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Management Information Systems, 13TH ED.
MANAGING THE DIGITAL FIRM
Kenneth C. Laudon ● Jane P. Laudon
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Learning Track 1: How Much Does IT Matter?
In May 2003, Nicholas Carr, an editor at Harvard Business Review, wrote an article titled “IT
Doesn’t Matter,” which stirred significant debate in the business community. Carr’s argument in
a nutshell is that because every firm can purchase IT in the marketplace, because any advantage
obtained by one company can easily be copied by another company, and because IT is now a
commodity based on standards (such as the Internet) that all companies can freely use, it is no
longer a dierentiating factor in organizational performance. Carr argues that no firm can use IT
Copying innovations of other firms can be devilishly dicult, with much being lost in the transla-
tion. ere is only one Google, one Wal-Mart, one Amazon, and one eBay, and each of these firms
has achieved a competitive advantage in its industry based in large part on unique ways of organiz-
ing work enabled by IT that have been very dicult to copy. Many very powerful firms have tried
Chapter 1: Information Systems in Global Business Today
Chapter 1 Learning Track 1 2
Likewise, the development of standards and lowering costs of computer hardware made possible
new products and services such as the Apple iPhone, tablet computers, iTunes, online streaming
music and video, and the entire online content industry. Entirely new businesses and business
models have emerged for the digital distribution of music, books, newspapers, radio, journals, and
Hollywood films.
Carr is surely correct in stating that not all investments in IT work out or have strategic value.
Some are just needed to stay in business, to comply with government reporting requirements,
