According to Wal-Mart IT executives, the company is adopting expensive technologies. that is why its investment in IT is considered to be their single largest capital expenses with approximately $500 million dollars over one five year period (Beard, 1996, p.78). The company demonstrated its preparedness to invest heavily in these technologies because it strongly believes that IT is a powerful tool in achieving efficiency goals and in creating economic value for stakeholders. In order for Wal-Mart to know how these technologies will support the business in obtaining implicit and explicit objectives, it must develop IT governance strategies (Schwalbe, 2009, p.136). To provide a competitive advantage, these strategies must be integrated and aligned with the company’s strategic and operational plans, this is to make the process more comprehensive (Papp, 2004, p.27).
Linda Dillman, the Chief Information Officer (CIO) of Wal-Mart noted that “We do not want to be known by our technology, but we do want to be known by what our technology has done for the business” (cited in Luftman, 2004, p.275). She also added that the business is performing favorably in terms of improved revenue and market share, cost and time reduction, customer satisfaction, and many more because of business-IT alignment maturity through metrics performance. “Wal-Mart was one of the first companies to introduce computers to track store sales and inventory and was the first to develop a computerized network to share this information with suppliers” (Fottler &. Malvey, 2007, p.267). However, because IT changes daily and becomes outmoded, the company needs to continuously seek for upgraded technologies (Eisenberg et al., 2004, p.265).
The information technology/system of Wal-Mart is classified as strategic and focused on how to meet customers’ needs wherein it relies on most current information to sustain the minimum cutting of cost in retail. In order for Wal-Mart to lower their costs, maximize return on capital.