Carr's commoditization thesis versus strategic alignment in IT

¶ … Nicholas Carr (2003) draws parallels between the rise and fall of other capital-intensive industries and it. By referring to it, Carr is referring to Information Technologies, which in the context of his article are enterprise hardware and software systems, networks, and their associated services as well. He states that it has nearly completed it's build out, and no longer delivers differentiation to the companies who invest in its use. In fact he argues, using Forrester Research, that the more a company spends on it the less financially successful they are. Carr's assessment of it is that it has gone from being a highly differentiated asset to more of a service, and provides reference to the electricity and railroad industries for the allegory's illustration. He argues that Web Services, now being offered by the major enterprise software companies including IBM, Microsoft, Oracle, SAP and others is another significant mile marker on ITs' road to commoditization as a service.

In addition to commoditization of it and its transforming into a service, Carr argues that it's basic differentiating value, the re-aligning of information resources to the process needs of companies, has largely failed. He points to the fact that so many network-based storage devices are filled with video files, miscellaneous content, much of it unusable for day-to-day business tasks.

Conversely and contrarian to Carr (2003) Strategic alignment: Leveraging information technology for transforming organizations (Henderson, Venkatraman, 1999) define the essential frameworks for first re-defining business processes, and then aligning it investments to make those strategic processes more effective. These authors contend that it makes significant contributions to the fulfillment of strategic plans across all functional areas of an organization. Further, they show through the use of their Strategic Alignment Model that the synchronization of both internally-facing and externally-facing processes within an organization and outside of it is critical for any organization to achieve its objectives.