Technology is a resource and what makes any resource truly strategic is not the availability or accessibility but its scarcity. Simply put, a competitive advantage is only gained when you can do or offer something that your competitors can’t. At this point data storage, data processing, and data transport are available and affordable to all and have essentially become commodities in the form of a cost of doing business. IT is no longer viewed as a strategic tool but as an essential component of the infrastructure to doing business and little more than a cost of doing business. Something paid by everyone that provides uniqueness to none. From a strategic standpoint, IT doesn’t matter much anymore. It’s widely understood and accepted that IT is a seamless and nearly invisibly part of our daily business operations.
Technological advantages still exist, thus ‘mattering’ with proprietary technologies when such technology is effectively owned by one company in the form of a patent or some other process that is difficult to replicate. IT used in this capacity can provide significant competitive advantages for as long as the technology remains protected. The cost of developing proprietary technology can be extremely high and is only as valuable as the long-term strategic advantage it provides. Therefore, the advantage provided by IT has become marginal and isolated to companies with resources available to dedicate to the research and development of new technology.
Another factor affecting the ‘does-it-matter-ness’ of IT is the process of standardization. The way technology is used has a tendency to become perfected and emulated to the point that eventually they become ‘built-in’ products. This further supports the notion of IT becoming a commodity which largely takes away from the ability to capitalize on strategic advantage. Cost advantage remains a consideration but with competition and availability even the cost advantages are beginning to reach a marginal point. The point being that IT is no longer the differentiating factor is once was and will continue to lose its strategic potential as it becomes even more accessible and affordable.
Because of the rapid advances in technology, delaying IT investments can often be as advantageous as being one of the first to incorporate the newest technology. Oftentimes these pioneers make significant investments to be the first to offer new technology and capture those first to transition. Ultimately many of these companies find themselves making a considerable investment with issues stemming from the new technology including integration / compatibility issues and ultimately dated equipment as newer and more refined technology is introduced. History has shown that the smartest technology users patiently wait until the best practices are developed before making their purchases and in doing so spend less and gain more. Studies have also consistently shown that greater IT spending rarely translates into superior financial results.
Information Technology is increasingly moving towards protecting against system failures, security breaches, and data loss which many argue is a function of defense rather than offense. IT has become such an instrument essential to competition that the potential risks associated losses related to those risks pose a far greater threat than the advantage it provides. Electricity for example, is critical to business success with power outages and energy crises creating devastating consequences to the affected businesses. Despite this critical component of business, no company builds their strategy around electricity usage. An IT disruption can have the same devastating effect on a business as a major power outage. As a result, in theory identifying and tempering vulnerabilities could provide more of a strategic advantage than the technology itself.
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