Commentary: Does IT Matter -- to CEOs?

By Tom Steinert-Threlkeld  |  Posted 2005-01-25 Print this article Print

CEOs of companies who actually use technology infrastructure, applications and services are silent on whether IT matters or not. Do they care?

"It may well turn out that the F.B.I.'s biggest problem was its desire to be innovative - to build a new wheel rather than use an old one within easy reach. When it comes to developing software today, innovation should be a last resort, not a first instinct."
--"Does Not Compute," Nicholas G. Carr, New York Times, Saturday, January 22, 2005

This is the latest cannonball fired across the bow of corporate America and its use of digits by the fellow who first spoke the unspeakable thought that "I.T. Doesn't Matter," almost two years ago. In this op-ed piece, he is using as his touch point the $170 million that the FBI said it wasted trying to create a system for identifying terrorists, a system it admits doesn't work. In support of his point that trying to innovate in the use of information technology rarely pays off, he cites quite directly the Innovate program of the McDonald's Corporation. This is the billion-dollar program to put sensors in fryers and soda taps everywhere to create a worldwide "real-time" information system. The plug was pulled after just $170 million was spent, with the first extensive report on what the system entailed coming from Baseline reporters Larry Barrett and Sean Gallagher ("McBusted," July 2003).

Carr also cites Ford Motor Company's "ambitious effort to write new software for buying supplies." Carr said the initiative "sank under the weight of its own complexity." The CEOs of McDonald's and Ford would likely argue that one failed project each does not make a case that their use of technology to support their goals does not work. But the point most likely is this: Some companies are adept at using technology in intelligent ways and others aren't.

Maybe for Ford, it's too complex to figure out how to purchase stuff online. But much more complex is figuring out where all your automobiles are in transit and determining what routes will move them to dealerships the fastest. Yet Toyota Motor did that, using a big data warehouse, and shaved 19 days off delivery times ("Triumphs & Trip-Ups in 2004," December 2004). It's not likely a coincidence that Toyota passed Ford in 2004 to become the world's second largest automaker, in sales volume. And don't be surprised when it passes General Motors within two more years, to become the world's biggest automaker. McDonald's franchisees may be smarter than the folks in Oak Brook, on the other hand. Drive through a McDonald's outlet in Cape Girardeau, Mo., and you may find yourself placing an order to a call center in Colorado and then picking up your order that is more accurate than usual when you move forward to the pickup window ("Out of Scope," November 2004).

Smart use of broadly available technology? Yes. Does it mean technology does computer? You bet. What is so striking about the wailing about whether I.T. matters since Carr so starkly tackled the topic two years ago is that most of the gnashing of teeth came from suppliers of technology, who must sell new gear, programs and services to meet quarterly numbers. Microsoft CEO Steve Ballmer called Carr's premise, "hogwash!" Hewlett Packard CEO Carly Fiorina called Carr "dead wrong." Intel CEO Craig Barrett said, "IT Matters a Whole Lot." And CenterBeam CEO Kevin Francis weighed in on his blog that "IT Really Does and Really Doesn't Matter."

What was really startling was the almost complete silence of the voices who really matter, CEOs of companies who actually use technology infrastructure, applications and services to get things done. Which is every other company in America besides the technology arms suppliers. Even Nick Carr seems to have found only one really prominent CEO, GE's Jeffrey Immelt, who "appears to have touched on my article" in his record of reactions at his site. Which makes the real question not whether I.T. matters, but how much of a difference it makes to the everyday CEO (and COO and CFO). Does it matter to you? Do you care?

Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

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