Introduction
Nordstrom Inc is a departmental store chain in the USA operating in 28 states with the headquarters at Seattle. The company was founded in 1901 by a Swedish immigrant man by the name John W. Nordstrom partnering with Carl Wallin who by then owned a shoe repair shop. Initially the company started as a shoe retail outlet by the name Wallin & Nordstrom but over time expanded to include handbags and accessories, beauty products, house wares, clothing’s and jewelry. According to the book The Nordstrom Way, between 1928 and 1929 the two men retired and sold their shares to two of Nordstrom’s sons and with that came the change of name to Nordstrom Inc. Today the company is listed in the New York Stock Exchange (NYSE).
Nordstrom’s Technical Infrastructure
Technical infrastructure can generally be said to be the underlying base or foundation that constitutes a set of interconnected structural elements installed in an organization or system to provide a framework that supports the entire structure. Nordstrom Inc have made the diversity of their products and opening of many branches a key selling point. A move from dealing in shoes only to other goods has increased their appeal and revenue. With the increase in revenue and profits and also the enlisting as a public company, there arose a need for more a sophisticated method f handling the financial transaction of he company.
COBIT and Sarbane-Oxley Model
After the collapse of Enron and WorldCom among other notable public companies, the US legislators in 2002 drafted an act named after its architects Paul Sarbane and Michael Oxley that would seek to regulate the governance, financial disclosures and auditing issues of public companies. According to Lander in his book What is Sarbanes -Oxley, this act was set to have a reach on the attorneys, certified public accountants, employees, brokers, investment bankers and financial analysts that deal in publicly traded companies so as to prevent a repeat of such a case that befell those afore mentioned companies.
The act facilitates the setting up of a Public Companies Account Oversight Board (PCAOB) that was to be subject to the Securities Exchange Commission (SEC). The function of the board was to oversee the audits of the companies which also called for all public auditing firms involved to register with the board. The Sarbanes Oxley Act recommended the use of COBIT as their internal control integrated framework so as to provide reasonable assurance regarding the realization of set objectives that involves the companies’ financial transactions.
COBIT is an acronym for Control Objectives for Information and related Technology. It consists of a set of trusted and tested practices in information technology a brainchild of both the Information System Audit and Control Association (ISACA) and Information Technology Governance Institute (ITGI). The aim of its creation was to help auditors, company managers and Information Technology (IT) users to realize full benefits of IT the resultant better IT governance and control. In order to understand the intricate workings of this model, the founders structured it into four main domains; plan and organize, acquire and implement, deliver and support, monitor and evaluate.
Nordstrom, as many other public companies, has adopted COBIT in line with the recommendation of the Sarbane Oxley Act. The act was triggered by financial concerns for public companies and its choice of recommendation in the name of COBIT was because COBIT specifically focused on IT controls useful to management, users and auditors.
With the adoption of credit cards and visa cards as the mode of payment in many retail outlets across the US, increased awareness and better security measures needed to be put in place to counter increasing cases of bogus cards that corrupt computer systems. The first step that the retailers were supposed to do was to install computer systems in all their outlets for better and diversified service. As such the Nordstrom has always adopted the latest of COBIT 4.1 version making it a point to train their staff on how to operate, handle, manage and maintain them.
Through the guidance of COBIT, Nordstrom have been able to map out clearly defined roles and responsibilities for senior staff, the board and professionals.
Improvement of staffs efficiency and relevant knowledge in their work jurisdiction has continued to receive a lot of emphasis as per the guidelines of COBIT.
Nordstrom is involved in a very dynamic and risky business of fashion whose stable of products and their relevance changes at a very high rate. With this in mind it is important to note that there is constant changes of prices that are in no way related or triggered by inflation. Such a case will therefore require a very formidable work team and a very compliant IT system.
This company intends to open more branches in the future in new states or in other towns countrywide. Given that the company has other affiliate companies such as Place 2, harmonizing this operation and branches will require a comprehensive network. COBIT has contributed a lot in helping Nordstrom standardize its IT strategy to support an inter-state operations and align the IT infrastructure with the company’s overall business strategy and help with Sarbanes-Oxley compliance.
The management has used the COBIT model to carry out appraisal programs to their staff. By learning what is expected of the junior staff or even the senior ones, the management is able to pinpoint and recommend further training to who they feel requires it. The management will also finance and facilitate the training.
Through the compliance of the COBIT model, the company has been able to meet the requirements of established quality models such as ISO.
There has also been the setting up of a management framework that encompasses all the departments of the company and not the IT section only as it is tradition of COBIT. The framework runs from the initial planning to monitoring and evaluating the whole process from the start. The first step involves defining the IT’s process evaluation, organization and relationship with the whole business idea. At this, Nordstrom have performed almost to perfection. All the transactions carried out at any of the Nordstrom’s outlet are available to the management, according to one of the company’s senior communications manager.
References
Fredrick, P. (2005). Sarbanes-Oxley IT Compliance Using COBIT and Open Source Tools (1st edition) Miami: Syngress.
Lander, P. Guy. (2003).What is Sarbanes- Oxley? New York: McGraw Hill.
Robert, Spector. (1996). The Nordstrom’s Way. New York: Wesley.
Sanjay Anand (2006). Sarbane Oxley Guide for Finance and IT Professionals. New York: Wiley.