Case Study Information Systems Utilizationof Walmart Inc PDF

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Information Systems Utilization of an Organization: The Case of Walmart Inc. Research · February 2020 DOI: 10.13140/RG.2.2.34979.81447

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COLLEGE OF COMPUTER AND INFORMATION SCIENCE Academic Year 2019 - 2020

INFORMATION SYSTEMS UTILIZATION OF AN ORGANIZATION: THE CASE OF WALMART INC.

Student: Gene Joseph Villalobos Garcia

Course Adviser: Dr. Ellenita R. Red

A Final Project Submitted In Partial Fulfillment of the Requirements for the Course of

IS100 Fundamentals of Information Systems

TABLE OF CONTENS

BACKGROUND OF WALMART INC. ................................................................................................. 3 MISSION, VISSION, OBJECTIVES, AND GOALS............................................................................. 3 Mission ................................................................................................................................................... 3 Vision ...................................................................................................................................................... 3 Objectives ............................................................................................................................................... 4 Goals....................................................................................................................................................... 4 INFORMATION SYSTEMS ECOSYSTEM .......................................................................................... 4 Database System, Data Center, and Business Intelligence ..................................................................... 4 Telecommunication, the Internet, Intranets, and Extranets ..................................................................... 5 Electronic and Mobile Commerce and Enterprise Systems ..................................................................... 6 Information and Decision Support Systems ............................................................................................ 7 Knowledge Management and Specialized IS ........................................................................................... 8 System Acquisition and Development...................................................................................................... 9 SUMMARY ............................................................................................................................................. 10 REFERENCES ....................................................................................................................................... 12

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BACKGROUND OF WALMART INC. Wal-Mart, now known as Walmart Inc., founded by Sam Walton on 1962 in Rogers, Arkansas, with the help of his brother Bud. However, Sam is already running a store, Walton’s Five and Dime. The business model of Sam Wilton, compared to others, was different; it focused on providing discounts and putting up branches in some small towns in Arkansas (Muhammad Atif, 2013). In 1968 branches in Oklahoma and Missouri was built (Brenner, Eidlin, & Candaele, 2006, as cited in Muhammad Atif, 2013). Moreover, they’ve also introduced Sam’s Club that opened in Iowa, Nebraska, and Indiana in 1983.

Walmart Inc. is one largest multinational retailing corporation that operate on various segments; Walmart Inc. deals with an operation inside the United States, The Sam's Club, membership-only retail warehouse clubs, and Walmart International, that operates outside the US, such as Japan, United Kingdom, Argentina, Brazil, Chile, etc. (Jacques, P., Thomas, R., Foster, D., McCann, J., & Tunno, M., 2003, p. 515). It also provides different services such as, Walmart2-Walmart money transfer service, Walmart MoneyCard, Store Pickup, and Walmart Pay (Course Hero, 2013, pp. 2-3). On the other hand, Walmart has a division named Walmart Supercenter. This division provides its customers with a wide array of products and services, such as pet shops, pharmacies, optical centers, etc., that Walmart doesn't offer. Basically, Walmart Supercenter is a bigger Walmart store. The company implements the “Every Day Low Price” (EDLP) strategy to deviate from its competitors.

MISSION, VISSION, OBJECTIVES, AND GOALS

Mission Saving people money so that they can live better.

Vision To be the best retailer in the hearts and minds of consumers and employees.

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Objectives Sell more goods to American consumers who shop online (Ferguson, E., 2019). Provide the best quality goods with lowest price (Essays, UK., 2018). Walmart hopes to make progress in areas that are the basis of long-term growth and higher shareholder returns (Course Hero, 2017, p. 2).

Goals To bring Mr. Sam's culture and philosophy to the Internet (Walmart, n.d.). To support the dignity of workers in the retail value chain (Gading, D. K., 2019, p. 6). To bring together stakeholders, international organizations, governments, civil society, and industries, to address major potential risks (Gading, D. K., 2019, p. 6).

Slogan Save money. Live better.

INFORMATION SYSTEMS ECOSYSTEM

Database System, Data Center, and Business Intelligence

Walmart, the world’s biggest retailer with 20,000 stores in 28 countries, developed and build one of the world’s biggest private cloud, where, it could process more than 2.5 petabytes of data every hour (Bernard, 2017, as cited in Mohammed Kemal, 2019). It is in Bentonville, Arkansas and named Data Café, state-of-the-art analytics hub (Marr, B., 2017). Since, it caters many customers worldwide, and to ensure affordability of products they have developed their own cloud to help in analyzing customer, competition, and market data, also ensures the security of these data. Walmart has full control of their infrastructure they may, in their own discretion, implement appropriate security measures. Walmart’s transactional database in 2012, estimated, contained about 2.5 petabytes of customer data (Edosio, U. Z., 2014, p. 3).

