on shifting the balance of IT governance
Pieter Wisse
This is the English version of a paper originally written in Dutch, Strategische verschuiving door moment(um) van infrastructuur, de beurt aan informatietechnologie (in: PrimaVera, working paper 2006-01, Amsterdam University).
abstract
Putting up a slogan, as Nicolas Carr certainly did when he announced that
IT doesn’t matter, might aim at a shock effect. In Carr’s case, however, it
didn’t last. His analysis was one-sided and therefore simplistic. He reasons
from an assumption, largely implicit, for that matter, of free competition. And
he views such an unconstrained market strictly from the perspective of the
individual firm (also read: enterprise, or company). Carr argues that
competition has now also caused information technology (IT) to become a mere
commodity. It follows, he concludes, that IT no longer requires a firm’s strategic
attention.
My aim here is to include what Carr seems to have left out, or even missed
completely, i.e. how ultimately politics govern society. Then, a commodity is
not at all the same as infrastructure. Instead, infrastructure should be carefully
differentiated from commodity. At the scale of society, government can even be
seen to be primarily implemented through infrastructure. Essentially,
therefore, infrastructure is the expression of a political order. The public
charge is inversely proportional to the private charge.
What government attempts to underwrite by means of infrastructure are
conditions for social behaviour, development, and so on. In a democracy,
government especially applies infrastructure for securing equality, precisely
because a free market resulting in commodities would not succeed. So
conceptually, infrastructure actually opposes commodity.
It is not too far fetched to trace civilization as a process of turning
technologies into infrastructure. Seen in this light, so-called
infrastructuralization of information technology is only where a particular emphasis
lies at the current stage of trying to remain civilized. Indeed, I agree that
the individual firm has a diminishing window for strategic advantage with IT. That
is a truism, really, when IT is taken as ‘existing’ IT. Still, Carr deserves
credit for pointing it out to a large business audience. Contrary to Carr, however,
I argue that not commoditization but infrastructuralization pushes strategic
orientation onward for business, i.e. beyond IT. For the individual firm can
relax strategic effort with IT not just like that, but because government now
takes on the strategic burden. At that point only, infrastructure originates.
The political concept of infrastructure starts where the economical concept of
commodity ends.
keywords
Infrastructure, Information technology, commodity, government, market, governance,
Nicolas Carr.
1. Introduction
2. Putting a finer point to IT!
3. Competitive advantage as the core question
4. Commoditization
5. Infrastructure as social contract
6. Governance (f)actor
7. About equal rights
8. Moment(um)
9. Why is Carr even more right than he realizes?
Coming up with a provocative title is an art mastered to perfection by Nicolas Carr. While vendors were busy moving their business once again into growth figures, growing shareholder value, etcetera, Carr published his article ‘IT Doesn’t Matter.’ Had he delivered a devastating blow? Motivated, no doubt, by an immediate chorus of critics he soon followed suit with the book-length essay Does IT Matter?1
There is of course a serious risk involved with the sloganesk title. The article’s and/or book’s text itself may be poorly understood, that is, when they are actually read at all. When that happens, the author simply fails influencing his audience as he intended. For just a short look at such a title may cause somebody to oppose what (s)he reads into it as the author’s message; end of exchange. And to be honest, doesn’t make the gut reaction “Well, of course IT matters!” solid sense?
After additional reflection, it must be admitted that Carr does have an important point. But, then again, he also doesn’t. I therefore extend his analysis, rescuing it for balanced consideration. Yes, I agree that this time around for information technology a change of perspective is urgently required. Certainly, and as I demonstrate later on, several arguments can easily be harvested from Carr’s recent publications. Those arguments depart from his titles in the sense that he does supply … reasonable arguments. Yes, what currently goes around as IT no longer offers significant strategic, or competitive, advantage.2
Stop, stop! No, Carr hasn’t delivered a flawless case. I do have criticisms
going beyond just dismissing his titles as overly simplistic. Additional perspective
and arguments surprisingly result in actually strengthening Carr’s conclusion. I
believe that he missed even the strongest argument, an oversight caused by a
poor understanding of the nature of infrastructure.
