CIO Unplugged – 12/1/08

The views and opinions expressed in this blog are mine personally, and are not necessarily representative of Texas Health Resources or its subsidiaries.

Does IT Matter…Five Years Later?
By Ed Marx

In Nicholas Carr’s 2003 opinion piece for the Harvard Business Review, he threw a grenade on the IT dinner table. Carr argued vehemently that IT no longer mattered. He leveraged this high profile editorial into a best-selling, thought-provoking book in 2004, Does IT Matter? Carr’s central argument states that the strategic importance of IT has diminished over time; that IT has become nothing more than a commodity providing little competitive advantage. Consequently, according to Carr, companies should rethink their investment in IT. He also laid out his agenda for IT management, examining implications for business strategy and organization. Carr’s thesis was both embraced and vilified.

Written in the IT boom years’ post-internet “bubble,” does the economic downturn change the game?

As I observe and research, I see fatalists and opportunists at odds. The fatalist has accepted Carr’s pronouncement as fact and has become complacent, allowing the administration to marginalize IT. Opportunists, on the other hand, see the circumstances as the tipping point to reinforce, or for the first time, position IT as strategic.

I interpret Carr’s compelling arguments as a call to action. During these dour economic times, IT has a heroic opportunity to be a catalyst for prosperity, a key differentiator. This means I cannot sit back and accept current fate, allowing IT to dissolve into a simplistic commodity. To advance my organization, I hunt for and seize strategic opportunities. The economy will not determine my destiny if I choose to leverage it as a clarion call and make every effort to expand our services while lowering costs.

I have my department reaching out to select vendors and changing our value proposition from transactional to transformational relationships. It’s not about broad generalizations. Success is about the individual organization, its circumstances, and ultimately, you—the IT leader.

As organizations look to cut spending, IT is not immune. As discussed in my post “Brigades, Battalions and Budgets,” continual across-the-board expense reductions will underscore IT as a commodity and a cost center to be managed—Exhibit #1 for Carr. Call me competitive, but I believe that companies who lay low and marginalize their IT will have a much lengthier recovery period. In contrast, those companies that seize the opportunity and invest in IT strategically will not only perform better but do so at the expense of their competitors. Some of our current work is going to change our competitive dynamic.

Think. Brainstorm. Mashup. Research and develop strategies that will propel your organization forward. Even if your company is panicking and relying solely on expense reduction tactics, present ideas that demonstrate bottom line reduction and top line growth. Insist on having your voice heard. Demonstrate ROI through IT’s transformative and innovative power.

For competitive reasons I cannot share details, but we are doing these things. A risk-free example from my past happened at a community hospital. Our historic 45% market share in this two-hospital town was starting to plunge. Our across-town rival was replete with cash given their enviable position as part of a regional health system. Our Board decided that the best antidote was not to reduce expenses but to make strategic investments in IT. One year after the implementation of affiliated practice-based EMR’s, clinical inquiry application, and software to link referring physicians, our market position flipped. We saw a 20% swing, especially in hearts, births, orthopedics, and neurosurgery. We were featured nationally.

I have additional career examples, but I believe the point is made. Yes the economy is tough, and the fatalists are seeking to marginalize IT. But the time is right to forcefully lay hold of this opportunity and (re)establish IT as strategic and foundational for your organization’s long-term success.

Demonstrate the strategic power of IT.

It matters.

Ed Marx is senior vice president and CIO at Texas Health Resources in Dallas-Fort Worth, TX. Ed encourages your interaction through this blog. (Use the “add a comment” function at the bottom of each post.) You can also connect with him directly through his profile pages on social networking sites LinkedIn and Facebook, and you can follow him via Twitter – User Name “marxists.”