Data Café helps in cutting down time data processing to 20 or 30 minutes from two or three weeks, when given large amount of clean and verified data. In article of Forbes by Bernard Marr (2017), the grocery team was puzzled and unsure why a product category declined, Data Café have Page | 4

showed that there had been pricing miscalculation at those products those were given a higher price than what it should be. On the other hand, during Halloween, two stores had a decline in sales on novelty cookies; Data Café was able to identify that the products were unable to be put on the shelves.

Telecommunication, the Internet, Intranets, and Extranets

According to Kaup Mohamed’s paper (2014), Walmart launched the world’s largest private integrated satellite communication network, provides a two-way voice and one-way video transmission from the headquarters to various Walmart stores. Its primary goal is to connect each Walmart stores through video and voice conferencing from the management. Furthermore, it allows the executives to have an update on their stores anytime, hence, improving the operation control and compliance to the company’s procedures (p. 73). This is one of the reason Walmart’s performance has improve significantly. If the management has any message to a store, they can effortlessly relay, instead of going to the physical geographic location that damages efficiency of work and management.

Walmart utilizes their satellite for downward, upward, and horizontal formal communication. Downward communication for the management and to provide information, goals, operational procedures, motivate employees, etc.; Upward communication, where employees provide their feedback on management, issues, etc.; Horizontal communication, on the other hand, allows each store to converse own improvements to other stores to drive Walmart ’s operation success.

Numerous companies today are aiming to be sustainable, environmental responsibility, as part of the corporate social responsibility (CSR). Walmart also aims to be sustainable, evident in their 2018 Global Responsibility Report. The irrigation system of the company is cloud-based to be able to monitor data movement and track real-time, and control watering instruction (Walmart, 2018, p. 87.). Moreover, the system provides weather-specific information to influence the watering instructions, rainy weather implies that turning on the irrigation system is unnecessary.

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Plant products needs to be watered continuously, however, a lot of waters are being wasted and at the same not all plants are watered.

According to Accenture (2013), “retailers are using cloud-based tools to engage customers,” because different companies implements strategies to increase their sales. Walmart in 2012 hosted a contest named Get on the Shelf, where every customer has the chance to pitch their own product invention (p. 18). The winners that was selected by the public, according to Walmart, will be invited to personally sell their products at their eCommerce website, Walmart.com. The latest contest happened in November 2013; the winning products are Elvis Presley Home Bedding Collection, bedding sets decorated with Elvis Presley, and SKRIBS Customizable Wristbands (Walmart, 2013).

Electronic and Mobile Commerce and Enterprise Systems

Utilizing the internal cloud network of Walmart, they have showed to grab a larger portion of online shopping. Furthermore, they are aiming to beat Amazon’s use of cloud-powered big data that drives digital sales (Mohammed Kemal, 2019).

Walmart has bought Jet.com, an online shopping site, to take a big step in competing against Amazon (Lunden, I., 2016). They are expanding their online shopping to various independent company to further widen their scope of customers.

Walmart Labs teamed up with Salsify to develop a product content management platform for their suppliers (Salsify, n.d., p. 3). Together, they have successful integrated it with Walmart’s API. The software allows suppliers to push their products online, then, those products, through the API, will uploaded to Walmart.com in seconds. They are empowering the suppliers to a more immersed role in merchandising their products to the market. Walmart knew that they could not rely on customers that buys item in the aisles of the store, moreover, these customers are owners of smartphones that could the experience shopping with their hands; hence, the company brought the convenience to its customers and to be at par with competitors.

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According to Thi Thu Ha, Nguyen (2017), the supply chain management (SCM) of Walmart is the key to its growth. They consider three factors: procurement and distribution, logistics, and inventory management. To continually offer low prices the company eliminated the middleman and directly transact with suppliers, including the procurement (p. 106). The logistics or the trucking system of Walmart is also known to be successful because it can delivery from inbound to outbound trailers without intermediate storage (p. 104). The private trucking system is able to deliver to stores and replenish stock inventory in a short amount of time, hence, reducing expenses (p. 107). The inventory management system of Walmart can detect products that are low in stocks and will notify the store and distribution center for replenishment (p. 108).

Information and Decision Support Systems More companies are giving back and helping the people and the community. Similarly, Walmart is giving to the local communities by donating goods to various charities. Moreover, Global Governance Digital Solutions developed Global Donation Management System (GDMS) that scans and validates products to be donated and verifies if it complies with the policies (Walmart, 2018, p. 205).

Furthermore, Walmart also launched an initiative for identifying harmful chemicals, namely Chemical Intensive Product Initiative, integrated to some products. They have partnered with The WERCS to develop a software that screens chemicals and was named GreenWERCS Chemical Screening Tool. Current and future suppliers of Walmart must submit the added chemical ingredients in the products, the system would then now analyze and identify the harmful chemicals. It produces a score, red, yellow, and green, for the supplier to identify on whether the product is free from harmful chemicals and materials, moreover, the tool provides alternative ingredients that would be environmentally friendly (Torrie, Y., Buczek, M., Morose, G., & Tickner, J., 2009, 29-30). This assures the products are eco-friendly and encourages the suppliers to produce sustainable products.