Indeed, current IT is not a strategic differentiator for a single business firm
anymore, at least not for any significant period. My additional perspective is
that, once the infrastructural potential of a particular technology — and of
course we are now witnessing such a development for IT — gets recognized,
government reports for duty as the guardian of the public domain. At least in
democracies, government is actively involved, please note, in varying
capacities, in the whole life-cycle of infrastructure. The government’s
objective is elimination of some factor which is considered to favour unfair
competition. For government, by the way, what companies engage in is only a
subclass of competition. Government selectively intervenes in order to reduce
some inequality for the purpose of promoting the quality of the society as a
whole. For example, and please note, especially so, government also promotes
equal opportunities in education. The argument systematically goes — I don’t
say here that it always works out! — that what benefits society, must needs
benefit its members. It should be clear, then, that IT’s strategic relevance is
now paramount for government. With an inverse proportionality at work, there is
in fact a strategic shift from business economy to politics, a process that
Carr didn’t identify. My comprehensive argument is that IT’s diminishing
strategic relevance for the single firm is grounded to a large extent on government
acting strategically by incorporating IT as infrastructure.
What does Carr actually understand the concept of IT to cover?
It is important to stress that I am talking about the technology itself.3
Quite, but doesn’t he place a capital I before the capital T?
I use “IT” […] as denoting all the technology, both hardware and software, used to store, process and transport information in digital form.4
So, Carr limits his concept to information technology and even more precisely to digital information technology. Yet another provision for his argument appears:
I am talking about the technologies used for managing information inside and between companies in what has come to be called the developed world.5
His allusion to the ‘developed world’ can pass here without comment, but an exclusive focus on “companies” cannot. Considering his intended audience for his original article, that is, readers of Harvard Business Review, it only seems logical to concentrate on the business sector. Indeed, as Carr develops his argument, he more and more directly addresses management of for-profit organizations. He supplies recommendations for which he continues to assume, as I read his text, near complete discretionary powers for the individual manager of the individual firm. It all looks as if Carr suggests that a manager can make either good or bad decisions about infrastructure, but anyway those decisions are always irreducibly the manager’s very own.
I hold a different view, because precisely the space for individual discretionary power qualitatively changes when ‘something’ acquires the status of infrastructure. As a consequence, for some aspects of individual behaviour — opportunities for — variation decrease, or are eliminated altogether. Rather than an inconvenience or disadvantage, such variety reduction in some respects is really what infrastructure should help accomplish. By definition of infrastructure, the manager cannot make distinctively individual decisions and/or perform divergent actions. ‘Something’ just wouldn’t be infrastructure if he still could.
Then, what use is infrastructure? Constraints for aspects/respects covered
by infrastructure, are intended to extend the powers of discretion as measured
by other aspects.
For instance, take a public road between A-town and B-town. It’s public, so
everybody can use it. Indeed, there is a demand for road behavior tending to
uniformity, i.e. behavioral constraints apply such as keeping to a particular
side of the road while moving, etcetera. But of course that’s not all there is
to the public road. More people can now access B-town for more purposes. As a
bottom line, everybody from A-town stands to gain through enlarged strategic
potential. In the other direction, the same goes for all inhabitants of B-town.
This macro-perspective may differ from individual micro-perspectives.
Particular variety rules for the single company, or for anyone operating as a
social actor (also read: stakeholder).
Depending on his prospects, position(s) of power, etcetera, the actor in
question can exert some influence. Such actors’ dynamics establish
infrastructure as resulting from politics. For there’s politics at stake
whenever there are multiple stakes. Then, it is a matter of public choice. (A)
democracy is all about rules for politics as process. Government is the process
executive for its allotted period.
