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CIO Unplugged 9/8/10

September 8, 2010 Ed Marx 11 Comments

The views and opinions expressed in this blog are mine personally and are not necessarily representative of current or former employers.

Does IT Matter: Six Years Later

In a 2003 opinion piece for the Harvard Business Review, Nicholas Carr 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?

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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? What about healthcare reform implications? Are we any different?

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, to position IT as strategic.

I interpret Carr’s compelling arguments as a call to action.

During these dour economic times and the uncertainty of healthcare reform, 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 or back-office function.

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.

Our department reaches out to select vendors, changing our value proposition from transactional to transformational relationships. I shared this in-depth in Maximizing Vendor 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. 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 that lay low and marginalize their IT will have a much lengthier recovery period. Especially when it comes to seizing the initiative on healthcare reform dynamics that are fundamentally changing the value equation of cost, quality, and revenue.

In contrast, those companies that seize the opportunity and invest in IT strategically will not only perform better, but will do so at the expense of their competitors. Some of our current work is going to change the 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, improve clinical outcomes, and support top-line growth. Innovation that will set your organization apart in dealing with the nuances of future payment and care delivery models. 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 cross-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 rather to make strategic investments in IT.

One year after the implementation of affiliated practice-based EMRs, clinical inquiry application, and software to link referring physicians, our market position flipped. We saw a 20% swing, especially in our target areas of 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. Healthcare reform is a bit fuzzy still. Fatalists seek 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. IT is not back office!

Demonstrate the strategic power of IT.

It matters.

Update 9/14/10

Good debate on IT value. My leadership team just started on our next book, also by Carr, entitled The Big Switch…Rewiring the world from Edison to Google. Whether you agree or not with Carr, it is healthy to debate his ideas and come to grips with his messages. Is IT strategic? Will cheap utility-supplied computing change the game? Does the Internet take away our ability to think deeply? Are we losing our capability for concentration and reflection?

I still maintain that we can leverage even the most common of tools in a strategic fashion. It comes down to culture, risk, vision, innovation and leadership. Give me two organizations that each implement the identical EHR and I can show you two radically different approaches…and executed well, one can be a strategic differentiator over the other.

I do not agree that IT is purely a support function. Sounds good on the surface but, short sells the innovation and passion we have been endowed with. I have been fortunate to work with incredibly talented individuals who have taken common tools and developed these to improve patient safety and increase the quality of care. I have also witnessed similar gains on the business side. As a by-product, these have helped grow IT and proven to help us differentiate ourselves from competitors.

Not everyone will adopt or deploy it as strategic, nor should they. But it can be done.


Ed Marx is a CIO currently working for a large integrated health system. Ed encourages your interaction through this blog. Add a comment by clicking the link at the bottom of this 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.

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Currently there are "11 comments" on this Article:

  1. What’s interesting to me is that we question the tools of technology at all. The telephone has only been around around 100 years or so, but I don’t see anyone questioning the need to “invest” in good communication tools. It’s not considered a good or a bad thing, merely a tool that one uses as much as anything else, with the same amount of risk/investment planning involved. My question is when will we get to the point that we stop structuring the conversation as if IT is anything more or less than a tool, one that we use to accomplish a goal? When will we get to the point that its not its own separate little kingdom but merely another department in the company?

  2. Ed,

    “Demonstrate ROI through IT’s transformative and innovative power.” What power??

    You missed the point of Carr’s work, and you obviously have not read :What Google is doing to our Brains (the Atlantic), and his new best seller “The Shallows”, that details the neurophysiological basis of the IT adverse effects on human kind and thinking.

  3. The technology is the commodity, it’s how you leverage it to generate and manage information that counts. That is, it’s the information, stupid.

  4. “Healthcare reform is a bit fuzzy still.”

    A BIT fuzzy??? On a scale of 0 to 10, where 0 is unknown and 10 is certain…I’d say it’s maybe a 3 or 4.

    Ed, you nor I, have any idea where this is all going to end up in 5 years. It’s not fuzzy, its a San Franciso fog!

    I also understand that the term ‘back office’ can be alittle demeaning. Hey, it conjours up images of when the CIO routinely reported to the CFO, and we all know that no CFO ever had any idea of how to run IT.