A social media start-up focused on e-commerce named Kosmix, currently known as Walmart Labs, was bought in 2011 by Walmart. Kosmix have developed a system that can search Page | 7

and analyze social media platforms, such as Facebook, twitter, etc., to obtain personal and personto-person-based insights (Edosio, U. Z., 2014, p. 5).

Walmart, through Walmart Labs, was able to develop Social Genome (Edosio, U. Z., 2014, p. 5). The software was publicly referred to as Walmart Shopycat where it collects data, real-time, from social media sites. Walmart Shopycat performs semantic analysis, capable of analyzing phrases, words, sentences, and paragraphs with independent meanings, and is able to understand the trends and popular products; furthermore, it can predict trends in certain location of Walmart store (Edosio, U. Z., 2014, p. 6). Walmart as marketed it as a gift finder solution.

Walmart has implemented Retail Link, a strategic decision support system. The system uses the satellite technologies of Walmart where many have tried to mimic but failed. It gathers sales data from many stores and then processes into insightful reports that are distributed to suppliers. Retail Link causes few inventories on stores; however, focuses on products that would sell, and would replenish the stock at the right time and place (Garcia, F., n.d. p. 16).

Knowledge Management and Specialized IS

The company values the promotion of food safety to their associates to further server the customer well. Walmart uses a combination of web-based and computer-based learning; implemented on teaching food handling. The industry has recognized the company’s use of 3D animated technology to teach. Preparation of chicken rotisserie was thought using the 3D technology (Walmart, 2018, p. 151).

Walmart integrates RFID tags to their products and their systems that improves management of inventory, such as products sold and stock replenishments. Moreover, it helps on identifying the exact location and number of products without manually looking for the product and counting them. Moreover, it can contain the manufacturing date, expiration date, etc. Walmart decided to user RFID tags because it can store more data than the usual barcodes (Thi Thu Ha, Nguyen, 2017, pp. 107-108). This contributes to the efficiency and reduction of time needed to the management of products. Page | 8

Walmart has also used a knowledge management system, it incorporates knowledges, such as discussion forums, corporate libraries, mentoring program, and professional training. The KMS has also help Walmart cut operational cost and has allowed the growth of value for the shareholders. It made big financial gains on annual products in Walmart stores. Furthermore, skills of employees are enhanced through the various knowledges that can be queried in the KMS. The human resource management of Walmart has learned to properly lead the people and business operations in a well-planned framework or guidelines. On the other hand, the managers have discovered to tackle issues with staffs without receiving grievances from them. Managers have learned it from the shared knowledge. Walmart is aiming the employee retention until retirement by providing rewards and bonuses, and performance appraisal (Knowledge Management-A Case Study of Walmart, 2014, pp. 1-3).

Walmart Neighborhood Market, located in Levittown, New York has transformed. Walmart has been integrating artificial intelligence to its retail experience. A unique real-world experience in shopping of Walmart is named Intelligent Retail Lab (IRL). The store is installed with cameras and sensors that detects product movement and current stock in aisle (Smith, M., 2019). Various touch screen devices, Informational Stations are installed to help customers. Moreover, it houses processors, that retailers can see through glass window, that could process at high rate and produces 1.6 terabytes of data. Meat products’ standby time in the aisle is recorded to ensure quality, moreover, once a movement of product going out of the shelves is detected the sensors and cameras are triggered, notifying staffs to restock if needed.

System Acquisition and Development

Walmart partners with different organization for certain software. Walmart tapped IBM for caching service, so that subset of data so that future request will be much faster. The developers of Walmart needed caching solution for new features into their systems. Session information from the server farm of Walmart are required to be stored and retrieved (Foley, J., et. al, 2016, p. 8).

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To give back the people and communities Walmart implemented the software Global Donation Management System (GDMS) of the Global Governance Digital Solutions (Walmart, 2018, p. 205).

Walmart labs has used agile development lifecycle in developing their software. The lab had formed 130 teams to build software guided by the agile development (King, R., 2014). Walmart is adapting this development lifecycle because of the focus of the agile approach. They can develop software faster; there would be feature updates that are based on feedback from its users. The team will be able to push changes with a rational reason and not making assumptions of user needs. According to Mark Tallman (as cited in King, R., 2014), he stated that agile approach is just one tool, it is not always applicable to development, such as building data centers.

Expo, an in-house platform to test development and setup was developed by teams in Walmart Labs. Walmart was able to customize the program to satisfy its needs in testing their developments (Tang, A., 2018). The testing method they used is called A/B testing, they have integrated it with their software development life cycle. A/B testing, according to Optimizely, is creating variations of UI and UX of a webpage or an application, they now deploy the variations and would be used by their customers and clients. Engagement with each variation is measured and recorded and displayed in a dashboard.

SUMMARY Walmart’s mission and vision, to provide consumers with quality products that are economical and to make a lasting impression has been made successful through the use if different information systems. Prominent technology that Walmart have used are their SCM, where their delivery, stocking and inventory are managed well by their employees, Data Café, a data analytics hub in their large dat...