Presumably, Carr is especially familiar with the United States of America. Most likely, infrastructural policy is more (neo)liberal in the USA than in many of the other countries in the “developed world.” Nevertheless, laissez-faire markets, competition and so on for infrastructure are also regulated in the USA by its government (if only by enforcing market liberalization). Although national and now increasingly also supranational infrastructural policies may vary greatly, their constant factor remains politics. Yet, all that Carr remarks on the subject is:
[P]olicy makers and economists are assessing the broad impact of computers on industrial performance and productivity, which will lead to crucial government decisions about the development of the IT infrastructure throughout the world.6
That is, Carr oversimplifies infrastructural development or, to put a finer
point to it, development toward infrastructure. For infrastructure is not just
another “common resource.”
However, Carr’s analysis does have merit. For a few more steps I therefore
follow in his trail, adding my perspective as I go along. Later on, I leave
Carr for placing a stronger emphasis on my own perspective. At the end of the
paper, I return to Carr to conclude that government’s involvement with
infrastructure even reinforces diminishing strategic relevance of current IT
for the individual firm.
As announced, I first follow Carr in his footsteps. For him, a position of competitive advantage is crucial. Carr argues the individual firm’s capacity for competition and he aims to clarify what impact IT might still have.
In general, what does Carr find crucial for a firm, or company?
Distinctiveness is what in the end determines a company’s profitability and assures its survival.7
Then, what is management’s responsibility?
The achievement of differentiation is the overriding goal and the final test of every business strategy.8
Business operations require resources. And business resources deserve to be called strategic when they essentially contribute to some enduring differentiation. This right away explains Carr’s core question: Does IT matter for achieving and maintaining a competitive advantage? No, Carr replies, for
the core functions of IT—data storage, data processing, and data transport—have become available and affordable to all. Information technology’s very power and presence have begun to transform it from a potentially strategic resource into what economists call a commodity input, a cost of doing business that must be paid by all but provides distinction to none.9
Carr’s preoccupation with the private business sector may be inferred from how he simply views infrastructure as the inevitable, direct result of a process of commoditization. Certainly, when a resource is “available and affordable to all,” by very definition it qualifies as a commodity. Free market competition promotes low prices and wide access. What gets lost for suppliers in the process, though, is precisely what Carr rightly exhibits as vital for a firm’s continuity and growth, i.e. differentiation.
Standardization is in many ways differentiation’s opposite. They — dynamically — balance out in identity. What I therefore also assume as a basic need with customers is that they can simply reuse patterns for behaviour. It explains why ‘interfaces’ for a particular class of resources converge (and as a consequence, suppliers look for differentiation by means that have little or nothing to do with how a product or service is actually composed, functions, etcetera.)
Carr completely bypasses customer social psychology. Including it, I see commoditization progressing in a spiral fashion. After differentiation from raw materials has been equalized, competitive suppliers simply must concede to customers’ primary need for behavioral continuity. As I already pointed out, a customer — usually — doesn’t want a resource that is forcing him to change behaviour, yet again (at least, not without the prospect of some significant advantage). This pressure from conformity extends backwards along the value chain; main components become less differentiated; next, components of those components, and so on, up to raw materials.
Then again, it is precisely such convergence that does create opportunities for … divergence. For a benefit of standardization consists in making additional configurations more simple (also read: less cumbersome) to assemble. So, there’s actually a dialectics of con- and divergence which is impossible to predict (but what many people find irresistible to gamble on). In fact, Carr also remarked:
[T]he introduction of a new infrastructural technology can have complex and often unpredictable consequences.10
However, he doesn’t mention any dialectics. I read Carr as if he believes that a particular resource can be intentionally conceived, designed, developed and deployed as “a new infrastructural technology.” He makes it appear that such a resource can be prepared for “the introduction.” Only what happens next is what Carr regretfully feels to be unpredictable.
Well, of course I also present this last quotation taken from Carr out of its original context. I do him deserved justice by adding that he does have some appreciation of the social nature of infrastructure. He even explicitly mentions a transformation
from a proprietary technology that companies can use to gain an edge over their rivals into an infrastructural technology that is shared by all competitors.11
Such a perspective on development is still too simple, though, once again betraying Carr’s bias. In hindsight, any infrastructure may of course be seen as having originated somewhere and subsequently developed from there. However, whatever starting point is assumed isn’t necessarily “a proprietary technology.” A ‘good’ can be ‘collective’ right from the start. And even when it is a commodity that is turned into infrastructure, from a politically determined ‘turning point’ on, development is a social-politically managed process. In other words, infrastructure is not at all the stuff that companies decide upon among themselves.
