The early stages of any industry are marked with entrepreneurial spirit, risk taking, and general confusion. Competitive advantage is measured in uniqueness and technological advancement. Over time, the kinks are worked out, and a more mature, stable industry emerges. An industry marked by continuous improvements in efficiency and service over radical technological shifts. This is not to say that innovation doesn't occur, it does, just in a more targeted, and typically incremental, way. Competitive advantage in mature industry relies on hitting the center of the target more consistently, and more rapidly than competitors, while watching the horizon for the next disruptive, industry changing event.

In his May 2003 HBR article, Nicholas Carr suggested it was time for business to make IT grow up. That IT has matured beyond competitive weapon status, and needs to focus on providing infrastructure support to line functions.

I think Mr. Carr is half right. There is a large portion, but not all of IT, which has become infrastructural in nature. Competitive advantage exists in infrastructure though. The IT maturation process has left IT a bit messy in many organizations. Simplifying, consolidating, and streamlining IT infrastructure operations will enable strategic competitive advantage for future business operations. This is not simply a statement of cost advantages wrought by efficiencies, in fact that is only a small advantage. Real competitive opportunity will develop through new technologies and services which will ride on the shoulders of mature IT infrastructures. (I refer to this as consolidation of IT infrastructure to enable decentralized business functions) Once custom applications are replaced with mature packaged solutions and infrastructures, IT resources are freed up to re-focus on strategic imperatives. Organizations become more agile because IT can focus on achieving new business requirements over modifying existing applications. Standardized interfaces allow for tighter integration between trading partners, streamlining supply chains. IT becomes more about integration, and less about development, aligning with business interests over technology, becoming more strategic to the business, not less.

The IT organization of the future will have more business analysts, data management specialists, project leaders, and inter-organizational specialists. These organizations will become more capable of dealing with decentralized information flow crossing organizational boundaries. As IT matures, the talent level of our people will need to develop as well. Geeks will need to become more relationship oriented, and the personality of the IT shop will align tightly to the personality of the organization. The role of the new CIO will be to transition IT into the new era of maturity, providing enterprise leadership to ensure agility and competitive advantage through “Outbound Processing” of information with partners throughout the supply chain.

Consider the implications for IT management and the role of the CIO in our evolving industry. Will the CIO be relegated to the ranks of IT infrastructure operations, letting other senior managers develop strategic IT directions, or will the CIO step forward as the leader of agile cross boundary integration between disparate entities and silos? Can we achieve business agility without first maturing IT operations where feasible?