Introduction
Wal-Mart in conjunction with other retail businesses allocated funds to finance a crucial database, a satellite network and store-level point-of-sale systems, this formed the beginning of the retail shop’s IT system. The system is paramount in fostering instant gathering and exploration of chain-wide of store-level information and UPC bar codes (Zook and Graham, 2006, p.19).
During the 1990s, Wal-Mart established Retail Link which permitted the company to be able to link its sales with outdoor information like climate forecasts. This permitted the company to offer additional provisions to its consumers leading to refined accurateness of its buying forecasts.
IT approach
The IT systems at Wal-Mart are approached in three ways including, by ensuring that the company is merchants first, by running its common systems using common platforms and finally by promoting centralization of all of its information systems (Scott, Lundgren & Thompson, 2009, p. 46).
Being merchant first and technologist second mechanisms is used by the company. This approach involves the IT personnel talking to company customers regarding issues of business instead of prioritizing on matters of technology, thus, making the user not to be concern of the technology the company uses in its operations.
The second approach that Wal-Mart uses in its IT system is by running a single system that has a single set of code across the globe and this is achieved by relocating its store operations to newly opened outlets to its own code. This strategy is very beneficial to the company as it has huge cost advantages leading to great reduction of IT budgets to as less as one-half of the sales (Zook and Graham, 2006, p.22).
Additionally it saves the company the hustle of investing in multiple systems. In addition to the cost benefits derived from the single approach, the company is able to leverage best practices that are often embedded in the system in other regions. Thus, it leverages company’s human resource world wide.
Third approach used by Wal-Mart in its IT systems is the centralization of its information system. This approach allows the Wal-Mart’s developers to easily collaborate (Zook and Graham, 2006, p. 26). This mechanism ensures that it is possible for developers to communicate with customers and handle emerging issues in real time.
The various information systems approaches used by Wal-Mart have facilitated various initiatives including the ‘everyday low price’ that is applied to all markets in the globe regardless of the experienced opinion of the managers on the nature of the local market.
The approach has prompted the company to introduce its digital supplier network known as Retail Link that acts as warehouse that provide data about the company’s daily sales. Additionally the Wal-Mart’s RFID initiative has promoted information sharing both within an outside the company (Scott, Lundgren & Thompson, 2009, p. 44).
Conclusion
From the discussion presented its evident that Wal-Mart approach to IT systems has enable it to use it to attain competitive advantage while spending less on information compared to most of its competitors.
Among the advantages of the three approaches used by Wal-Mart include real-time handling of customer issues, promoting information sharing, and ability to leverage best practices that are often embedded in the system in other regions among others. The approaches used by the company are being merchant first and technologist second, running a single system that has a single set of code across the globe and centralizing its IT systems.
References
Scott, C, Lundgren, H, & Thompson, P. 2009. Guide to Supply Chain Management. London: Springer.
Zook, M. & Graham, M. 2006. Wal-Mart World: The World’s Biggest Corporation in the Global Economy. New York, NY: Routledge.