There seems to be one appearance which now makes Carr to propose IT as exemplary for commodity:
The programmable microprocessor unleashed the full power of the computer, allowing it to used by all sorts of people to do all sorts of things in all sorts of companies.12
As Carr illustrates with historical examples from rail transport and electricity supply,
as their availability increased and their cost decreased—as they became ubiquitous—they all became commodity inputs. [… F]rom a strategic standpoint they began to become invisible; they mattered less and less to the competitive fortunes of individual companies.13
I cannot but strongly agree with Carr that a commodity is hardly strategically relevant. However, I add the critical proviso that his conclusion applies to the individual firm. For Carr, at the ‘point’ of commodity suppliers have reached a state of equilibrium in their competition. They only compete on price. Otherwise, differentiation is non-existent; standardized, i.e. predictable, behavior is firmly established.
When ‘the invisible hand’ has moulded a particular resource, be it a product or a service, into a veritable commodity, Carr feels justified to define it as infrastructure. I propose a different model for infrastructural development.
Historical illustrations can of course support an argument, but Carr even assumes a fixed pattern for development. For he emphasizes
a distinction between proprietary technologies and what might be called infrastructural technologies.17
He adds:
At times, however, the distinction between infrastructural and proprietary technologies can blur. In the early phase of its development, an infrastructural technology can, and often does, take the form of a proprietary technology.18
I find that Carr blurs concepts, i.e. infrastructure and commodity, that are better kept clearly differentiated. It is not that I don’t recognize that some personal or company’s property can eventually develop into infrastructure. However, it never ‘just’ develops that way; commoditization is far from enough.
A bias of Carr is that he systematically interprets the past from the vantage point of the present. No, ultimately there is no escape from such bias, but in serious analysis we should at least be aware of it and make provisions. What Carr now sees, is IT as infrastructure. He is absolutely right. He forgets to make an allowance for his bias, though. Implicitly, he assumes that therefore IT always was infrastructure, that is, already to begin with, too. It is precisely this persistent reversal why Carr misses what distinguishes infrastructure from commodity. His argument takes on a quality of self-fulfilling prophecy for which the next statement, I believe even a contradiction, sounds exemplary:
Companies will sacrifice distinctiveness if the resulting cost savings are large enough.19
By the way, are cost saving always that important? Or, as I already suggested above, do suppliers just respond when customers desire that differentiation for a particular product or service comes to an end? Whatever the incentive, then the firm purchases commodities for its inputs and applies as many commodity production factors as possible for commodity outputs. Outsourcing, as Carr quite rightly observes, serves to reinforce the trend of commoditization.
When the locus of technological innovation shifts from users to vendors, as it has with software, it becomes ever harder for companies to distinguish themselves.20
And
even the uses of a new technological infrastructure become homogenized as best practices are rapidly disseminated and emulated.21
Look, Carr does it again! He reason back to the past, which is smuggling in assumptions. What really happens, is that infrastructure only exists as such from a certain stage of development onwards. A defining characteristic of infrastructure is that is does not exist before, that is, not as infrastructure. To be sure, ‘something’ can be a commodity before that stage. Then again, when ‘something’ truly is a commodity, why would government intervene in the first place with infrastructural development? We return later on at length to arguments for government involvement as constituting infrastructure.
Characteristic for infrastructure is also what happens after its ‘constitution.’ For of course infrastructure is subject to change, too. What is different about such change, is that it no longer occurs … naturally. On the contrary, infrastructure implies institutionalization. As its irreducible aspect, an institution controls infrastructure, including its further development (also read: life cycle). In other words, the users of infrastructure are subject to a social contract.
