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Information Technology

Does IT Matter Now?

Thirteen years after Nicholas Carr declared that IT had become a commodity rather than a strategic asset, information technology leaders are still debating the importance of IT in higher education.

Writing for the Harvard Business Review in 2003, Nicholas Carr sparked a firestorm when he proclaimed: "IT is best seen as the latest in a series of broadly adopted technologies that have reshaped industry over the past two centuries — from the steam engine and the railroad … to the electric generator and the internal combustion engine. For a brief period, as they were being built into the infrastructure of commerce, all these technologies opened opportunities for forward-looking companies to gain real advantages. But as their availability increased and their cost decreased — as they became ubiquitous — they became commodity inputs. From a strategic standpoint, they became invisible; they no longer mattered."

A year later he published a book called Does IT Matter?, in which he deepened and expanded his point of view. In it he argued that IT's strategic importance was not growing but diminishing. IT, he wrote, had become more standardized and affordable and was transforming from a proprietary technology into an infrastructural technology — necessary for competitiveness but insufficient for advantage.

Thirteen years later, it's time to revisit Carr's argument.

Tim Chester, vice president for information technology at the University of Georgia, said Carr correctly predicted that the basic infrastructure of IT would become a commodity much like the electrical system. However, he believes Carr failed to see the big picture. Carr's basic premise was that IT's ability to help organizations distinguish themselves strategically was going to diminish over time. "He was wrong," said Chester.

Today more CIOs than ever are at the vice presidential level, have a seat at the executive table and report to the president. "I think there is a recognition that IT is a strategic enabler," said Chester. "Like most prognosticators, [Carr] didn't have a strong sense of how the discipline is changing itself in order to provide greater value in continuous improvement and growth."

IT's Natural Progression

As the line between commodities and strategic assets has blurred, technologies once considered strategic are now ubiquitous. At one time, faculty were developing innovative technology, said Cathy Curley, executive director for strategy and planning in the office of the CIO at the University of Michigan. Eventually this technology morphed into the tools everyone uses daily and takes for granted. "E-mail systems, for example, were once the domain of IT. But it makes little sense for IT to spend money developing e-mail systems," said Curley. Now, schools procure these utilities and IT measures their strategic value by how well individuals use information across systems. Cloud storage was a differentiator a decade ago; today third parties offer it at a fraction of the cost.
This march to commoditization is not limited to tools like e-mail and storage. Keith Boswell, director of technology at North Carolina State University's College of Engineering, has noticed this progression from a network perspective. Years ago, his institution's robust network was considered a strategic asset because it distinguished NC State from the schools with which it competes for faculty and students. Today, most campuses enjoy a robust infrastructure, so Boswell views his network differently. "What was at one time a differentiator is now a commodity that we, as most other institutions, just assume we have and exists," said Boswell. He now considers his network an auxiliary that has to pay its own way.

It's All a Matter of Perspective

As strategic assets and differentiators morph into commodities, those individuals who are concerned with the financial health of the school begin to view IT as a cost center and sometimes lose sight of its strategic assets. This view can trickle down to faculty, said Boswell, which can cause them to view IT as a commodity that steals assets away from professors pursuing their duties.

Just as professors expect the lights to come on when they flip the switch in the research lab, so too do they expect adequate capacity to run their computations and adequate space to store and share files. Researchers really don't care who's providing the capacity or the storage space. To them it's a commodity. On the other hand, the university administration, which has to pay for it, must decide if it's more cost-effective to offer the service locally or purchase it on demand. "That's a strategic decision, whether to build it or to buy it or use a hybrid," said Boswell.

When IT can't offer professors the capacity or space they need, they may look to purchase technology services directly from vendors, a practice that is becoming exceedingly easy to do. However, such services may not offer the data protection necessary for a sensitive research project. More and more funding agencies are requiring a relatively high level of security and insisting that the data derived from a research grant be made public. Professors can only comply with the rules of the research grant if IT remains a strategic asset designed to meet the objectives of the institution.

Cost Concerns

State and federal appropriations continue to dwindle in higher education. As a result, IT departments are forced to cut costs and further commoditize the services they offer. And often, the services they can offer diminish. In the past, faculty had a variety of solutions at their disposal to resolve an IT problem. Now, Curley said, financial constraints mean IT is more limited in the number of overlapping solutions. "We have to get smarter about how [IT spends its money]," said Curley.

Very little new money is flowing to IT these days, and any increases it does see are for security. When universities slash their budgets, IT is treated as an office rather than an academically focused strategic asset. "I'd like to see some effort to change that mindset," said Boswell. "The fact of the matter is no one — faculty, students, researchers — can do what they are here for without a robust IT infrastructure. There is a lot more promise out there that we're not able to take advantage of because we are simply engaged in maintaining what we have rather than looking to see what's coming down the pike and how we can make that a differentiator in how we teach and research."

While most view cost cuts as a negative, Chester feels otherwise. He jettisons legacy technologies that are error-prone and difficult to maintain. The cost savings frees him up to spend money on strategic assets. He's scrapping Georgia's custom-developed information systems and turning off its mainframe over the next four years, which will allow him to redirect $4 million in resources.

Over the years, the debate that Carr sparked has simmered down. Still the word commodity doesn't sit well with some. Curley, who sees both the positives and negatives of both sides of the debate, said she has stopped using the word altogether. "If someone can come up with new words and labels to use, we'd all be in a better place and wouldn't have to worry about debating on it," she said.

Today IT directors and CIOs are more likely to debate the virtues of the cloud, when to use it and when to offer services locally. Regardless, said Boswell, IT needs to do a better job of justifying its existence as a strategic asset. "I'd like to see us proposing more projects designed to enable and multiply the efforts of our faculty and our students, rather than having to sit back and defend the resources that we already have — which is what happens."

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