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the other operational departments within a corporation, IT must support the direction and goals of the
company. Information technology architecture should be developed to support the corporate strategy
as well as the IT strategy. If additional networks, workstations, or data warehouses are required, they
are either acquired or developed. The chief information officer‟s job is to educate the rest of senior
management about IT‟s ability to create opportunities for the company and help it move in directions
that make sense.
Wal-Mart is known for its everyday low pricing strategy. To accomplish this goal, Wal-Mart had to
change the manner in which it both conducted business with its suppliers and managed the inbound
logistics, warehousing, and distribution of merchandise to its stores. It needed to abolish warehousing
as much as possible and quicken the process by which stores ordered and received merchandise. Also,
Wal-Mart needed to eliminate any unnecessary inventory in stores and allow stores to order
merchandise only as needed. Last, lags in its distribution centers needed to be prevented, enabling
goods to be received from their suppliers and immediately shipped to stores.
To accomplish this goal, Wal-Mart designed a systems and technology infrastructure that, through
electronic data interchange (EDI), enables the stores to order goods, as needed, from their suppliers.
Moreover, Wal-Mart permitted manufacturers to access computerized sales information directly from
its computers, which, in turn, allowed them to gauge Wal-Mart‟s demand and then stage production to
match it. Wal-Mart effectively shifted the burden of warehousing merchandise from its own
warehouses to the vendors, eliminating the costs of both warehouse maintenance and surplus
inventory. The distribution centers were automated, allowing cross-docking, whereby goods being
received for specific stores were immediately sent to the shipping area designated for those stores,
thus putting an end to time lags.
Wal-Mart currently has the lowest cost of inbound logistics in its industry. Its selling, general, and
administrative expense is percentage points below that of its nearest competitor, enabling it to be the
most aggressive retailer in its industry. Wal-Mart aligned its IT strategy and infrastructure to support
the company‟s overall strategy. Information technology was the agent for change. Without the newer
information technologies, none of the newer strategies and directions could have been successful.
Information Security and Compliance
A new role has begun appearing in organizations—chief information security officer (CISO). People
in this position are responsible for IT-related governance, risk, and compliance issues. Organizations
are realizing that data is a strategic asset and it should be protected. In some cases, organizations are
coming to that realization on their own; in other cases, the realization is being driven by compliance
requirements to such laws as Sarbanes-Oxley (often referred to as SOX), a federal law that spells out
standards for all U.S. public companies and public accounting firms; the Payment Card Industry Data
Security Standard (PCI DSS), a standard for processing card payments; the Health Insurance
Portability and Accountability Act (HIPAA), national standards for health care transactions; and
ISO/IEC 27002, an information security standard.
What this means for an IT organization is an additional requirement to understand the compliance
rules and to put procedures and safeguards in place to secure data. With a global organization, there
are cultural differences, informal and formal communication networks, and even different definitions