Oddly enough, the institutional nature of infrastructure actually strengthens Carr’s hypothesis of diminishing strategic relevance for IT. What I add is the explicit qualification that only the individual firm can relax attention, not at all government. Here I provide necessary supplements to his argument.
I cannot help being struck by Carr’s almost complete lack of recognition of government’s role. Only in passing, as I already quoted at the end of our § 2, above, does he remark that “crucial government decisions about the development of the IT infrastructure” are based on “assessing the broad impact of computers on industrial performance and productivity[.]” How Carr exclusively sees infrastructure from an economic perspective, is shown again at the end of Does IT Matter?:
Determining IT’s influence on productivity is critical. It will help economists and politicians make more accurate forecasts of future economic conditions, and it will help guide government decisions about how and where to invest in and otherwise promote the expansion of their countries’ and regions’ IT infrastructures.22
I suspect that Carr finds his explanation unsatisfactory, for he adds:
But beyond the question of IT’s effect on productivity lie other important issues, many of which have not received enough attention.23
But that’s immediately where the argument in Does IT Matter? stops. Apparently Carr feels no compulsion to effectively investigate those issues.
My approach starts from the opposite direction. I therefore assume that (a) government exists. Agreed, such generalization is also dangerous. Government is never a single institution but my general assumption will do here for argument’s sake. So, there is government. Then, what does government actually do? Besides several other topics, government’s main tasks are outlined in the Constitution. As a specific example I take the government of the Netherlands (but any democracy will do).
The Constitution (of the Netherlands) contains an introductory paragraph self-proclaiming it as “the most important document of the state.”24 For
[i]t supplies the fundamental rules for organizing our state; it also stipulates the basic right of citizens.25
Here, I am of course primarily concerned with those “basic rights.”
All who are in the Netherlands are treated equally in equal cases.26
The next sentence immediately follows:
Discrimination […] on whatever ground […] is not permitted.27
My initial interpretation was that this next sentence provides some explanation of what the sentence before already stated. I thought so, because that next sentence actually contains a list of specific topics. Those are just as many “ground”s forbidding discrimination: “religion, (other) existential conviction, political persuasion, race [and] sex.” Leaving aside the problematic character of categorization, apparently a difference regarding one of those topics doesn’t count for qualifying particular “cases” as unequal for treatment.
What is also problematic, of course, is whether such a list of topics is sufficiently exhaustive. It is more than likely that “on whatever ground” was added on purpose, so as not to miss anything important. But if discrimination is not permitted “on whatever ground,” why still include a list of specific topics? Logically speaking, the list is redundant. For it already says that discrimination is never allowed, period.
Yet, it is also essential how the prohibition generalized into “on whatever ground” effects the rule of conduct stated in the previous sentence. Again from a strictly logical point of view, what the next sentence at most clarifies is that with respect to treatment, unequal cases just do not occur. And this makes “in equal cases” redundant, doesn’t it?
No, it doesn’t, not really. For there has to be room for some unequal treatment, too. So, what this conceptual struggle with social equity, right away in the very first article of the Constitution of the Netherlands, exemplifies is that government promotes what might be called equal treatability. As — government succeeds in making — persons differ less, at least practically the problem of unequal cases will not arise. That could be called the government principle of equalization. It’s where government actually initializes equality in treatment with the very purpose of increasing homogeneity for future cases.
