"We like the idea of bringing in strong, young minds," Wal-Mart CIO and Executive Vice President Linda Dillman said this morning at the Forbes CIO Forum in New York. Most of the company's current IT employees as well as the new hires work out of Wal-Mart's Bentonville, Ark., headquarters, where salaries and housing costs are lower than in other parts of the country. Wal-Mart also wants to retain centralized control over IT, Dillman said.
Wal-Mart has tried, and largely rejected, IT outsourcing because it didn't deliver as advertised. "We tried offshore development, and we weren't very successful," Dillman said. "We found that the hourly rate was less, but that it took more hours [to complete projects]."
Still, the company is in the process of developing what Dillman called "remote development centers" in Brazil and parts of central America where it has acquired other retail chain operations. "We want to take those associates and have them become remote development teams doing projects outside of the U.S. It will help us bring more of a global understanding to our [IT] development," she said.
Asked what's on her IT wish list, Dillman said her top priority is a tool for effectively managing e-mail. "E-mail overload is the biggest drain on an organization, and there aren't effective tools out there," she said.
Second on her list are tools for effectively managing Wal-Mart's massive inventory of 3,000 servers in Bentonville as well as another 8,000 remote servers. "There is a lot of excess capacity, and we need tools to better manage it," she said.
Dillman said she sees an expanding role for Wal-Mart's dot-com arm. "We've changed our dot-com presence," she said, explaining that what began as a way to sell products now functions more as a marketing arm for the retailer. Looking ahead, Dillman said she sees Wal-Mart using its Internet site to offer customers software-based tools to help them plan their in-store shopping visits, more closely manage their health care and prescription medication usage and purchases and do more research about products they'd like to buy at the store.
Wal-Mart is also working closely with several technology vendors to develop IT-enabled products and services, some of which will be used and/or sold by Wal-Mart exclusively -- at least for an initial period. For example, Wal-Mart has worked with NCR Corp. to develop an ATM-like machine that enables users to get cash and money orders, pay their bills online and purchase phone cards. The machines are being rolled out to Wal-Mart's chain of 3,500 stores now.
The retailer is also working with an undisclosed partner to test the idea of using Wal-Mart's real estate to offer WiMax-based digital services.