by Elizabeth M. Ferrarini

Related Podcast: THE MAN WHO ASKED "THAT QUESTION": Podcast interview with Nick Carr, author, blogger, and consultant

Can an IT infrastructure help to differentiate an organization strategically from its competitors? This question, first posed in the Harvard Business Review article (May 2003), "IT Doesn't Matter," by Nicholas G. Carr, sent IT executives everywhere whirling around on their swivel chairs. It also caused academics to do some hard thinking, and computer vendors to rally in front of their customers. But Carr, the former editor of The Harvard Business Review, didn't stop there.

His 2004 book, Does IT Matter? -- Information Technology and Corrosion of Competitive Advantage, expands the initial premise in Carr's article by asking corporations to think about IT and its role in business strategy. The book also looks at some significant implications of the emergence of the new, shared technological infrastructure for all companies.("Sharing" means that all business units use the same IT infrastructure resources, such as storage.)

In an interview with Nicholas G. Carr, Enterpriseleadership.org's Elizabeth Ferrarini asked Carr to explain himself.

EL: Commodity public broadband services are great for consumers, but private companies will come under the gun for more IT compliance. To this end, will IT become more strategic to the organization?

NC: IT will start to talk more to the business units. It's a trend we're already seeing, with IT staff being required to think in more business terms than in purely technological ones. As more of the basic components of IT become commodity items and/or supplied by utility services, then it's less important for individual companies to maintain all of the specialized technical skills that they used to. Thus, IT becomes more of a translation function in bringing the right technologies to the right business processes.

EL: Is the IT role going to disappear?

NC: Most large companies will continue to have an IT role, but it's going to change and be integrated more into the mainstream of the business. It will make sense to treat the IT function the same way companies treat other departments, such as marketing and human resources, and move toward a rotational model. This model will change how IT staff is identified -- from technicians, separate from the business, to employees who serve a specific business role.

EL: Are you seeing kind of a two-tier approach to IT, in which the infrastructure is under a general manager, and a business IT unit is under a CIO reporting to the CEO?

NC: I haven't seen this type of model, but it could well be a future trend. Today, a lot of CIOs spend their time worrying about how to manage the infrastructure. They would be better off looking at how IT can help overall business operations.

EL: You have been doing a lot of speaking at conferences. What's the number one topic of debate you get into with IT professionals?

NC: The biggest issue concerns the question of innovation and whether it still pays for companies to be IT innovators. Most companies would be better off looking at IT as a cost of doing business by getting the IT capabilities they need as efficiently, inexpensively, and reliably as possible. CIOs in many companies continue to think there is a role for IT innovation, which will give the company a competitive advantage. Maybe 70, to 80 percent of their money and attention goes to basic infrastructure.

EL: Is what you just said true for IT professionals who are in an industry in which IT drives revenues, making innovation important to the company's success?

NC: Some of it is that. It's also a sense that there are many companies that may have very specialized opportunities to use IT in a very customized way that fits their processes. Most IT leaders, at this point, see a lot of the basic systems, even complex systems such as ERP, as being more and more standard, and less strategic to the business. From an innovation perspective, CIOs are looking at more highly specialized applications that fit their particular business or industry to gain an advantage from IT.

EL: Are there any companies you're really impressed with as far as IT innovation besides the Amazon.coms and GOOGLEs of the world?

NC: I'm impressed with how some big companies now are moving aggressively to adopting a utility model. Take Qantas Airlines, for example. It's closing down its data centers and moving towards hosted applications rather than maintaining its own. This strategy is driving down the cost of computing as a result, and reducing the headaches involved with maintaining all of their assets. What excites me are the companies that are really trying to capitalize on the commodity trend. Take the 70 or 80 percent of their IT activities and really streamline, consolidate, standardize them, and in many cases, offload them to utility suppliers.

EL: So, you think a lot more of IT is going to be outsourced?

NC: I wouldn't say outsourced in a way we now define it, which is a piecemeal process using different vendors to do specific things, and then relying on the internal IT staff to integrate everything. We're going to move from today's view of outsourcing to a utility model, which enables you to buy the capabilities you need for a monthly fee from outside utilities. More of the integration of systems will be done by these utilities.

EL: Technologies such as grid computing are supposed to enable companies to turn their infrastructures into utilities. Are you saying companies would prefer to buy utility services rather than build them themselves?

NC: Grid computing is still in its infancy. Wachovia Bank is a good example of an organization that's doing grid computing internally. As this technology and others, such as virtualization, continue to improve, most companies will look to outsiders to supply these services rather than setting up their own grids.

EL: During the dot.com era, we saw many startups offering a variety of utility services, from storage to maintaining the entire IT infrastructure. Given that many of these companies failed, such as StorageNetworks, can you put credence in the utility model?

NC: If you look at the dot.com era, many new ideas were too early. And, the entire application service provider model of hosted software and serviced didn't take off. However, technologies continue to advance. We are at a point where some of the things that didn't work five years ago can work today.

EL: Are you working on another book?

NC: I'm just starting to work on one. I plan to write about the future of the computer, looking at how computing will be done in businesses and also the way it will be done in the home. We're starting to move beyond the personal computer age to a time when computing will be distributed in and tapped into in many different ways. For example, broadband via your personal computer is becoming less expensive than wireline telephone. Even digital TV is starting to blur the line between basic consumer electronics and computing.

EL: The great IT jobs that were available 10 years ago may not be there in a few years. What advice would you give to IT professionals today or those coming up through the ranks?

NC: Here's one way to think about it. Traditionally there have been two types of IT professionals -- those who specialize in a particular technology, such as an operating system or a hardware platform, and those who are generalists. The first group will continue to shift from the user side to the supplier side. The vendor side increasingly needs these specialized skills. This generalist model of IT professionals plays a role between the technology and the business itself. There's also going to be demand for skilled, talented people who can provide this kind of bridge between IT and its application.

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Elizabeth M. Ferrarini is a freelance writer from Boston, Massachusetts.