IT Doesn't Matter - Or Does It?
- Lewis Marks (LM & Associates)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- December 2008
- Document Type
- Journal Paper
- 33 - 34
- 2008. Copyright is retained by the author. This document is distributed by SPE with the permission of the author. Contact the author for permission to use material from this document.
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Businesses around the world spend well over USD 2 trillion a year on information technology (IT). Today, some companies spend 50% of their capital expenditures on IT. Certainly, with such a large spend, IT must matter…or does it? Author Nicholas Carr wrote a paper in the Harvard Business Review titled “IT Doesn’t Matter” (Carr 2003). The article eventually grew into a book titled Does IT Matter? and set off a worldwide debate about the role of computers in business and industry. Carr argues that IT has become much like other technologies that were initially revolutionary and strategic for companies but rapidly became a commodity available to all. He uses the steam engine, railroads, electricity, the telephone, and the highway system as examples. He argues that only at the macro level, involving entire societies or economies, can IT provide transformational value. He also suggests that IT managers should take a “follow the leader” approach and focus more on IT’s vulnerabilities such as data security.
Carr raised some provocative points, and the purpose of this article is to address these questions:
- Can E&P companies gain a strategic advantage by taking a strategic approach to technical computing?
- If so, how should a technical computing strategy be developed and how can companies gain a strategic advantage?
For the purposes of this article, IT and technical computing are defined as the technical applications used to help companies optimally find, access, and produce hydrocarbons. The answer to the first question is a resounding “Yes!” Companies can in fact gain a strategic advantage by developing a strategy for technical computing. However, companies must embrace and apply specific fundamentals before a strategic advantage can be achieved. Without these fundamentals, developing such a strategy will not only be a pure cost but also a pure waste of time.
Technical Computing Strategy Fundamentals
Fundamental No. 1: There Is No Such Thing as an “IT Project.” Carr’s article ruffled some feathers and this statement may as well. In reality, there is no such thing as an “IT project,” only business initiatives with the intent of delivering on the company’s goals and objectives. Many of these initiatives may have an IT component, but the goal of the initiative is to deliver tangible, quantifiable business results. When a project is incorrectly classified as an “IT project” it can suffer an ill fate.
All too often, companies make a technical computing purchase decision that is subsequently “flopped over the IT fence” for implementation. Little to no follow up occurs in assessing the outcome of that purchase decision nor are the results quantified. Without this, it becomes easy to lose sight of the big picture, which usually leads to cost overruns, scope creep, delays in implementation, and less-than-stellar results.
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