Taking a measure of network IT's value

Nick Carr says IT doesn't matter. Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology's Sloan School of Management, says his research shows IT is making a difference.

Even though we have long since put the productivity paradox behind us, debates about IT's value rage on and boardrooms still anxiously eye the network IT budget and wonder if they're getting their money's worth. And well they should. In many companies network IT accounts for 50% or more of capital spending.

But while Carr argued famously in his Harvard Business Review story that IT doesn't matter, Brynjolfsson's facts show otherwise. Based on extensive survey work, Brynjolfsson revealed that companies that are IT-intensive and marry organizational practices to computing usage get a real return on their dollar (see his research here).

Evidence abounds. "You can't just spend on IT for IT's sake," says Jason Brougham, enterprise network manager at American Medical Response (AMR), an ambulance services firm based in Greenwood Village, Colo. "It really has to be aligned with the business. If IT doesn't solve a specific business problem, then it's nothing more than a bunch of blinking lights in a really expensive room."

AMR should know. Some of AMR's facilities were in the path of the recent hurricanes that hammered Florida - in Palm Beach in the case of Hurricane Frances, and in Birmingham, Ala., during Hurricane Ivan - and could have sustained damage at a time when its fleet of ambulances and emergency personnel were needed most.

At that point, the company's extensive IP voice network came into play. It ensured that critical-business functions such as AMR's centralized help desk in Birmingham could continue.

"Two days before Ivan hit, we were in meetings planning how we could get calls out of affected facilities and into other facilities if necessary, depending on where the hurricane went," Brougham says. "We have facilities all over the country, and with our network we're able to shunt calls to other facilities and ensure the business was not affected."

The centralized help desk in Birmingham was closed for two days and all calls were re-routed to a regional office in California, keeping all functionality during a period of increased volume.

In the end, AMR performed without interruption. "So IT does matter," he says. "We are the ones who are tracking where the ambulances are, and we know where an ambulance can be within 10 minutes. We have systems in place - GIS mapping software, GPS location services - that allow us to do that in real time. It makes a difference, not only for the business, but in people's lives."

Brougham says IT can provide companies with a competitive advantage only when there is true alignment with the business, something he says AMR has only recently accomplished. A few years ago IT wasn't always involved in the company's strategic planning process, which led to some less-than-optimal purchases.

"They ended up buying systems the business simply didn't need," he says. "One example is a really cool network-monitoring suite that was well beyond the needs of the company at the time. It sat on the shelf and was never implemented. That wouldn't happen today."