We ain’t there quite yet

Sometimes, being right is more misleading than being wrong.

I’m thinking of Nicholas Carr, writing in the Harvard Business Review that IT doesn’t matter anymore — in his view it has become so plentiful and commoditized that it no longer provides anyone with a competitive advantage. He is, of course, right.

In a wrong kind of way.

Imagine that every company has all of the information technology up and running that we read about in the industry journals. Their supply chains have “full visibility.” Their customer data warehouses and operational data stores are populated with terabytes of accurate, up-to-the-second information. Their customer service centers support communication across all customer-accessible channels, popping up relevant tidbits from the aforementioned repositories as needed.

Meanwhile, far from having islands of automation, the magic of web services and EAI provides full integration of their application architecture, seamlessly exposing a unified interface that masks the complexity of the underlying software while resolving all ontological incompatibilities.

Oh … I nearly forgot: The batch systems have been retired — all updates happen in real time.

Yes, if we lived in press-release land, Carr might possibly be correct. We might have reached the point of diminishing returns, and information technology won’t provide any further competitive advantage. Failing to invest in IT will, in this world of trade-journal fiction, lead to huge competitive disadvantages, but that’s a different story.

Except … it isn’t about information technology. It’s always about how business gets done. IT is an enabler of business processes and practices, not a separate and distinct provider of value.

Businesses either change or they fail. They adopt new strategies and reconfigure themselves to implement those strategies on a regular basis. They improve their internal processes and practices continuously and change their IT to support the improvements. Even for companies with the most flexible application architectures, adapting them to these business changes is difficult and time-consuming. IT fails and the strategy fails. IT fails and business improvement fails.

IT doesn’t matter? For this to be true, how you conduct business can’t have an impact on your success in the marketplace.

So even in the land of press releases, Carr can only be right if strategy doesn’t matter, and business processes and practices have reached optimization nirvana … there are, that is to say, no competitive advantages to be had, except, maybe, for who has the better advertising.

I once read a description of the perfect factory. It’s staffed by one person and one dog. The person is there to feed the dog. The dog is there to make sure the person doesn’t touch anything. To the best of my knowledge, nobody has yet built this perfect factory. When somebody does, factory automation will have achieved perfection, and Carr will be right, insofar as manufacturing IT is concerned.

Right up until the product that factory produces becomes obsolete. Then we’ll need some additional technology to assist with the process of reconfiguring the factory to handle whatever new product replaces the old one, and reconfiguring the network of suppliers that sends raw materials to the factory.

Imagine all of that becomes instantaneous and commoditized. Hey, it could happen. That doesn’t mean change now stops. It simply means it’s time for a new strategy — perhaps it will focus on the distribution channel; the business might decide to bypass its distributors and sell directly to consumers. What … that’s going to happen without software?

Imagine a time when the conduct of business has been so thoroughly researched that no further improvements are possible, human behavior is so well-understood that even the sales and marketing function has become perfectly optimized, and the only advantage anyone has is price. We can imagine it. It’s unlikely, and depressing besides, but it could happen.

It hasn’t happened yet, though, and in the meantime, in the world inhabited by real IT leaders and practitioners, even the well-trod-ground of redesigning business processes, determining how applications have to behave to support them, and implementing working technology that behaves that way … well, we all know the success rate for IT-related projects, and it hasn’t yet reached 50%.

It is barely possible that we’ve reached the point in our evolving understanding of information technology that the end of the line is in sight … where our ability to design and implement business applications has reached the point of diminishing returns. That, in turn, can only be true if we’ve reached the limits of human ingenuity with respect to business strategies, tactics, processes and practices.

And while that’s possible, I guess, I think the better explanation is the simpler one: that some pundits have reached the limits of their ability to envision new and better ways of conducting business, and have mistaken that for a real boundary in the real world.