L. Blair Heath--HIM: L. Blair Heath--HIM: L. Blair Heath--HIM

L. Blair Heath--HIM: L. Blair Heath--HIM: L. Blair Heath--HIM
IT Doesn’t Matter
By Nicholas G. Carr

Certainly information technology (IT) has spread over the past few decades. Since Ted Hoff created the microprocessor by putting the circuits necessary for processing on a tiny piece of silicon, many other technologies have come about. These include desktops, local and wide area networks, and the Internet. In the 1980s, only 15% of capital expenditures went to information technology. Now this expenditure has reached almost 50%. Not only has the expenditures on IT changed, but so has the view toward technology. In the past, computers were viewed as something for only secretaries to use, and CEO’s would not dare touch them. This has definitely changed. Now CEO’s use IT in their strategic thinking and how to gain a competitive edge. There is a problem with this view however, because IT is now viewed as a necessary resource rather than something extra that no one else has. Since availability increased and cost decreased, IT has become a commodity.

There are two different types of technology: proprietary technology and infrastructural technologies. Proprietary technology can be owned by a single company. An example of this would be an industrial manufacturer discovering a way to employ a process that other competitors cannot replicate or a company with consumer goods discovers a new packaging material that gives its product a longer shelf life. Infrastructural technologies offer more value when shared than when isolated such as the railroad. Although efficient for one company to have, it would be much more beneficial to everyone for an open rail network connecting many companies and buyers. In order to gain a competitive edge in infrastructural technologies, industries must be able to look ahead to see the advantage because there is only a small window of opportunity. Soon after the technology becomes known and appreciated, the cost drops and it becomes available/affordable to everyone, thus taking away the competitive edge. On the other side, when a technology comes out and a company lags behind implementing the new technology; this can seriously affect and damage their business.

IT is a transport mechanism, it is far more valuable when shared than when used in isolation (just as infrastructural technology). It would be almost silly to write your own application for word processing or e-mail, when you can buy it for a fraction of the cost. In order to keep up with information technology, many businesses now purchase “web services” provided by third parties. The author states, “The rapidly increasing affordability of IT functionality has not only democratized the computer, it has destroyed one of the most important potential barriers to competitors. Even the most cutting-edge IT capabilities quickly become available to all.” The best opportunities for gaining information technology based advantages are already dwindling. New technologies are easily replicated and are quickly built into software.

The most important statement the author made was “When a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantages it provides.” Since the advantage of having IT is decreasing, there are 3 important rules to remember. 1) Spend less—the penalties for wasteful IT spending will grow stronger 2) Follow, don’t lead—if you wait longer to make an IT purchase, you’ll get more for your money 3) Focus on vulnerabilities, not opportunities—companies need to prepare themselves for technical glitches, outages, and security breaches. Information technology has become imperative in all aspects of business. IT can be very beneficial in health information systems. Our world is moving more and more into technology, and healthcare should not lag behind. Health Information Systems should, however, be on the defense rather than the offense. This means, health information systems should not do large amount of IT spending, but rather stay on the lookout for risks and breaches. IT can be very beneficial if implemented into health information systems, but they should proceed with caution. Carr made a good discussion about information technology. This article points out IT is now available and affordable for everyone; therefore, taking away a competitive edge.