IT Strategies in Business: Walmart

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Table of Contents

Introduction
The main elements
The IT strategy of Walmart
Discussion
Conclusion
References

Introduction

The use of information technologies is important for the sustainable work of modern companies that may differ in terms of size, structure, profitability, operations, products, and so forth (Tallon 2007). In turn, it is necessary to explain how various businesses develop IT strategies.

Moreover, it is important to discuss the policies adopted by such a company as Walmart because the organization demonstrates that IT strategy can be critical for the growth of an enterprise and its competiveness. The practices of this corporation have been adopted by other representatives of the retailing industry. Overall, it is possible to consider a resource-based approach to the development of IT companies.

According to this framework, information technologies should be viewed as important assets that can enable businesses to attain various strategic objectives. Moreover, business administrators should involve IT professionals, who need understand the peculiarities of the goals set by the management. This participation will help them design or select the best applications. Thus, it is critical to discuss these issues in greater detail.

The main elements

At first, one should note that the concept of IT strategy can be viewed as the determination of goals that information technologies should achieve for an organization (Tallon 2007, p. 230). Overall, business administrators believe that these tools are vital for achieving the superior performance of a company (Tallon 2007, p. 230).

The IT strategy of a firm should also show how information technologies can be combined with other resources that a company has. Among such assets, one can distinguish the skills of workers, production expertise, customer base, reputation, and so forth. Certainly, there are other important elements of an IT strategy.

It should include such components as the investment in technologies, the protection of confidential data, the training of employees, and other important elements. However, every strategy has to be aligned with the main business processes and objectives set by a business. This task is critical for the efficient use of information technologies.

Overall, companies can take different approaches to the formulation of the IT strategy. Some of them may try to focus only on the specific functions that information technologies should perform (Lai, Zhao & Wang 2007, p. 2198). Managers, who take this approach, attach importance to separate business processes.

For instance, they can focus only on such activities as supply chain management or accounting. In this case, the IT policy is only a response to the strategic business goals identified by the management. This approach is usually very narrow because businesses do not focus on the way in which information technologies can facilitate other business processes.

Apart from that, this functionalist perspective can result in the poor selection of information technologies that can be rendered irrelevant if a company selects a different strategy. So, companies should not overlook this threat that can lead to the considerable losses and lack of responsiveness to changes.

In turn, there is a different approach; in particular, companies regard information technologies as vital resources that can be applied to achieve the strategic goals of a company. Therefore, business administrators focus on the alignment of IT strategy with the main business goals. Additionally, some organizations lay stress on the need for cooperation between strategic managers and IT professionals (Lai, Zhao & Wang 2007, p. 2198).

These stakeholders should work on the development of strategic business goals and identification of the main objectives that information technologies should attain. This partnership is important for the selection of information technologies that may be used for various purposes. Moreover, they should not become obsolete at the time when a company adopts a new strategy.

Apart from that, one should mention that some businesses prefer to change their IT strategies if they have to attain new business goals. However, this approach has an important disadvantage because companies may need to spend excessive costs in order to procure new software or hardware. So, the management should avoid this pitfall.

Researchers argue that IT strategy be related to several aspects of the company’s performance; in particular, it is important to focus on cost-efficiency, governance, interaction with clients and suppliers, ability to adjust to changes, financial reporting, and so forth (Drnevich & Croson 2013). Additionally, IT strategy should be linked to the value chain of a company.

In this case, it is important to mention such aspects as logistics, internal operations, distribution, marketing, and services (Drnevich & Croson 2013). Moreover, they emphasize the role of dynamic capabilities (Drnevich & Croson 2013, p. 498). This approach means that information technologies should help the company adjust to various trends related to the market or competition (Drnevich & Croson 2013; Bakos & Treacy 1986).

Many businesses fail to adjust to these changes because they lack important resources such as the skills of workers or IT infrastructure. In part, this outcome can be explained by the inefficient IT strategies. Moreover, it is important to mention that IT strategies of business are often dependent on the qualifications of IT leaders and their status within a company (Karimi, Gupta, & Somers, 1996).

These individuals need to understand the nature of the business goals that a company should attain. Moreover, they should be able to evaluate a wide range of applications that companies should apply. Such individuals can greatly contribute to the sustainability and effectiveness of an enterprise. In many cases, managers only ask IT professionals to develop applications that have certain functions.

However, they do not fully discuss the needs of a company. In contrast, IT managers should learn more about various business functions that the company tries to perform. This knowledge can help them design more effective IT strategies. These suggestions should be considered by managers. Admittedly, businesses may differ in terms of their operations, production processes, or needs.

