Insight - End of an Era.

(From Financial Director)

Byline: Gary Flood.

The IT industry is dead. It's no longer possible - or worth trying - to achieve competitive differentiation through the use of IT. Companies, as a priority, should therefore reduce their investment in it drastically.

You won't be surprised to learn that leader of the software industry Bill Gates "strenuously objects" to these heretical suggestions, or that the head of chip giant Intel says this is backward-thinking. But you might be surprised to hear that the source of these anti-IT ideas is no less a prestigious voice in corporate thought leadership than the Harvard Business Review.

The publication of an article in the May issue of the journal provocatively headlined, 'IT doesn't matter' has been raising hackles in the IT industry ever since its appearance in May. George Colony, the head of influential analyst group Forrester Research, is just one of many outraged industry commentators who've gone on the attack against the "inanities" practised in the piece by its author, Nicholas Carr, while Fortune magazine put out its own tongue-in-cheek "stupid-journal alert". Yet, at the same time, the piece has been the topic of serious reading and debate by all IT vendors and many worried tech journalists who fear the author may be on to something.

Interestingly, Katy Ring, practice leader in IT services for UK-based analyst group Ovum, says she has been surprised by the kneejerk reactions of the IT industry to Carr's challenge - an attitude she characterises as "Neanderthal". One wonders if there may prove to be more than a little significance in her choice of word, referring as it does to a now-extinct species.

Carr isn't the usual profile of a Review contributor: he's a hack, a professional journalist, not an academic or business school leader. Some of his now numerous enemies have tried to use this fact against him, but a reading of the nine-page piece shows careful research, effective marshalling of figures, convincing use of historical parallels and a refreshing sense of 'emperor's new clothes' truth-telling.