Such initiative, at least that is what I believe,28 usually does not originate with government. Most probably it is a development that starts in the private sector. Then, at a particular stage the government may take charge. Please note, such a development then fundamentally changes character. Now Carr’s exposition gives us the impression that for IT he sketches a development which hasn’t reached that stage of government taking charge (also read: control). It doesn’t stop him, though, to already apply the label ‘infrastructure’ throughout. By labelling too early, Carr in fact misses infrastructure’s determining characteristic. It is government’s visible hand that marks the transition, only after ‘something’ can be rightfully taken as infrastructure.29
Indeed, the Dutch Constitution mentions what government should do, albeit in general terms:
Promoting sufficient employment is subject of government care.30
Social security for the population and distribution of prosperity are subject of government care.31
Government care is oriented at the habitability of the country and at the protection and improvement of the environment for living.32
Government takes measures for promoting public health.33
Promoting sufficient housing accommodation is subject of government care.34
[Government] creates conditions for social and cultural development and for recreation.35
Education is subject of continuous care of government.36
Although the Constitution is once again limited to a list of topics, in reality complex relationships hold between so-called subjects of government care. Interdependence makes government’s charge all that more complicated. Given such variety, it is practically impossible — and, by the way, even undesirable from the perspective of promoting social dynamics — to establish “equal cases.” Efforts directed at equality as such shift toward opportunities and conditions. A practical, more realistic emphasis on equal conditions explains government’s compulsion for infrastructure. Infrastructure can, if not completely fix, at any rate diminish inequality with respect to some conditions for participating in “cases.”37
Contrary to Carr’s hypothesis, government’s encompassing care of — conditions for — equality positions accurately why infrastructure does not result from commoditization. A western democracy such as the Netherlands takes a particular theme for a “subject of government care” as soon as it becomes clear that continued absence of regulation is disadvantageous for conditions for equality. In other words, the risk, evidence, etcetera, of inequality are what move the government to take action. So, infrastructure as-equality-of-conditions originates from inequality. From a particular moment on, government guarantees the conditional equality; by definition, infrastructure is invested with formal authority.38 And a resource that really is a commodity, can just remain … commodity.39 Why bother?
The moment for genuine infrastructure has come when a particular resource, or set of resources, — what follows here represents the perspective of government — is on the one hand recognized as a necessary condition for equality in social “cases,” but on the other hand will not achieve the status of a commodity. A true commodity is by definition a standard de facto. Through infrastructure, a standard de jure is established; government enforces equality.
Carr might have become confused because a standard de jure usually
originates from what seems the primary candidate for a standard de facto. But,
please note, that’s just how is seems. It is only — again, this is an attempt
at presenting government’s perspective — when the standard de facto is beyond
actualization for a particular resource, that is, it will not be a
true commodity, that it should be considered as a standard de jure, i.e. as
infrastructure. Carr is mistaken to view infrastructure as, say, the next stage
in free-market commoditization. In a vital respect, it works precisely the
other way around. It is because commoditization does not occur why government
intervenes.
Of course, government creates, promotes etc. markets with infrastructure.
However, what an infrastructure essentially conditions, is removed from market
competition (as such removal is the raison d’être of infrastructure).
Social dynamics of this kind are also not unique to current neoliberal capitalism. For example, B. Kempers documents the development of the city state of Siena between 1250 and 1350 in terms of
the functional relationships between economical, political, and cultural processes, between differentiation on the one hand and integration on the other.40
Carr limits commerce, trade and industry to the strategic space of separate firms. In contrast, Kempers explains the prosperity of Siena, now a provincial town in Italy, during the Renaissance as follows:
The economical development, often labelled ‘the rise of
capitalism’, cannot be imagined without a state apparatus maturing
simultaneously [. …] The network of profitable professions, serving to finance
a government oriented at continued integration, and the protection by the state
of market conditions are the economical and political aspects of a unified
social process.
The distinction between the ‘free’ market on the one hand, and the oppressive
or beneficial state on the other hand, has been suggested by nineteenth-century
political ideologies of opposition, liberalism and socialism especially.
Historically and sociologically, those are indistinguishable facets of a
single, rather complex development. [… C]ommercialization and pacification, taxation
and power monopoly all fitted like cogwheels[.]41
After criticizing Carr’s argument, it may sound odd to support his conclusion. He is mistaken about the relationship between commodity and infrastructure. But his recommendation for individual companies is certainly valid. I have already said that Carr was probably writing strictly for a business audience.
But then, the government also draws up a strategy. Using familiar business terminology, its strategy should reflect the mission statement. The government’s mission statement is supplied by the part of the Constitution that covers fundamental rights and duties. Here, I take it from there and concentrate on strategy. My extensive reference to the Constitution serves to support the hypothesis that the practical purpose of government lies with development and management of social infrastructure. Assuming that there is government strategy, too, it therefore actually revolves around infrastructure. It is the key ingredient. The government focus on infrastructure is meant to establish trust. Firms — and first of all citizens, of course — must be able to trust using the infrastructure.
