“You only gain an edge over rivals by having or doing something that they can’t have or do,” wrote Nicholas Carr ten years ago in his controversial HBR article, “IT Doesn’t Matter.”
Carr predicted that an organization’s ability to compete through investing in information technology was about to change dramatically. When “the core functions of IT — data storage, data processing, and data transport — have become available and affordable to all,” he wrote, IT would cease to be a source of competitive advantage.
Not being a reality then
This was not yet reality at the time of Carr’s article. The IT boom of the 1980s and early ’90s had brought information technology to the corporate masses, unleashing the first full-scale technology revolution in the enterprise. To stay competitive, businesses rapidly embraced PCs, and the subsequent transition to the client/server era.
The original IT department was formed to centralize a unique expertise that could purchase, implement, and manage technology in the enterprise. And given the complexities involved in building up competitive IT weaponry, businesses won by out-spending and out-resourcing their opponents. Only the largest of enterprises could afford the best technologies, and even for those with the largest bank accounts, IT strategies were limited to basics like CRM, ERP, or email.
Reality of today
Today, though, Carr’s prediction is coming true. We’re in the early days of yet another seismic shift in IT, this time driven by mobile devices, the cloud, and a demand for technology experiences that match the simplicity of the consumer world. We are moving abruptly from an era of IT scarcity to one of abundance. This end of IT scarcity begs an interesting and important question. How do companies differentiate in a world where access to technology is no longer a competitive advantage?
Information eats the enterprise
With the swipe of a credit card, the customer support team can move to Zendesk or Desk.com; the HR team lives on Workday; the business intelligence group moves to GoodData or Domo; the finance team logs into Netsuite; the marketing department orbits around Marketo and Salesforce’s marketing cloud.
Whereas in the client/server world managing these disparate systems would have taken up the vast majority of a company’s IT budget and time, today an organization can be on dozens of job-specific, tailored solutions in days. The cloud enables enterprises to efficiently implement best-of-breed services while serving the varied needs of a business.
But here’s the surprise twist: Whereas many feared — and Carr more or less predicted — that the cloud would drive the extinction of the IT organization, the sudden avalanche of technology is actually making the IT function more important than ever before. Rather than serving as an adjunct to the core business, or merely a cost center, IT is becoming intrinsic to the very products and services that every company offers.
Why is this? Mainly because, as Marc Andreessen puts it, “software is eating the world.” A recent Accenture report concurs, claiming that every business is now a digital business:
Every industry is now software driven; as such, every company must adopt IT as one of its core competencies … Here is Nike using wireless sensors and Web technology to create a performance-tracking system that allows it to create new services to monitor, and to improve and create new training routines for athletes. There is Ford, using sensor data to monitor both how a car operates and the driver’s behavior, and seeking to apply analytics to improve the experience for the next generation.
As software eats the world, information is eating the enterprise. Access to the right information at the right time from anywhere will transform every business and every industry. Competitiveness in IT will come from connecting employees and partners in meaningful ways to bring products to market faster (how does a supply chain process shrink from days to minutes?), supporting customers with new experiences (can my thermostat talk to my energy provider?), and surfacing the right people and knowledge to generate better ideas (how do I find experts across my organization that I’m not connected to?).
IT abundance will affect every job, product, and customer interaction. We’re seeing retail outlets supp
store employees with iPads chock full of product catalogs to improve in-store consultation, enabling them to be instant experts on the latest goods and services. Flextronics uses Workday to provide visibility into its global workforce of 200,000 employees, allowing it to move around talent and projects at a moment’s notice. Kimberly Clark utilizes Salesforce’s Chatter to connect to its customers for development of products. Education publishing businesses are digitizing their entire supply chain, creating an end-to-end experience that connects everything from the creative and production process to the delivery and interaction with students.
In this transition from a world of IT scarcity to abundance, competitive advantage has little to do with unique access to technology, and everything to do with unique access to — and use of — information. When technology is near-ubiquitous, it’s the connection between people and information that drives business forward. Organizations that capitalize on this trend will ensure that as information eats the enterprise, they’ll be the ones satiated.
Aaron Levie is co-founder and CEO of Box. Follow him on Twitter at @levie.