Sustainable Competitive Advantage through IT Innovation

Today in class, we debated the commoditization of information technology, an idea largely attributed to author Nicholas Carr. Our debate piqued my interest, so I aimed to investigate what businesspeople and technologists thought about Carr’s bold statement. My search brought me to page 99 of Carr’s personal blog, which gave me insight into just how large of a “splash” the article made in the business and technical communities. Unsurprisingly, the most fiery rebuttals came from heads of organizations centered around IT innovation (“IT ‘Is’ the Business”-type companies). Carr provides a link to an article detailing the manner in which Intel’s CEO “fires back” with an opposing viewpoint. Carr subsequently quotes Bill Gates as proclaiming that IT would not matter only if technology were perfect or simply could not be improved further; both conditions, obviously, do not describe contemporary IT.

In my exploration of the topic, I became more sure of my own stance. Particularly, I dislike Carr’s claim that IT is “no longer a source of advantage at the firm level.” Through innovation, a company can certainly gain a short-lived advantage over other firms. Perhaps what Carr more precisely means (at the risk of putting words in his mouth) is that IT alone does not result in a sustainable competitive advantage, a condition that many of us are discussing in BA4101. In other words, a single IT innovation only results in a limited and brief advantage over rivals.

To prompt further discussion, I offer this question: how can a business encourage and attain sustainable IT innovation? What types of cultural, financial, and motivating factors might promote such an endeavor?