kay, 1999) and the strategic fit (Hofer & Schendel 1986). Strategies must be developed with a relevant purpose to sustain the organizational goals and aims. SHRM is one of the components of the organizational strategies used to sustain the business long-term. SHRM defined as: “all those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of the business. (Schuler, 1992)” or as “the pattern of planned human resource deployments and activities intended to enable the firm to achieve its goals.