Is IT Strategic in the New Age of Innovation?
April 21, 2008 by Raj Sheelvant
With their new book New Age of Innovation – Driving Cocreated Value through Global Network, C.K. Prahalad and M.S. Krishnan suggest a major shift in organizational structure-one where IT and the respective management structure form the fundamental foundation of a corporation. I have not read the book yet, but I have been checking out the blogs by the authors.
According to C.K. Prahalad , The industrial system as we know it has been morphing for some time. Now it may have reached an inflection point. Ubiquitous connectivity (e.g. cell phones and PCs), digitization, convergence of technology and industry boundaries (e.g. consumer electronics, computing, communications), and the emergence of social networks have collectively have turbo charged this transformation. This transformation is not only affecting all industries, but will change the way firms create value. Further, this trend will only accelerate.
The world according to the authors, is moving to the requirements that can be bucketed into two themes.
· N = 1, where each customer must be treated as a distinct individual (mass customization)
· R = G, where companies must tap the right resources across the globe to be able to compete.
Therefore N=1 and R=G describes a new age of innovation driven by an aggressive use of IT, and an extensive, sophisticated, real-time supply chain.
According to the authors, IT is going to be very important in this turbo charged transformation. Yes, IT is not only going to be relevant but strategic in this New Age of Innovation.
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Comments (2)
I can not agree at all that IT is fully strategic for companies. As railroads, electric energy were strategic in the past and now they are commodities, IT has also become commodity those days. No matter what you invest in IT, your competitor will catch up soon. It is an illusion to think that IT is really strategic for any business. It is true that for a period of time one may have advantage, but soon this will be gone and your high investiment will also be gone. We must be really careful when we say IT is reaaly strategic for business.
Thanks to all
Nick, you are reiterating the conclusion drawn by Nicholas Carr’s HBR article ‘IT Doesn’t Matter’. Although compelling, I think, conclusion drawn by Nick Carr is wrong. Later on he has corrected his argument in his book Big Switch. Read my blog commenting on his switch… http://itstrategyblog.com/nicholas-carr-contradicts-himself/.
I appreciate your view point which is diametrically opposite to my view point. I think its very short sighted to dispel IT as a commodity. My entire blog is devoted to highlight and point out how companies use IT to create and sustain competitive advantage.
Thanks for your comment.