The "IT Deniers" Versus a Portfolio of IT Roles

There has been a long, continuing debate over the value of IS and IT in producing business value and competitive advantage. For years, the “productivity paradox” — the fact that IT investments did not seem to produce commensurate productivity improvements — was used by “IT deniers” to indicate that the huge IT investments made by firms were excessive and relatively unproductive. Witness to this are the titles of well-known Harvard Business Review (HBR) articles by Dearden (1966, 1972): “The Myth of RealTime Management Information,” and “MIS is a Mirage.” When this “paradox” was finally discovered to be an artifact of the data and data-collection methods and laid to rest, another “denier” argument came to the fore. It suggested that IT was so ubiquitous that it could not produce competitive advantage, since it is only scarce assets — those possessed by only a few firms — that do so. Again HBR focused on this position with an article in 2003 (Carr, 2003): “IT Doesn’t Matter.” This is a view that, if accepted, is likely to lead to dangerous behavior since it suggests that spending on IT is necessary, but not important, to producing superior performance. It reinforces the predilections of some who do not understand that IT is a “necessary evil” because of its hard-tounderstand nature, its myriad unintelligible acronyms, and its ever-changing nature. To them, IT is changing so rapidly and is often so confusing that it’s hard to wrap one’s mind around its possibilities for driving business growth and profitability. It is true that some industries are indeed making large expenditures on IT and not achieving productivity benefits. For instance, a McKinsey study concluded that after spending $7.6 billion on IT between 1995 and 2000, the lodging industry experienced no increase in revenue (after controlling for the effects of the economy) and no increases in productivity. However, some firms and industries are making giant productivity strides through IT and some are achieving new revenue streams and competitive advantages. IT Strategy and Innovation: The “IT Deniers” Versus a Portfolio of IT Roles