Back in 2003, Nicholas Carr published his article “IT Doesn’t
Matter” where he states that as IT become more ubiquitous and easy to consume,
they become more invisible. During today’s class, we discussed the question
whether a CEO needs to address IT the same as the electric network, as an
example of a commodity service.
Today, following 100-150 years of development, electricity is
consumed as a service – a person, or a company, contacts the electricity company
and gets connected. This is thanks to years of practice that got us to a point
that electric lines and infrastructure are taken for granted in new buildings
and considered a must-have everywhere. So, a CEO doesn’t need to concern
herself with the way the power is supplied, as long as it does in a reasonable
price.
If we cast this analogy on the IT era, even though it’s been
15 years since his publication, I don’t think that Mr. Carr is quite right
(yet). If we look at IT companies, such as software companies, mobile app
developers and other, the CEO must be involved in IT processes as these are the
main product or service produced by her company.
What about other companies that are not focused around IT?
Well, the world is still in a transition towards a 100% IT-as-a-service. Let’s
leave aside the possibility that we might get there, we can see that some
services are already provided as a service while others don’t. Any company can
get computation and storage services using AWS. In the past, the IT manager
would have to get the CEO’s approval for server equipment and other high-detail
decisions. But with AWS and similar services, the “rails” that run the service
are not interesting – only the price and quality. The risk is lower for a waste
of budget, as the physical infrastructure risks are out-sourced to Amazon.
And yet, CEOs are expected to still be involved in
IT-related decision making that might have strategic implications. Shufersal, a
major food retail company in Israel has been trying to go online for more than
a decade. The company has an online supermarket website, developed solely for
the company. The website is a bit old-fashioned, but was developed as one of
the first websites of its type in Israel:
Recently, Shufersal announced it’s going head-to-head with
the upcoming entrance of Amazon retail services in Israel. This decision
includes launching of a new website that will offer commerce options that do
not rely on food products, but general commerce including imports. This is a
strategic decision that requires a huge IT effort and investment – it’s unique
for Shufersal. This is the upcoming website current status:
The CEO must be involved in the details of the effort
required for this kind of transition.
On the other hand, other food retail companies in Israel are
not interested in going head-to-head with Amazon. Tiv Taam and Mahsanei Hashuk
apparently want to focus on their current domain. If you go to the online
version of supermarkets that belong to these 2 companies you immediately see
they have a really similar user interface:
The companies are totally different with different stake
holders – we can only conclude that their online supermarket is a product of an
online service that allows food retail companies to out-source this need.
So in this case, the investment and risk in establishing an
IT support for online retail is probably lower than Shufersal in past days and
now.
CEOs cannot still treat all IT aspects as a service,
but we’re slowly going there.
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