    But lets not forget that IT is a SUPPORT function, hospitals should not be in the business to ‘grow or sell’ IT. That does not mean that IT cannot strategicaly contribute to the overall organizational goals, but so can housekeeping, dietary, and all other support departments.

  5. Michelle W: There is a huge difference between IT and a telephone. Even though many people these days refer to IT as a “tool”, they are wrong. Yes, a phone is a communications tool, but IT is a medium from which many kinds of tools can be fashioned, given the right vision and specs and skills (and funding, of course). In fact, it’s because of IT, via add-ons, that phones are finally moving beyond the narrow restriction of basic communication tools.

    Hardware and software are tools only in a very general sense, but they actually represent an entire warehouse full of tools, the best of which have yet to be devised. It’s an evolving and growing process that requires much analysis, experimentation, and tons of patience. When desktop computers first hit the open market (late-70s), we barely knew what to do with them. There was common conjecture about using them to store recipes and addresses, and of course to play games. In fact, in about 1979 I worked with a physician to devise a simple billing system for his office. The best we could produce was an application that took a name from the address database and printed it on an invoice with correct amounts. Believe me, that was a big achievement for the day, but it was never trouble free. That doctor’s frustration sounded exactly like what we hear today concerning the larger systems.

    So, it seems to me that we’re moving one step at a time down a path toward ever increasing benefits, which makes it more than just a tool on the shelf, but rather a medium for potential break-throughs to better business and patient care. It takes a lot to get there, and as we do, we keep raising the bar, as we should. That sounds, to me, more like a creative canvas than a mere tool like a phone.

  6. Not Tired of Suzy:
    That reminds me of Jerry Mander’s “Four Arguments For the Elimination of Television” (1978). I actually agree with Mander on all points, but no way is that TV going back in the box. That ship has sailed, as they say, and best we can do now is try to minimize damage.

  7. not tired, your argument might be a little less hypocritical if you mailed it to us instead of posting it on the world’s largest IT network.

  8. Re: Objection. Thanks for the well-written response, it gave me much to think on. I agree in the sense that yes, of course, IT is more a system than one specific tool. I probably oversimplified too much in my comment. But as you mentioned with phones, what we call a “phone” today is far beyond what Dr. Bell originally produced. It was considered a novelty device but grew to the point that now, with the aid of other technologies, it is becoming the major mobile computing platform of choice. Even before cell phones, we had call-waiting, answering machines, 1800 numbers, phone trees: many people still use dial-up Internet, which is run through phone lines. Yes, a phone can merely be a means to call someone. It call also be much, much more, as business and industry have found.

    My point? Information Technology offers an amazing amount of opportunities, but is still, at its heart, about utilizing these tool(s) (in whatever form it appears) to achieve certain goals. Whether my goal is to deliver quality health care or a photo blog, IT in and of itself is not going to get me there. I can use many different tools to get the job done, both high and low tech, but at the end of the day, these are investments in time and money I make to supplement and/or boost skills I possess. I’d just like to see less alarmist warnings/prophecies and more practical approaches to the idea that we are a race that has used technology in one form or another since are beginnings. Perhaps I’m drawing on a monitor instead of a cave wall, with a mouse as opposed to a bone. Which tool I use is a matter of what I am trying to produce.

    In regards to other comments and the repeated warnings about how technology is making us dumber, I defer to this blog post over at KevinMD.com, which is one of the better explorations of the issue I’ve read.

  9. I believe that companies that lay low and marginalize their IT will have a much lengthier recovery period

    I completely agree. IT can be a strategic asset, if implemented and managed well. (It’s not easy to do that, and it requires appropriate talent, but it can be done.)

    In some healthcare industries such as Pharma where I once managed IT, one large gap was the lack of IT R&D. Without R&D involving IT itself in best supporting drug discovery and other aspects of pharma R&D, the companies are held back by what vendors can provide,

    This does not apply to hospitals, as hospitals are not in the R&D business, but hospitals could leverage the R&D side of HIT far better than the do, that is, the Medical Informatics field – in the formal sense such as these organizations and others where formal research and rigorous education is done.

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