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Value-Creation, Experiments, and Why IT Does Matter

April 1, 2010 | Michael Schrage, Michael S. Hopkins | Innovation

How companies think about, manage and ultimately use information technology is hampered by what
Michael Schrage, a research fellow with the MIT Center for Digital Business, calls its reputation as a
back office, report generating function. Too often, he says, companies view IT as a commodity that's little more than infrastructure.

Simply expecting IT to work sets the bar too low, he says. Exponential improvements in microprocessors
and memory chips, coupled with advances in enterprise resource planning software, offer companies
new opportunities to differentiate themselves and transform customer experience.

The challenge is to reverse engineer from the impact you want to have. Schrage cites as an example
Tesco, the U.K. supermarket, which has designed easy-to-use digital tools to support its staff and make
it faster for customers to get in and out of stores.

What most executives don't yet understand, Schrage says, is that over the past 15 years, the cost of
experimentation has collapsed thanks to IT. MBA programs train people to love and analyze data but
not to feel proficient at running experiments.

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