So, it is quite difficult to identify specific guidelines that should be followed by managers and IT professionals. Nevertheless, there are certain principles that businesses should follow. In particular, organizations should not pay attention only to separate business function; instead, they need to relate IT policies to a wide range of strategic objectives such as competitiveness, sustainability, relations with clients or suppliers, and cost-efficiency.

Moreover, managers should consider how they will use the existing IT infrastructure if their business processes change. Finally, it is important to ensure that IT professionals can fully understand the nature of strategic goals that senior executives set.

Overall, if the company pays attention to these issues, it will become less susceptible to various risks. Admittedly, the financial performance of an enterprise can be dependent on various factors such as product innovation or marketing strategies. However, a well-developed IT strategy increases the agility of an enterprise.

The IT strategy of Walmart

It is possible to examine such a company as Walmart and its IT strategy. The company decided to invest in information technologies several decades ago. At that time, very few retailers regarded these tools as a critical asset for becoming more competitive. The management did not want to buy ready-made software applications; instead, they chose to create tools that could best fit the needs of the company.

The management concentrated on the development of applications that could improve the work of their supply chain (Basker 2007, p. 195). This task was critical for the growth of the company because this organization had to cooperate with many suppliers that could come from different parts of the United States.

At that time, many retailers struggled with such problems as the shortage of goods or oversupply due to the poor management of inventory. As a result, companies had to incur considerable losses, while consumers had to pay higher prices. Thus, the management of Walmart decided to rely on information technologies to win the competitive advantage. Additionally, their stores were opened in many locations.

Overall, information technologies were vital for optimizing the supply chain of an enterprise. Without them, Walmart would not have become the leading retailer in the United States (Basker 2007). Overall, one can argue that the IT strategy of Walmart has been rather effective because the use of information technologies enabled the company to reduce its operational expenses.

As a result, the company has been able to cut down the prices of products and attract new clients. It is possible to say that the IT strategy of Walmart was later emulated by other retailers working in the United States as well as other countries. Additionally, it is possible to argue that the company has been able to adjust to modify its IT strategy in response to technological developments and market trends.

So, this corporation decided to lay stress on the role of online technologies that help clients make purchases online. Therefore, it is possible to argue that information technologies are critical for the ability of an enterprise to adapt to changes such as purchasing behavior of clients. Overall, the management of the company decided to relate their IT strategies to new market trends, competitiveness, supply chain, and so forth. This approach can increase the efficiency of investment in IT infrastructure.

Discussion

This example is important for showing that IT strategy can be vital for the growth of the company and its competitiveness. One can say that the senior management of Walmart regards information technologies as a vital resource that can enable businesses to achieve strategic objectives. They attach importance to such issues as cost-efficiency, time management, and interactions with clients.

Finally, one can say that this organization perceives information technologies as very important assets that can enable them to improve sustainability and competitiveness. So, the practices of Walmart should be considered by other businesses that operate as retailers.

Conclusion

The development of an IT strategy is a step that can be important for the financial performance of a company, its competitiveness, and its flexibility. Information technologies can be viewed as the resources that can help the organization attain its strategic goals. Apart from that, businesses should not focus only on certain business processes.

Instead, managers need to understand how information technologies can make companies more efficient, competitive, and responsive to changes. Finally, the development of an IT strategy is the task that requires the cooperation of different stakeholders such as senior executives, IT professionals, and employees. Overall, these principles can make IT strategies of businesses more efficient.

References

Bakos, Y & Treacy M 1986 ‘Information Technology And Corporate Strategy: A Research Perspective’, MIS Quarterly, vol. 10, no. 2, pp. 107-119.

Basker, E 2007, ‘The Causes and Consequences of Wal-Mart’s Growth’, Journal Of Economic Perspectives, vol. 21, no. 3, pp. 177-198.

Drnevich, P & Croson, D 2013, ‘Information Technology And Business-Level Strategy: Toward An Integrated Theoretical Perspective’, MIS Quarterly, vol. 37, no. 2, pp. 483-509.

Karimi, J, Gupta, Y & Somers, T 1996, ‘The Congruence between a Firm’s Competitive Strategy and Information Technology Leader’s Rank and Role’, Journal Of Management Information Systems, vol. 13, no. 1, pp. 63-88.

Lai, Z & Wang, Q 2007, ‘Taxonomy Of Information Technology Strategy And Its Impact On The Performance Of Third-Party Logistics (3PL) In China’, International Journal Of Production Research, vol. 45, no.10, pp. 2195-2218.

Tallon, P 2007, ‘A Process-Oriented Perspective On The Alignment Of Information Technology And Business Strategy’, Journal Of Management Information Systems, vol. 24, no. 3, pp. 227-268.

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