Some Thoughts on IT Doesn’t Matter: What IT Really Is

Let’s be straight forward, omitting the tedious and boring introductions.

Carr generally put forward two points in <IT Doesn’t Matter>.

  • Most companies are over-investing money on IT facilities.
  • IT doesn’t matter, because the advantages of it are shrinking for the Commoditization of IT.

I partially agree with the first assertion.

It is true that some companies nowadays spend too much on IT and get very little in return.

Thus, companies shouldn’t keep dramatically, crazily throw money on IT.

However, they’d better invest on it rationally due to their actual needs, and meticulously manage costs and risks.

I would never agree on Carr’s second point.

He could come up with the point “IT Doesn’t Matter” probably because he does not really understand WHAT IT IS.

This is the main thing I write this entry to talk about.

IT means Informatization, it’s about using information system.

There are actually three levels about IT:

  1. Hardware, including Data Storage, Machines dealing with managing and transferring of Data, and Network Communication Equipments.
  2. Softwares, including all kinds of applications used to collect, store, index, analyze, apply, and evaluate the Data Information, such as ERP, CRM, SCM for management utilities, WF(work flow), DW(Data Warehouse), DM(Data Mining) for analyzing utilities.
  1. Application, namely, applying all information derived from the above two levels to help people make decisions. (NOTE: it is used to help people make decisions instead of making decisions for people)

Usually the third level doesn’t get enough attention, however, the goal of Informatization (or the value of IT) can only be achieved when information get effective use. Informatization itself is not the final goal, it is just a preferable mean to realize the real goal in nowadays context.

IT is only a tool, just like a sharp blade or a amazing pen. Having it doesn’t ensure your kongfu to be improved or your handwriting to be more beautiful, however, you have to try hard practicing how to play with blade or how to write. Similarly, informatization development requires you to continuously improve your ability to information application. This is the real core and the most difficult part of IT.

Informatization or Digitalization is not about “Informa-” or “Digit-”, just grabbing some digits from the system, which is just a groundwork. However, the core of it shows on the part “-tization” or “-libation”, which means to make things informational and digital.

This means to rationalize and optimize the information we get. For instance, we utilize the historical data to help with sales prediction, purchasing plan, producing plan, dispatching plan, and inventory plan, to run the business follow these plans and to continuously revise these plans due to practice. If we bring information system into our company, but we don’t use it for decision making, and we still run our business as before, then the function of our new system is just to set free some job, like doing statistic reports, and to bring more work to some other jobs. Mass experience shows that, it is definitely impossible to get accurate, timely and complete information, which are used for decision making, without the help of using and applying the data and information collected by the information system.

It is still a pretty scarce and badly-needed skill of how to effectively use IT.

The subject that provides competitive advantages is not IT itself, but is those people who knows how to well utilize IT.

Today, companies are spending tons of dollars on data storage and getting customers’ transaction data. It is a huge waste If we just let the massive data lie in the disk without any analyzation and usage. However those data will produce great return if we hand it over to a well trained analyzer. This is the age of massive data, this is also the age of great need of knowledge and skills (Hal Varian, sorry that I didn’t find the original words he said, just give a link to the wiki site of him).

On the same highway and with the same top level car, different drivers must give different performances, at which level driving skills is the key factor. But while it was at the initial beginning stage, competition might be relatively rude, which depends on building a better highway and purchasing a better car. But after everyone’s hardware foundational facilities are all well built and relatively have no differences, this is the time that the role of people comes into play. Having good road and great car is not enough, you need top professional players like Michael Schumacher to win the game.

Article by LU JI (JJ)

about Hal Varian: