The End of Corporate Computing - Literature review Example

The End of Corporate Computing Name Date Executive Summary Information technology is a sector that is continuously changing through innovations and improvement of previous technologies. These innovations and development have been analysed by different authors expounding on different topics and sometimes proposes news models that may improve past innovations and technologies. An example of such author is Nicholas Carr who has written numerous articles on technology and innovation. “End of corporate computing” is an example of one of his article that he explores the possibility and applicability of utility computing in that the corporate entities move from asset based capital to resource sharing. He enumerates numerous benefits associated with this approach and provides building blocks of this new technology. However, this innovation is inhibited by attitudinal behaviours but if these behaviours are overcome, the resulting industry will constitute IT utilities, component suppliers and network operators. Managers should understand that change is inherent and thus should employ the appropriate technology that balances with the organisational resources and the long-term benefit of the given technology. Thus, strategising before implementation is paramount to ensure that certain idea becomes factual. Companies and institutions are looking for areas that they can maximise on competitive advantage. Numerous strategies are in place that aids in ensuring that the organisations may obtain competitive advantage. However, the use of information technology has become a major component that every sector tries to employ in fulfilling the organisational requirements. The idea of information technology has been discussed and written by many individuals including Nicholas Carr. Carr has become much concerned on innovation and he is championing fundamentals associated with information technology. Carr has written numerous books and articles including the 2008 book, The Big Switch: Rewiring the World from Edison to Google and a provocative article in 2003 “Does IT Matter?” that was published in the Harvard Business Review. Specifically, the article argues that IT investments do not provide companies with benefits associated with strategic advantages. This he attributes to the fact that information technology is easily accessible and when one company adopts a new technology, the other companies (competitors) embrace the same new technology. Another important article that was presented by Carr is “The End of Corporate Computing” in 2005 published in the MIT Sloan Management Review. Therefore, the aim of this paper is to summarise the main points in the article, The End of Computing, expounding on the main points, analysing applicable new technologies and recommending industrial players. In every article, there are major points and dimensions that are presented by the author of the author. This scenario also occurs in Carr’s “The End of Corporate Computing” in which the major points are: Information technology is maturing from general purpose to specific purpose It is near the end of corporate computing Movement from assets (capital investment) to shared resources Introduces utility model that balances between resources and requirements Centralisation and consolidation of information technology services resulting in cheaper and more accessible products Technological building blocks, which are grid technology, virtualisation and networking Technology is inhibited by behavioural attitudes, which include past investments, traditional practices and beliefs, and management assumptions. After the change, the resultant information technology and its industry will be associated with IT utilities, network operators and component suppliers. Information technology is a sector that is maturing like any other technologies in the past. As maturation continues, information technology becomes more commonplace, it becomes more accessible, cheaper, institutions and firms learn how to utilise them resulting in sharing of best practices. However, the sharing of best practices results in a situation that a company cannot be distinguished easily between each other resulting in neutralisation of characteristics associated with competitive advantage. Competitive advantage is still important and crucial for business world, but it is becoming harder and harder to sustain the advantage. This means that organisations and companies should introduce new strategies that will provide crucial competitive advantage (Berman, Fox and Hey, 2008). Most corporations are shifting from assets based financing to utility based. Capital asset is an important within corporations but it has been fragmented because of numerous requirements that the corporation should embrace. Moreover, in its general-purpose perspective, it requires large capital investment and results into redundant expenditures and not maximizing on the capability of the technology. This situation favours the producers and suppliers of the product and thus leads to the idea of centralisation. For the short term, this strategy is beneficial to the supplier but it is not sustainable because of benefits that may be associated with sharing of resources (utility computing) (Sahai and Graupner, 2005). This approach will result in a new framework of this industry that will bring into consideration three components, which are IT utilities, component suppliers and network operators. IT utilities are the companies that offer the service and usually are the backbone of utility computing. Component suppliers are those company that supplies hardware and critical features that are important in fulfilling the requirements of the utility. Network operators are those organisations that provide means of connecting (internetworking) between utilities and companies that utilise them (Vasilecas, 2005). Technological advancement has resulted in creation of foundation that includes incorporation of three major building blocks, which are web services, grid computing and virtualisation. These three features provide a platform of bringing incompatible technologies into a single working technology. Virtualisation removes the difference that exists between different computing platforms into single operating systems. Grid computing brings together different hardware to work together and web services standardises interfaces that exists between applications resulting a scenario that these modules can be assembled and disassembled easily. However, advancement of technology is inhibited by the presence of attitudinal behaviours. These attitudinal behaviours include traditional practices, investment of the current technology, and management assumptions and beliefs (Sahai and Graupner, 2005). Carr compares the development and maturation of information technology to original company run power plants in the late 1800s and early 1900s. Usually owners of the factories and companies operated their own power plants. However, with time the electric utilities were introduced that functioned better in terms of economies of scale and thus these companies stopped operating their electric generators and instead outsourced energy supply to electricity utilities. In the same way, Carr introduces utility computing in which it will replace the traditional way of information technology. However, before this leap to utility computing is achieved, it is important to make improvements on efficiency, reliability and security. Nevertheless, there are new features that are associated with information technology – Internet, and when it is combined with software/ hardware (features that are commoditised) will change today’s client/ server model to utility computing (Berman, Fox and Hey, 2008). This is because there are many drivers that drive information technology to utility computing. Some of these factors are storage systems, computers and networking gear that are commonly used (Turban, Leidner, and McLean, 2006). However, criticism and negative position of an issue is common to human. One of the major concerns is that Carr compares information technology with other features (hardware) that does not concur. For example, Carr compares electricity/ electrical generators with information technology. Information technology is a flexible issue because it utilises mostly software that drives most requirements of information technology. Nevertheless, information technology is used to accomplish business requirements and thus this feature is associated with economic, competitive and technological forces; features that any business should embrace. Thus, it becomes harder and harder to have competitive advantage (Sahai and Graupner, 2005). On the other hand, in every rule and methodology that is adopted or proposed has its exception. This means that the different ways and strategies that companies can embrace information technology resulting into competitive advantage that is associated with specialisation to specified business process. Thus, if an organisation can embrace information technology in a unique way, do something different resulting in more distinctive strategies will directly result in competitive advantage. However, most of the current information technology is general, not specialised, and hence not strategic. Generally, this means that the article and Carr views to some extent can be embraced into information technology but care should be in place that will ensure these strategies concurs with the objective and vision of the organisations in use (Allen and Higgins, 2006). Carr wrote his article in 2005 and since then there has been great development in the circles of computing. New technologies have been development it that to some extent follows the approach of utility computing. These new technologies are cloud computing, grid computing and autonomic computing. Cloud computing provides a good example of maximising minimal resources to acquire huge benefits. Cloud computing is scalable and virtualised resources in that most services are provided over the Internet. This means that those individuals utilising the technology likely do not possess pre-knowledge of technological infrastructure. Cloud computing incorporates platform as a service, infrastructure as a service and software as a service (Dikaiakos et al 2009). Grid computing is splitting computer resources to enable accomplishment of a task through processing in cycles. It is usually applicable in those situations that they are large amount of data that is supposed to be processed (Turban, Leidner, and McLean, 2006). Automatic computing is an older approach that was developed so that it enables computers to work without intervention of humans. Generally, many institutions are improving on the requirements of information technology in that new products and services are developed fast enough. Technologies are developed based on their application, but there are other technologies that can be grouped to fulfil a single task (Berman, Fox and Hey, 2008). Generally, Carr article illustrates the importance of appreciating change in information technology sector. He utilises the innovation of electricity from corporation properties to making electricity as a utility. Information technology is maturing and it changes from capital asset to sharing of resources. These approaches will ensure that the services that are offered are superior and fulfil effectively the required aims. This has resulted in the introduction of utility computing that champions centralisation and consolidation of IT since most individuals and organisation utilise the same information technology services. The result in the development of technological building blocks that forms the backbone of utility computing but this development is inhibited by attitudinal behaviours especially exhibited by traditional practices, past investments and management structures. However, incorporating utility computing will result in development of new industry, which will constitute IT utilities, component suppliers and network operators. Nevertheless, other developments that concur with Carr approach of utility computing are the autonomic, grid and cloud computing. Numerous technological innovations have placed managers on a precarious state in determining the appropriate technology to incorporate into their industries. In this position, some recommendations that can be beneficial to a manager are: Be continuously update on the available technologies in the market Outsource most services to reduce the cost of operation or overhead costs Be patient with technology in that those companies that jump into a specific technology without prior analyses may be devastating for the organisation. Utilise appropriate resources in maximising minimal resources in achieving more profits and thus fast return on ROI (Return on Investment); Return on investment is the speed or time period that the cost of investment will be returned by a given project. Managers should embrace change through proper formulation and effective implementation on specific issues that affects the information technology of organisation i.e. they should strategy on information technology that is long lasting and at the same time, applicable to company’s requirements. References Allen, P. and Higgins, S. (2006). Service Orientation: Winning Strategies and Best Practices. London: Cambridge University Press. Berman, F. Fox, G., and Hey, A. (2008). Grid Computing: Making the Global Infrastructure a Reality. New York: Wiley Publishers. Carr, N. (2005). The End of Corporate Computing. MIT Sloan Management Review. Available at: http://www.cs.sfu.ca/CC/301/cwa50/Readings/end_of_corporate_computing.pdf Dikaiakos, M., Katsaros, D., Pallis, G., Vakali, A. and Mehra, P. (2009). Guest Editors Introduction: “Cloud Computing, IEEE Internet Computing” 12(5). Available at: http://www.cs.ucy.ac.cy/~gpallis/publications/journals/editorial.pdf Sahai, A. and Graupner, S. (2005). Web Services in the Enterprise: Concepts, Standards, Solutions, and Management. New York: Springer Publishers. Turban, E., Leidner, D. and McLean, E. (2006). Information Technology for Management: Transforming Organisations, 4th ed. Mumbai: Wiley-India. Vasilecas, O. (2005). Information Systems Development: Advances in Theory, Practice, and Education. New York: Springer Publishers. Read More