Strategically, firm and government can now be seen at opposing ends.
Adopting resources as infrastructure exhibits the strategic interest of
government. From that moment on, government guarantees quality at a certain
level, is liable for malfunction (with liability also limited in practice),
etcetera. For example, the resource-as-infrastructure is continuously available
and can be safely used.
How does this make a firm the government’s strategic opposite? To the extent
that the government really delivers according to its strategy, indeed, the
individual firm can relax strategic attention. From the perspective of the
firm, infrastructure is outsourcing at a — more or less — guaranteed service
level.
Carr overlooks how government, through its strategic orientation at infrastructure, actually issues a warrant. A mere commodity doesn’t offer that security. Because Carr makes no distinction between commodity and infrastructure, he also doesn’t recognize the strategic shift. When a resource is ‘just’ a commodity, the security that — only — infrastructure can provide is lacking. Managing its risks, when applying commodities the individual firm still needs to take precautions on its own initiative, thereby unilaterally increasing so-called transaction costs. It certainly is no coincidence that Carr only proposes two alternatives for influencing these costs:
[I]t makes sense for some business activities to be coordinated by managers within a formal, hierarchical organization, rather than to be coordinated by the marketplace’s invisible hand.42
However, there is also something such as the public hand, helping the private hand. For Carr, it’s not just that the public hand is also invisible; it simply doesn’t exist.
Infrastructure, in fact, leaves the individual citizen and firm without a
choice as far as risk management is concerned. For the resources in question
are organized under government control. Infrastructure therefore, say, fixes
some aspects of business processes at a predetermined value, or at a specific
range of values. The effect for an individual company is of course that even
less space results to manoeuvre strategically — for the aspects involved — than
it would have when such resources would only be commodities. Is that a problem?
Government’s mission is realized when on the balance the firm — and the
citizen, of course — is freed to develop aspects that hold greater value for
both the individual and society as a whole.
That’s right, over time there are cycles. Equal conditions enable a particular
firm to develop with less effort than would otherwise be required something
that subsequently stands out. It differentiates itself. But what starts out as
a difference may become classified as the next condition for equality, and so
on toward new infrastructure.
Carr is right about the firm, but myopic as far as society goes. IT’s strategic relevance doesn’t disappear. It shifts. The very nature of government dictates that nothing is more strategic than social infrastructure. And it now is IT’s turn, as it/IT is increasingly recognized as requiring infrastructural status. So, Carr is simply off the mark by arguing that
in general[,] IT’s strategic role has diminished rapidly and inexorably.43
Such a “general” conclusion is not realistic. Instead, the strategic center of gravity shifts to government. It is the “strategic role” of government to create equal conditions for social actors such as citizens and firms. After resources become infrastructure, the strategic interest of government is inversely proportional to that required from individual actors. IT is no exception.
Notes
1. On/in his additional book, Carr explains that it (p xi)
“deepens, expands, and extends a point of view that I originally presented in
an article in the May 2003 edition of the Harvard
Business Review.”
2. The subtitle of Carr’s book reads: “Information Technology and the Corrosion
of Competitive Advantage.” Is Carr’s perspective original? J.N. Luftman, for
example, summarizes in his introduction to Competing in
the Information Age (Oxford University Press, 1996, editor Luftman, p.
5) that “IT […] is rarely capable of delivering lasting value by itself[,
because, e]ventually, a competitor will always find a way of copying or
improving upon any new IT system.” As Carr at least initially made such impact,
especially his book is taken here for reference.
3. N.G. Carr, Does IT Matter?, Harvard Business
School Press, 2004, p. xii.
