Three years after his infamous comments about the failure of IT to deliver business value, former Commonwealth Bank CEO David Murray is now preaching its strategic importance.
Murray is now chairman of the Future Fund Board of Guardians, setup by the federal government to house the remaining share of Telstra.
He spoke about "information and value creation" at the University of Sydney's Computing of the Future symposium in Sydney yesterday.
"There are a lot of issues with ICT that have caused a lot of debate," Murray said, adding much of the debate has centred on whether IT is a source of competitive advantage and the expansive discussion about failed projects.
Murray said the current ICT environment represents a turning point for global economies.
"The value from generally applicable technologies like the internal combustion engine and electric motor at the start of last century does not apply in intellectual property but broad scale implementation," he said. "The commencement of a generally applicable technology is always a turning point for the economy."
That said, Murray stressed the importance of continual investment in research and development.
"If we make the big breakouts from generally applicable technologies, it is too easy to forget basic research," he said. "Many would reduce the funding for basic research and concentrate on applied research."
This, according to Murray, can lead to attempting to calculate the value of research, which is dangerous, because it's like "trying to explain how you leant to ride a bicycle".
He recommends Australia increase research funding by 25 percent to reach the level of other OECD countries.
Murray also referred to Nicolas Carr's mantra of 'it's not so much the technology but what is done with it' by saying IT is "possibly" a source of competitive advantage when information processing itself is the basic building block of the industry, for example Internet banking.
This debate will go on, but whatever the argument it's still important to harness IT, he said, adding if businesses want competitive advantage they have to have processes that are unique.
Murray also argued that no matter how standardized IT components become, there will always be a need for customization for an individual business's processes.
"At the CBA, by the time I finished there was no doubt that the computing system of a bank must be centralized and it can only have one set of systems and experts around that," he said.
The CBA began using computers in the 1960s and its first computer, coined FRED (F... Ridiculous Electronic Machine), had a grand total of 97 MIPS, only one-third the processing power of other banks at the time.
On education and training, Murray said the most urgent issue is maths, science and engineering and the industries need to understand why school leavers aren't going on to study computer science.
"There should be funding into upgrading science and engineering at universities," he said. "The best people to have in a bank are chemical engineers because they work on processes."
A detailed interview by CIO Magazine with David Murray can be found at http://www.cio.com.au/index.php?id=885769048.