we will look at Productivity and how IT impact can, in most cases, be quite easily be measured.Then we will look at the Productivity Paradox and more specifically on Nicholas Carr's 2003 article "IT Doesn't Matter" published in the Harvard Business Review.

https://hbr.org/2003/05/it-doesnt-matter

Measured productivity is the ratio of a measure of total outputs to a measure of inputs used in the production of goods and services. Productivity growth is estimated by subtracting the growth in inputs from the growth in output it is the residual. There are a number of ways to measure productivity.

Example of measuring Labour Productivity

https://www.smartsheet.com/blog/how-calculate-productivity-all-levels-organization-employee-and-software

Transactions are what is unique to a business

- The value of an IT investment is reflected in systems that reduce transaction costs i.e.-

Transaction Efficiency

Carr's article "IT Doesn't Matter" leads us to ask

Does IT Matter?

Carr stated that although it would be reasonable to assume : "that as IT's potency and ubiquity have increased, so too has its strategic value"

His core argument is that scarcity is the only thing that makes a resource "truly strategic". Only then can that resource become the basis for "sustained competitive advantage"

He stated that IT does not matter

His major arguments are laid out below :-

Generic IT Systems are commonly available; therefore, all can compete, and IT has lost its strategic value. "You only gain an edge over rivals by having or doing something that they can't have or do. By now, the core functions of ITdata storage, data processing, and data transporthave become available and affordable to all.¹ Their very power and presence have begun to transform them from potentially strategic resources into commodity factors of production. They are becoming costs of doing business that must be paid by all but provide distinction to none."

Generic IT Systems are commonly available - proprietary applications are doomed :-"IT is also highly replicable. Indeed, it is hard to imagine a more perfect commodity than a byte of dataendlessly and perfectly reproducible at virtually no cost. The near-infinite scalability of many IT functions, when combined with technical standardization, dooms most proprietary applications to economic obsolescence. IT has become a commodityHe stated that from the point of view of Electricity, telephones, the internal combustion engine etc. :-"as their availability increased and their cost decreasedas they became ubiquitousthey became commodity inputs. From a strategic standpoint, they became invisible; they no longer mattered. That is exactly what is happening to information technology today, and the implications for corporate IT management are profound"

Any competitive advantage gained from investment in IT investment will be quickly eroded.IT is like electricity, there is no barrier to entry therefore competitive advantage is lost or easily challenged.Is this true, that IT reduces the barriers to entry into a market?Is this a good thing? Does it allow for the application or service offered through the IT platforms to become the distinctive, "Scarce" commodity to gain competitive advantage?

Because according to Carr, when novel technologies become more generally available (after a massive investment over a period of time- "the buildout phase")"By the end of the buildout phase, the opportunities for individual advantage are largely gone. The rush to invest leads to more competition, greater capacity, and falling prices, making the technology broadly accessible and affordable. At the same time, the buildout forces users to adopt universal technical standards, rendering proprietary systems obsolete."Is this the same for IT as it is for electricity or railroads etc.?

IT technology is reaching saturation and IT risks now exceed IT advantages.Carr argued that companies should not invest in high risk IT infrastructure ( who does?!) and only invest in low-end technologies with absolutely known benefits (sage advice?)What (strategic) competitive advantage can you think of that a major company has over the other because of the type of IT they have?

Please address the following query:

Is Carr Right?

Why or Why not?

If so, why are you studying IT?If not, why is Information Processing a high-paying career?