Looking Back: The Growth of the CIO Role and IT Value

From green screens to flat screens; from a desk in the basement to a seat in the boardroom. Twenty years in review.

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MIS eventually shrunk to just IS (although the dual meaning—information services and information systems—remained). Big believers in technology—companies that didn’t mind a little risk—began opening their coffers for their IS functions.

Wal-Mart was one such company. The retailer realized early on that, correctly harnessed and deployed, technology could be a competitive differentiator and advantage. “Even 20 years ago at Wal-Mart, that message was very clear at the executive management and board level. There was no confusion,” says Mott. “IT was something you changed the game with—not something you just reduced cost with.”

Expectations for IT rocketed in the mid- to late 1990s as large enterprises opened the vaults to spend millions on massive ERP implementations. “The expectations were that IT investments in large amounts could provide competitive advantage,” Orlov says. “That’s not right, though. They could provide the foundational work that allowed you to grow your company. ERP systems were not about competitive advantage but competitive similarity.

“It was an era where the expectations of IT began to separate from the benefits of IT,” she says.

But that perception was not widespread, and it didn’t slow anything or anyone down. Suddenly, CIOs were being quoted on Page 1 of The Wall Street Journal. The explosion, success and popularity of the Internet had changed everything. “It goes back to the adage: There are times when we think we create technology, but technology really creates us,” says Turner.

And then the tide that had raised all boats rushed back out, and CIOs were left to struggle against the suck of the undertow.

Does IT Matter?

After the bust, after 9/11, after the recession, after everything had turned the CIO’s world upside down, an article appeared in the May 2003 Harvard Business Review titled “IT Doesn’t Matter.” The article, written by Nicholas Carr, caused a stir among CIOs and IT vendors, but that was nothing compared to the storm that broke when Carr’s book Does IT Matter? came out the following year. The book built on themes from the article—that while companies were spending more than $2 trillion on IT every year, “IT’s strategic importance is not growing, as many have claimed or assumed, but diminishing.... Information technology has increasingly become, in other words, a simple factor of production—a commodity input that is necessary for competitiveness but insufficient for advantage,” Carr wrote.

As an author trying to sell books, his timing was perfect. It was a brutal period for CIOs—cost-cutting, disappointment and lots of CEOs wondering where all that money they’d spent had gone. To many, the book was another indictment, in a long line of indictments, that harked back to when IT was nothing more than a transaction-processing cost center.

“I was conscious I was saying controversial things,” Carr recalls, “but I had no idea it was going to explode into this debate.”

He says there was a fair amount of hostility from CIOs, but “mainly it was from the IT industry.” Reviews included “Hogwash!” from Microsoft CEO Steve Ballmer, and “Dead wrong,” from then-HP CEO Carly Fiorina. Obviously, the book had touched a nerve.

“Even if they disagreed with me, I provided a context and language where IT could be discussed in strategic terms,” Carr says. “I provided a way for companies to have important and often instructive conversations about the role of IT, where it was just a cost and where it might have some force as a differentiating asset.”

To this day, many CIOs, such as Mott, take passionate exception to the premise of Carr’s book. “All the examples Nick used in the article and subsequent discussion were really about the playing field being leveled in infrastructure,” Mott says. “What he totally missed was the competitive advantage in the development of applications. It’s really about what applications you develop to beat all comers in your industry.”

Asked if he still believes that IT doesn’t matter, Carr responds, “Is IT going to give a company a competitive advantage? In most cases, no, though I would admit that there are exceptions.”

To which Mott retorts, “And it’s those exceptions that are the ones that take market share and win.”

As for those companies that think IT still doesn’t matter, Mott says, “Those are the guys that lose.”

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