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IT doesn’t matter

// November 16th, 2006 // Technology

We had a guest from MIT Lincoln Laboratory in our class today. Dr. Pensa, the assistant director of Lincoln Laboratory, gave us an introduction to the laboratory, which is the research center of national security in US. It is really frightening that they have more than 100 million dollars spend on IT infrastructure each year. During Lunch, Dr. Pensa complained the waste of investment on IT and just wondered where the moeny went away. It made me remember one of the articles we read in IST 501 class last week - ” IT doesn’t matter” from Harvard Business Review, which argued that, since IT has become a common investment for most companies, the cost/profit of IT investment becomes low. On the one hand is that more than 100 million PCs are purchased every year, most of which replace older models. On the other hand, most computers are used just for word processing, email, and web browsing, which require only a fraction of the computing power.

Much of the spendings, in fact, is driven by vendors’ strategies. Hardware suppliers have become very good at parceling out new performance and capabilities in ways that force companies to buy new computers; software companies upgrade their products frequently, and plug more features and components into products, which are never used by most people. What’s more, software engineers are relying more on the improvement of hardware performance, and no longer care much about the quality of the design and codes. The time has come for IT buyers to throw their weight around and impose hard limits on upgrade costs.

As information technology’s power and ubiquity have grown, its strategic importance has diminished. The way you approach IT investment and management will need to change dramatically.

Three rules for IT management provided in the article:

1. Spend less. As the commoditization of IT continues, the penalties for wasteful spending will only grow larger. It is getting much harder to achieve a competitive advantage through an IT investment, but it is getting much easier to put your business at a cost disadvantage.
2. Follow, don’t lead. Moore’s Law guarantees that the longer you wait to make an IT purchase, the more you’ll get for your money. And waiting will decrease your risk of buying something technologically flawed or doomed to rapid obsolescence.
3. Focus on vulnerabilities, not opportunities. It’s much harder for a company to gain a competitive advantage through the distinctive use of IT nowadays, but even a brief disruption in the availability of the technology can be devastating.