Despite the commoditization of information technology, companies are growing increasingly dependent on it for strategic advantage.
The author re-examines the role of IT as a commodity and considers whether IT can still be used to provide strategic advantage. In discussing regulation, outsourcing relationships and corporate dependence on IT, this article further clarifies the argument that IT will soon be handled by larger corporate utilities. While agreeing that most IT functions can be outsourced to utility-style providers, the article suggests that in-house corporate computing can still provide a strategic advantage.
By examining failed IT outsourcing relationships, the author identifies key aspects of IT, including auditing and reporting procedures and customer-facing resources that are too important to a firm’s success to outsource. The author argues that to better exploit these advantages, managers should embrace the fact that IT is no different than any other corporate function, instead of placing it in its own silo separate from other business practices. Only then will the real commoditization of IT be complete and the long-promised benefits be seen.