It Doesn't Matter

MEMORANDUM

TO: Hazel Hasslefree

FROM: Bud Bitmaster BB

DATE: February 7, 2008

SUBJECT: IT Doesn’t Matter

After reading the article IT Doesn’t Matter by Nicholas G. Carr, I have many interesting and valuable topics to discuss with you. First, I will cover the topic of technology. I will then discuss the importance of information technology and what gives it a competitive advantage. I will then discuss the risks and where technology is headed. After that, I will talk about what companies can do to lower costs. Finally, after researching our company, I have made many observations on where we stand and what needs to be done in the long-run.

Information Technology has become the “backbone of commerce” as defined by Carr, it is everywhere. It clearly drives all business functions in today’s society. It has become affordable and available to everyone throughout the world. Businesses spend in excess about $2 trillion a year globally on technology. This phenomenon has changed the way we do business and does not seem to be dissipating anytime soon.

One of the ideas behind the article is that the scarcity of IT is really what makes it a competitive advantage. For example, American Hospital Supplies developed an innovative software system called ASAP where hospitals could order supplies electronically. It was extremely valuable since there was no competition and could be shared. According to Carr, AHS capitalized on characteristics of infrastructural technologies due to the high cost and lack of standardization. One of the issues behind gaining a competitive advantage from an infrastructural technology is the short time span the firm using it has before its competitors catch on. Managers falsely believe that this advantage will last forever, but they are almost always mistaken. Massive amounts of money are spent on research and development and when a breakthrough occurs, the competition begins. This ultimately...