Optimistic Outsourcing

The editorial entitled “Insourcing” (TR June 2004) indicates that fostering strong ties between the foreign organization and U.S. headquarters causes everyone to be more motivated, more productive, and due to the abundance of new products, happier. Not so fast. Even if we accept that this strategy will promote the development of new products, the most significant employment outcomes will depend on where and how those products are created, serviced, and supported. Those decisions will depend on where those operations will be most profitable. It is by no means obvious to me that development of a new software product in a Chinese lab will mean more tech support jobs in the United States. If anything, successful overseas product development will encourage parent companies to outsource production and postproduction work as well.

Richard Cartwright
Essex Junction, VT

I.T. Matters

Robert Metcalfe missed the point of Nicholas Carrs article I.T. Doesnt Matter (Why I.T. Matters, TR June 2004). As any technology becomes ubiquitous, it loses competitive advantage. Take, for example, the phone system or e-mail. These technologies are only ever noticed when they are not working. No one would ever claim that competitive advantage results from using the latest version of Microsoft Exchange. The ubiquity factor neutralizes any added efficiencies. Organizations should demand a justifiable return on any investment, not just I.T. To argue that today a company could become the next Dell simply by duplicating Dells I.T. is silly. Without a new killer app or a new technical advancement, I.T. is simply an expense to be reduced and managed.

Brian Courtney
North Andover, MA

As Metcalfe argues, information technology does indeed matter when applied competently. Despite considerable initial skepticism, almost everyone these days gives I.T. much of the credit for the astonishing increase in the nations productivity over the past few years. Almost every organization is obliged to keep current in I.T. lest it fall dangerously behind its competitors. A more interesting question is whether an organization can gain a differential advantage through I.T. The evidence is that it can, but only if it is able to develop an information system that effectively supports management objectives and that can adapt to changing needs. Success calls for an uncommon blend of technical and managerial competence. Many of us have been victims, as managers and consumers, of mindless and intractable business processes, inflexible systems, unfriendly human interfaces, and bewildering management reports. That these problems are so common shows that getting information technology right is by no means easy. The few organizations that do it extremely well – Dell and Wal-Mart – come to minddemonstrate just how powerful I.T. can be.

James C. Emery
Carmel, CA

I take issue with Robert Metcalfes assertion that I have made a second career of studies not finding benefits of information technology. I am passionate about the vast importance of I.T. as a competitive advantage commercially as well as militarily. My 1955 masters thesis, completed at MIT, is now considered to be the first business-application study of I.T. ever produced. All I have learned since leaving MIT is that I.T. is a catalyst of excellence but also an accelerator of incompetence.

Paul A. Strassmann
New Canaan, CT

An Eye on the Herd

Here in the United Kingdom, with farming methods and procedures much more antiquated than in the United States, we have had reasonable success tracking animals (“Where’s the Beef From?” TR June 2004). Small to large farms have come up to speed with tagging animals and reporting on their whereabouts throughout the chain. DNA samples at slaughterhouses, ear tags, and now, more frequently, RFID tagging of the animals have brought forward many other benefits to the farmers, such as electronic food allocation to animals based on identity and automatic animal sorting by age, type, and weight. The main problem is cost and the perception that the government is incapable of administering the system and resolving problems. Foot and mouth, mad-cow disease, and other maladies have been sobering here, and most in the industry have come to accept that greater accountability and traceability is good for both business and consumers well-being.

D. Butler
Maughold, Isle of Man