HBR AT LARGE
Doesn't
Matter
by Nicholas C.Carr
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
IN 1968, ayoung Intel engineernamed
Ted Hoff found a way to put the circuits
necessary for computer processing
onto a tiny piece of silicon. His invention
of the microprocessor spurred a
series of technological breakthroughsdesktop
computers, local and wide area
networks, enterprise software, and the
Internet-that have transformed the
business world. Today, no one would dispute
that information technology has
become the backbone of commerce. It
underpins the operations of individual
companies, ties together far-flung supply
chains, and, increasingly, links businesses
to the customers they serve.
Hardly a dollar or a euro changes hands
anymore without the aid of computer
systems.
As IT'S power and presence have expanded,
companies have come to view it
as a resource ever more critical to their
success, a fact clearly reflected in their
spending habits. In 1965, according to a
study by the U.S. Department of Commerce's
Bureau of Economic Analysis,
less than 5% of the capital expenditures
of American companies went to information
technology. After the introduction
of the persona] computer in the
early 1980s, that percentage rose to 15%.
By the early 1990s, it had reached more
than 30%, and by the end of the decade
it had hit nearly 50%. Even with the recent
sluggishness in technology spending,
businesses around the world continue
to spend well over $2 trillion a
year on IT.
But the veneration of IT goes much
d ...