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    Basic IT-1

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    Prathamesh
    The document discusses the Red Queen Hypothesis which suggests that in ecosystems, organisms must constantly adapt and evolve to survive against other evolving organisms. It applies this concept to corporate IT investments, noting that companies feel compelled to continuously innovate and invest in IT just to maintain their competitive position as rivals copy each other's innovations. The document also summarizes Nicholas Carr's argument that IT itself does not provide a sustainable competitive advantage since it is widely available and has become a commodity. However, it argues that how IT is used through people, processes and synergized with business strategy is what can generate unique strategic value for companies.

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    Basic IT-1

    Uploaded by

    Prathamesh
    5 views20 pages
    The document discusses the Red Queen Hypothesis which suggests that in ecosystems, organisms must constantly adapt and evolve to survive against other evolving organisms. It applies this concept to corporate IT investments, noting that companies feel compelled to continuously innovate and invest in IT just to maintain their competitive position as rivals copy each other's innovations. The document also summarizes Nicholas Carr's argument that IT itself does not provide a sustainable competitive advantage since it is widely available and has become a commodity. However, it argues that how IT is used through people, processes and synergized with business strategy is what can generate unique strategic value for companies.

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    The document discusses the Red Queen Hypothesis which suggests that in ecosystems, organisms must constantly adapt and evolve to survive against other evolving organisms. It applies this concept to corporate IT investments, noting that companies feel compelled to continuously innovate and invest in IT just to maintain their competitive position as rivals copy each other's innovations. The document also summarizes Nicholas Carr's argument that IT itself does not provide a sustainable competitive advantage since it is widely available and has become a commodity. However, it argues that how IT is used through people, processes and synergized with business strategy is what can generate unique strategic value for companies.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    5 views20 pages

    Basic IT-1

    Uploaded by

    Prathamesh
    The document discusses the Red Queen Hypothesis which suggests that in ecosystems, organisms must constantly adapt and evolve to survive against other evolving organisms. It applies this concept to corporate IT investments, noting that companies feel compelled to continuously innovate and invest in IT just to maintain their competitive position as rivals copy each other's innovations. The document also summarizes Nicholas Carr's argument that IT itself does not provide a sustainable competitive advantage since it is widely available and has become a commodity. However, it argues that how IT is used through people, processes and synergized with business strategy is what can generate unique strategic value for companies.

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    of 20

    • "Now, here, you see, it takes all the

    running you can do to keep in the


    same place… to get somewhere, you
    must run twice as fast!"
    — Lewis Carroll, 1871

    Red Queen’s Hypothesis


    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 1
    What about the Corporate IT Investments?
    • 50% of all capital investments of firms are in IT
    • It appears to be stuck in Red Queen race
    • You do some IT innovation; your archrivals replicate it the next morning
    • Slip once and it becomes a vicious liability
    • Slow down and you irrevocably fall behind
    • Rival firms having converted corporate IT spending into a blood sport
    • & hope others to first call it quits!

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 2


    Does IT Matter?

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 3


    Nicholas G. Carr
    HBR - 2003

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 4


    IT Doesn’t Matter
    • Something to strategically matter, it must be:
    • Valuable
    • Rare
    • Inimitable
    • Non-substitutable
    • Does IT pass this test?
    • IT has become pervasive commodity like electricity or steam engine
    • It fails in at least three dimensions!

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 5


    IT Doesn’t Matter – A Thought Exercise

    “‘IT’ Cannot be a competitive advantage because everyone has it.


    Spend less and manage risks”

    Replace ‘IT’ with a commodity…


    Say ‘Electricity’

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 6


    IT Doesn’t Matter – A Thought Exercise

    “‘Electricity’ Cannot be a competitive advantage because


    everyone has it. Spend less and manage risks”

    Or Replace ‘IT’ with a


    commodity… Say ‘Post-it notes’

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 7


    IT Doesn’t Matter – A Thought Exercise

    “‘Post-it notes’ Cannot be a competitive advantage because


    everyone has it. Spend less and manage risks”

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 8


    IT Doesn’t Matter – A thought Exercise

    If everyone has X, X will never provide a competitive advantage

    Would you agree?


    Logic is incontestable…!
    But premise is wrong… i.e false premise

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 9


    What Corporate IT actually is?

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 10


    Corporate IT

    They are Commodities!

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 11


    Corporate IT => IS

    They are commodities! Their values come from how they are used together with people and process.

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 12


    IT is just a tool!

    IT is just a tool. How it is used matter!

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 13


    IT is just a tool!

    Firm’s Business
    IT Strategy
    Strategy

    Synergy b/w IT Strategy and Business Strategy Matters!

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 14


    Still…
    • If IT is only this much, and tools being so economical/cheap, why firms
    struggle to get their IT strategy right? How can IT generate unique
    strategic advantage?

    IT Portfolio

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 15


    IT Portfolio

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 16


    IT Portfolio
    IT Portfolio

    Apps Infrastructure Data

    Digital
    Operation Strategic
    Plumbing

    Data
    Functional Functional
    Management

    Network Network IT Support

    Enterprise Enterprise

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 17


    IT Portfolio as Pizza
    Infrastructure Never differentiates;
    Economize - does not
    must be good enough
    strategically matter

    Apps

    Invest in more that


    strategically matters

    Data

    Raison d'être… New


    oil… Harness it!
    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 18
    Source: Amrit Tiwana, “IT Strategy for non-IT Managers”, MIT Press, 2017.
    IT Infrastructure
    • Firm-wide technology foundation
    • Digital Plumbing
    • Hardware
    • Anything You can Kick!
    • Network
    • Connects hardware to internet!
    • Requirements:
    • Deep understanding of firmwide IT
    • Must Satisfy:
    • Economies of scale
    • Bulletproof Reliability
    • Security
    • Strategic Role: Competitive Necessity! Carr’s argument focused mostly here!
    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 19
    IT Applications (Apps)
    • Software that individuals in the organizations use for their core
    activities
    • Purchased or custom made
    • 20% Corp IT Budget, but source of all the competitive advantage
    • Must be interwoven with your business strategy!
    • Two broad groups:
    • Operational apps
    • Strategic apps

    24-06-2023 IIM Calcutta | BITS | Vimal Kumar M 20

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