Posted by: Michael Mandel on January 17
From Peter Coy:
Nearly three years ago, in May 2003, business writer Nicholas G. Carr wrote a provocative article in the Harvard Business Review called “IT Doesn’t Matter.” His argument was that information technology has become a commodity. Every company must have it, but none can get a competitive advantage from it.
Carr occasionally writes freelance articles for BusinessWeek Online, which makes him a journalistic cousin, but I still think he’s wrong. And two new articles help seal the case. One is the cover story in the current edition of BusinessWeek, “Why Math Will Rock Your World,” by Steve Baker. The other is in the January issue of Harvard Business Review (where Carr used to be executive editor). It’s “Competing on Analytics” by Thomas H. Davenport, a professor of information technology and management at Babson College in Massachusetts.
To me, the key point that comes through in both articles is that the world is awash in data, and the companies that thrive are the ones that can harness its power. A prerequisite for that is state-of-the-art information technology.
Along those lines, here’s a tidbit from a conference this morning in New York, also called “Competing on Analytics,” sponsored by Harvard Business School Publishing.
One of the speakers was Glenn Wegryn, associate director of global analytics at Procter & Gamble. Wegryn said that 10 years ago, about 80% of the work in data analysis was obtaining, cleaning, and validating the raw numbers. It took so long that there was hardly any time to do actual analysis. Now, he said, the vast majority of the time is spent on actual analysis. “The power, capability, and cleanliness of the data is the biggest change.”
Irving Tyler, vice-president and chief financial officer of Quaker Chemical, had a similar story about data quality. He said that in the past, people would bring loads of disparate data into meetings of senior executives to make the case for their projects. Now, he says, all the data is collected on a consistent basis and worked up into an understandable package before it’s put before the senior execs.
Now, who says IT doesn’t matter?
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.