The Level Playing Field is About to Kill You

In the May 2003 issue of Harvard Business Review, Nicholas Carr stated brilliantly that “the opportunities for gaining IT-based advantages are already dwindling.” Carr argued that IT was basically an infrastructural technology, not proprietary at all, and not strategically advantageous. Using historical examples of industrial technology like railroads and electricity, Carr made the case that IT’s ubiquity was not necessarily a competitive advantage, that adoption and standardization were the culprits for falling prices and profit margins.

Fast forward to 2017, where the $2 trillion global spend on IT has almost doubled to $3.7 trillion. IT has added cloud to the on-premise, scaled-to-support, social media commerce apps, and Big Data projects. Yet IT is no closer to being the silver bullet today than it was in the early 2000s. Processes remain stiflingly manual, and the software code cycle is often stalled, or buggy, or both.

Today’s CIO is in the crosshairs, having made the investment in standard infrastructure and web services, but no further along in terms of innovation and responsiveness to the business.

These are generalizations, but they do have import at the operational level. If you are a CIO, look at your software testing cycle. Are you able to handle daily releases smoothly? Do you have enough testers to ramp up quickly to check for bugs, fix the issues, and then test again to make sure the customer-facing instance is clean? Is your test cycle at least halfway automated? We didn’t think so.

When you are managing the IT load in an idea economy, there is simply no time for innovation. If you are not automating at least 60% of your IT processes, across 100% of IT functions, we believe you are a sitting duck.

You may have found ways to hold the line on IT spending, or reduce it to a single-digit percentage, but this is no reason to brag. Your competitors and best-in-class peers all have the same IT arsenal that you do. Carr pointed out that best practices and standardization are the silent killers, because we believe them to be competitive when in fact they are not.

Look at the debris field this year filled with retail, big brand names falling by the wayside, with more to follow. We’d bet that they had huge IT investments that they could not make relevant or responsive to the demands of consumers or frictionless electronic commerce.

The new success metrics are cycle time—and the speed of your code cycle. Your pervasive deployment of technology is not a lethal weapon. But it can be a millstone.