The key point of the article What IT can learn from the railroad business, is that the masses are quickly learning new technology and the IT department is marketed in such a way that it may eventually be considered “general office knowledge” along with copying and faxing. This may result in the eventual breakdown of the IT department, similar to how computers have nearly eliminated the need for secretaries. In order to better market the IT function within a firm, IT professionals should promote the department as a strategic partner that supports the company in eliminating costs and driving revenues as opposed to a cost center that completes varying levels of complex technological tasks.
This article is reminiscent of the HBR article on Marketing Malpractice: The Cause and the Cure. Harvard marketing professor Ted Levitt is quoted saying “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” This urges marketers to focus on the job they are doing as opposed to the specific process currently being used to complete the job. As innovation runs its course, the current process will become outdated and the job will be completed in a different way. If the firm wishes to remain in the business of completing that job, they must also innovate.
The IT department does manage the technology of the firm and generates expenses, but it also supports nearly every function of the business and streamlines tasks in order to increase revenue and make the firm more efficient. This latter job of the IT department is the “quarter-inch hole” and the learning that the IT department can take from the mistakes of railroad business. Railroad tycoons defined themselves as being in the “train” business, instead of the transportation business, thus when trucks entered the scene, the railroad tycoons failed to view them as competitors. This allowed the trucks to slip under the radar of the railroad tycoons (see Judo strategy) and eventually steal a significant portion of their profits.
In the case of the IT department, the general public’s growing knowledge of technology is the truck that the IT department needs to watch. Unless the IT department is able to rebrand itself as a revenue generator and cross-functional, strategic partner, it runs the risk of suffering the fate of the railroad tycoons.