Dog Eat Dog, Andrew McAfee and Erik Brynjolfsson, Technology, Business Insight — a Joint Venture with The Wall Street Journal

Dog Eat Dog, Andrew McAfee and Erik Brynjolfsson, Technology, Business Insight — a Joint Venture with The Wall Street Journal

Recommended reading for anyone thinking about the impact of IT in business. As I have posted before, I'm a firm believer of the "IT does matter" argument.

One of the interesting things to observe in the conclusions of this research is that as companies buy more IT, their industries become more competitive. But, was it not the other way around? I thought I would obtain a competitive advantage if I invested in IT?

Well the key issue I believe is: if everyone else does the same, the fact that you invest in IT, only keeps you in the game and makes you more capable of accelerating change. In other words, you are acquiring via the IT that you are buying, the automation and innovation capabilities that affect the industries that produce the IT. Fascinating.

Now, look at it from this angle. What if you analyze the performance of companies related to their investment in different types of IT? It is very possible that the investments in IT follow waves: in the 90s companies invested in automating processes using ERP, SCM and CRM. That investment has leveled the competitive field and freed up resources that can now do more innovative things. More knowledge intensive work that require judgement and decision making. Now these new works require a different type of IT support or enablement. And as companies enter in more information intensive realms, the ability to replicate and automate processes is reduced.

We will need to wait another 5 years, but modern analysis of the results of new waves of investments after 2000 would bring new evidence. My bet is that only the companies that invest in Information Management technologies, including BI, ECM, Web 2.0,..., will be capable of innovating and staying competitive.