This is a continuation of the series on converging IP applications. To further set the stage, in this post I'm going to take a bit of a look at the role of IT in a corporation and the relationship of IT to business value. In 2003, Nicholas Carr wrote an article for Business Communications Review (BCR) entitled "IT Doesn't Matter." I mentioned this article and this author in my recent blog on Wikis. Nicholas Carr has developed something of a reputation for taking a stance that opposes the status quo. The "IT Doesn't Matter" article was essentially the start of that reputation in the broader market, and set off a firestorm of debate in the industry.

In the article, Carr essentially argues that IT has become a commodity, not all that different from electricity or phone service. As a commodity, he suggests it is essentially becoming an invisible part of the corporation (except when it doesn't work) and provides no strategic value to the organization. If Carr is right, it would seem to imply that those who are providing services to the IT organization have purely tactical value to their customer.

Fortunately, I think a solid case can be made that Carr was not right (which is also reflected in a lot of the rebuttals to Carr's position). First, he seems to make the assumption that the measure of strategic value is scarcity. But strategic value is not measured by scarcity - it is measured by differentiation and the return on investment (ROI) to the organization.

Let's use a simple example to see the possible strategic value of a commodity. Consider the simple telephone. Every company has a telephone network. Does it have any strategic value? If the phone network is simply a background communication vehicle that provides for inbound and outbound calls, then it provides no differentiation from one company to another. But what if a corporation determines that the key to keeping and growing their customer is personal customer responsiveness. Sales and service personnel are told that they must guarantee 100% personal contact capability for each customer. Each sales team is given a special cell phone that must be covered 24x7. Every customer is given an 800 number that, when dialed and a customer ID entered, is routed to the cell phone for that sales team (not to an anonymous person in a call center).

Suddenly, a simple phone system is being used in a strategic way: to create a differentiation from the competition. Although it is a commodity, and none of the technical features being used are particularly new, the phone becomes a strategic asset.

Carr also makes the mistake of painting all of IT with a single brush. In reality, however, IT is a composite of several organizations. Usually there are at least three: the network organization, the operation and administration organization, and the application organization. The network organization keeps the network fabric operational. The operation and administration organization creates user accounts, runs the servers, provides the help desk, and overall deals witht he end-user day-to-day experience. The application organization is building and maintaining the corporate business applications.

The first two organizations can be relegated to the commodity bucket. The third is not so easily dismissed. The applications a corporation runs have enormous strategic value to an organization. The type, combination, efficiency, and features can vary widely. They tend to be assembled from commodity parts, but many of these applications are directly linked to the strategic direction of the organization. And many of these applications are home-grown.

CIO's are definitely looking to IT to help solve business problems. The day when CIO's used bandwidth, CPU utilization, memory demands, system availability, and total cost of ownership (TCO) as their primary metrics are fading. Today's CIO is looking at such metrics as return on investment (ROI), productivity, profitability, and process efficiency.

The lifeblood of a company today is information. You would be hard pressed to find anything in a modern corporation, government, or any other organization that is not information-related today. From finances to manufacturing control systems to engineering to marketing and sales, it's all about the information. And the company that can gather, manage, analyze, and disseminate the information best - wins!

So does IT matter? Well, it might serve to remember that the "I" in "IT" is for "Information." What do you think?