Turbulence & Complexity: Why all IT is not the same

Andrew McAfee has just published a study on the impact of IT in different industries in the lasst decade. I am a little suspicious of the findings on methodological grounds (correlation vs. causation) but I want make some different observations here.

So Andrew finds that industries with a high IT spend have experienced more concentration & turbulence over the last decade. As the last decade has seen a great increase in IT spending in certain industries, Andrew assumes that this increased competitiveness is due to increased IT investments. The WSJ article & the methodological article both identify two key areas of IT spend:
- Internet technologies.
- ERP technologies.

The WSJ article then notes with that IT is supposed to make things more stable than less. What can be going on?

I want to suggest this data obscures two opposite trends that were going on during the 90s.

1. The first trend was standardisation. ERP systems drive conformity through organisations. In many ways, ERP systems were the technical manifestations of BPR & corporate centralisation programs designed to instigate control. This is not necessarily a good or bad thing but it is not scary (to senior management).

2. The second trend was the internet. Whilst the major ERP vendors eventually made their platforms internet-compliant, the internet was initially seen as irrelevant and then disruptive, disintermediating and seemingly uncontrollable. In short, it was scary.

So the question I would pose is, is the concentration and disruption in certain industries a function of IT spend (which would have been ERP-based for most of the 90s) or a change in their operating environment triggered by the emergence of the internet?

The point on which this question turns is: Were the industries with high IT spend in the 90s also those most vulnerable to disruption by internet technologies? Because the sales turbulence graph in the WSJ looks awfully like the NASDAQ (which was primarily powered by dot.coms). My guess is yes, but I don't really have the numbers to prove it.

The theoretical underpinning for this would be Alexrod & Cohen. A complex system is understood in terms of variation, interaction & selection of entities in an environment. The extent to which different manifestions of IT impact these qualities will drive the complexity of the system (if such a thing is possible to measure). I see the internet as positively impacting interaction between entites (and ERP being neutral) as it offered many more P2P channels than had existed before. I see the internet postively impacting variation as more business models became possible (and ERP being neutral). I see neither the internet or ERP having a direct impact on selection criteria.

To get philosophical, Andrew's position is somewhat comforting in that it tells organisations: "If you make the right IT choices, you will ultimately be successful. Your future is in your hands". This may be partially true but the more discomforting perspective is: "You have less control over your future than you think. Your nightmares about disruptive technologies and new competitors are real".

What do you think?