Smith & Fingar on
Is Carr Wrong?
A review of our class
We have learned about
We know that sustainable advantage
comes from a proprietary technology
We know that infrastructural systems do
not usually provide competitive
We learned about the Toyota
So where does IT fit in all this?
Who are Smith and Fingar?
Authors of a book titled:
IT Doesn't Matter—Business
Howard Smith and Peter Fingar
Provides an interesting
rebuttal to Carr
Is Carr Wrong?
"Carr's historical analogies to
other infrastructure technologies
are not convincing. Information
technology has infinite and
Lewis, M., Letter to the Editor, in "Does IT Matter? An HBR Debate,"
Is it Spring or winter for IT?
Carr suggests winter
The glory years are over
IT has become an infrastructure.
It is critical to success but will not yield a
Smith & Fingar say spring
IT is just starting – the next 50 years are
where it is at!
The real key is Business Process
Smith & Fingar on Scarcity
Carr states scarcity may be the
basis for sustainable competitive
If not scarce, it is not proprietary
S & F state that is true -- in the
physical world such as during the
Carr’s examples of railroads, telegraph, etc.
Scarcity - today
Smith & Fingar say this is not so
the realm of human creativity
innovation in the information revolution.
In other words – HOW you use the
data is the critical issue
What do you think of that argument with
respect to ERP?
S & F competitive advantage
Carr is really about the IT industry,
not the use of IT for strategic
They argue that Carr is focusing on the
MACHINE – is that true?
Carr's article describes the last
fifty years of the IT industry, more
accurately called EDP.
Carr’s focus was on TPS – is that true?
provide their users opportunities
for competitive advantage when
they approach critical mass, not
early in their development.
Do Infrastructural systems really provide
a competitive advantage?
Business Processes are key
Carr's argument does not recognize the
significance of the business process,
instead focuses on "functional" IT
applications and individual services.
Today's IT Utility is only the platform for
tomorrow's BPM capability.
Scale, standards, and access are valuable to store,
process and transport unique business processes of
Web Services & Practices
Web services are an emerging
technology related to application
integration, not to selling
commoditized applications by
some third-party IT utility company.
Best practices aren't the only
practices, as Carr implies.
So what is BPM?
“The problem is the separate
stovepipe applications within most
organizations with process choke
points that cross the stovepipes.
The answer is to build and operate
services at the intersections of the
stovepipes to ease the process.”
What is BPM
In the simplest terms, it is
running the organization to
meet customer's needs
Why don’t we do this now?
Focus on my area – not the firm
I can’t understand everything in the
Hey – wait a minute!
How does BPM compare to
Sounds kind of familiar – doesn’t
Could automated BPS
systems approach many of
the TPS functions?
Well, who is right?
Let’s apply Smith & Fingar’s
ideas to a mature technology –
Does how you use electricity provide
you with a competitive advantage?
Are the best practices the only
Does electricity provide opportunities
for competitive advantage?
Carr might suggest
What are the keys to electric
Usersdo not care how it works – just that it
Product is a commodity
Best practices = availability
This will not yield competitive
Carr Reviewed: Four Points to
Follow, Don’t Lead
Innovate when risks are
Focus on vulnerabilities
Whoever is right:
We need to consider IT as
Justify on business terms
Focus on deliverables
Not selling IT as the next dream
Consider that it may be an infrastructure
Consider BPM opportunities