4. Ibid.
5. Ibid, p. xiii.
6. Ibid, pp. xvi-xvii.
7. Ibid, p. 7.
8. Ibid, p. 8.
9. Ibid, p. 7.
10. Ibid, p. 147.
11. Ibid, p. x-xi. I have the strong impression that Carr means by “proprietary”
that the ‘owner’ has discretionary power of exclusive application of the
particular resource.
12. Ibid, p. 2.
13. Ibid, p. 11.
17. Ibid, p. 17.
18. Ibid, p. 18.
19. Ibid, p. 43.
20. Ibid, p. 48.
21. Ibid, p. 58.
22. Ibid, p. 145.
23. Ibid.
24. Citations from Grondwet voor het Koninkrijk der
Nederlanden 2002, in the main text of this paper called Constitution, are taken from the fifth edition (with
corrections): see http://www.minbzk.nl/contents/pages/7430/grondwet_NL_6-02.pdf.
Translations into English are mine.
25. Grondwet voor het Koninkrijk der Nederlanden 2002,
Algemeen, Inleiding.
26. Ibid, Artikel 1.
27. Ibid.
The “Korte toelichting op de inhoud” of the Grondwet/Constitution
explains in chapter 1 that the fundamental rights concern the government’s
responsibility for the freedom of citizens. In the constitutional state, this
responsibility is dual. “On the one hand, the government must respect civil
liberties. On the other hand, it is government’s mission to create conditions
for citizens to live in freedom.”
“In principle, the fundamental rights hold for everyone — including groups or
organizations of persons — within the constitutional order of the Netherlands.”
Please note how broadly the concept of citizen is taken.
For how I extend Carr’s argument it is relevant that “[f]undamental rights can
also have impact on judicial matters between citizens.” In fact, my primary
concern lies with their interaction, and with infrastructure to facilitate it.
28. Further research is required for supporting the argument. Here, I limit
myself to formulating a hypothesis.
29. Of course, variety is characteristic for government activities, too. There
is a range form legislation — including inspection and control — up to
operational utilities.
30. Grondwet voor het Koninkrijk der Nederlanden 2002,
Artikel 19, lid 1.
31. Ibid, Artikel 20, lid 1.
32. Ibid, Artikel 21, lid 1.
33. Ibid, Artikel 22, lid 1.
34. Ibid, Artikel 22, lid 2.
35. Ibid, Artikel 22, lid 3.
36. Ibid, Artikel 23, lid 1. Elsewhere in the Constitution,
other subjects of government care are mentioned, such as promoting “the
development of the international legal order” (artikel 90).
37. How government decides on conditions requiring infrastructuralization is beyond
the scope of this paper. I am primarily concerned with, say, the dialectics of
equality and inequality.
38. Of course I’m aware that ‘infrastructure’ is being using with all sorts of
meanings. With this paper, I therefore aim at a consistent meaning for a
particular situation, i.e. society. It allows me a (much) wider perspective,
thereby recognizing how government and business strategies are interdependent.
What is interesting, though, is that from such a wider perspective the narrower
application also gains. Then, inside a single firm there might be
infrastructure, too. What counts is enforcement, which implies authority.
39. Yes, that course always remains open to government, too. It promotes a
level playing field for competition. Again, yes, here my sketch is extremely
superficial, for government at the same time unlevels through awarding
monopolies, e.g. with patents. Please note that ‘behind’ such measures, once
again, there’s always infrastructure at work such as I have defined here.
40. B. Kempers, Kunst, macht en mecenaat, De
Arbeiderspers, 1987, p 142.
41. Ibid, pp. 142-143.
42. N.G. Carr, Does IT Matter?, Harvard Business
School Press, 2004, p. 99.
43. Ibid, p. 67.
author
Pieter E. Wisse (www.informationdynamics.nl/pwisse) is the founder and president of Information
Dynamics, an independent company operating from the Netherlands and involved in
research & development of complex information systems. He holds an
engineering degree (mathematics and information management) from Delft
University of Technology and a PhD (information management) from the University
of Amsterdam. At the latter university, Pieter is affiliated with the PrimaVera
research program in information management.
January 2006, webedition 2006 © Pieter Wisse