|Information Week has selected Wal-Mart's IT staff as its business-technology team of the year.|
Team Of The Year
At Wal-Mart, business technology is a team effort--the retailer's far-reaching RFID project would be impossible to achieve if it weren't. This year, InformationWeek recognizes CIO Linda Dillman and her IT staff--some 2,400 strong--as our business-technology team of the year.
By Laurie Sullivan, InformationWeek
Dec. 13, 2004
Wal-Mart Stores Inc.'s I.T. team is just a couple of weeks away from the first wave of suppliers participating in its ambitious radio-frequency identification project. When RFID-tagged pallets and cases begin moving en masse into three distribution centers in Texas, and data begins to flow from them into Wal-Mart's Web-based supplier-collaboration system, it will be the start of a revolution in supply-chain management.
Executive VP and CIO Linda Dillman and some 2,400 people who make up Wal-Mart's Information Systems Division can take credit for leading the charge that already has expanded far beyond the retailer's four walls. A couple of years ago, Wal-Mart was involved with MIT's Auto-ID Center doing field studies on RFID. It was perfect research work, but too fragmented an effort to drive industrywide adoption, Dillman says. "You couldn't try RFID in all the scenarios," she says. So Wal-Mart picked one approach--tagging cases and pallets--and issued an edict to have its top 100 suppliers focus on that for a January 2005 deployment, in the process driving commitment from some major, but hesitant, tech vendors. "That was critical to make the technology work," Dillman says.
Within Wal-Mart, a team of four RFID pioneers (later expanded to eight people) headed by Simon Langford, manager of global RFID strategy, did a lot of the heavy lifting. But both Dillman and Langford point out that the project was possible only because of the support of Wal-Mart's entire Information Systems Division. "There's no sense of pride to solve something yourself," says Dillman, a 12-year Wal-Mart veteran who joined the retailer when it acquired the Wholesale Club in Indianapolis, Ind., where she had been a senior systems analyst. "There is strength in numbers, in reaching out to others."
In the last year, collaboration in the division has fueled some 2,500 projects, from the RFID deployment to rolling out global financial systems that make it easier for stores to more quickly close their books each month, as well as adding features to point-of-sale systems that help Wal-Mart's approximately 1,360 discount stores, 76 Neighborhood Markets, 1,062 Supercenters, and 550 Sam's Clubs nationwide comply with local labor laws.
Indeed, collaboration is critical for speed, efficiency, and innovation. The company has more than $250 billion in yearly revenue and a below-the-industry-average IT budget, relies on homegrown software to run its business, eschews outsourcing, and requires systems to be available for global use. "The [application] development isn't successful if the infrastructure team that builds the physical system isn't successful," says Dillman, 48, whose career at the retailer included manager, director, and VP positions in application development before she became VP of international systems. "The infrastructure team isn't successful if the operations team doesn't know how to measure the system. They all are measured in their success based on the final impact to the business." That shouldn't be a surprise, given that the Wal-Mart culture is to consider every employee a merchant first, and each one's goal is to serve the customer.
Dillman objects to being the star behind any of Wal-mart's IT productions, including the RFID drama. For one thing, the first push for using RFID in the supply chain came from Thomas Coughlin, now vice chairman of the board of directors, she says. The result of the combined efforts of many people within Wal-Mart is that retailers Best Buy, Target, and others, as well as the Department of Defense and the pharmaceutical industry, have begun RFID initiatives; the travel industry, health care, and other government agencies are interested in what RFID can do for them; and leading vendors are shipping in volume RFID tags and software that supports the technology.
But Dillman certainly has played an important role since March 2003, when she stepped on stage at the Retail Systems show in Chicago to unveil Wal-Mart's plan. She's been out in front collaborating with her competitors to make sure that the industry's efforts succeed, has been involved in helping to clear up confusion about RFID's costs and benefits, has worked with suppliers to overcome their initial skepticism, and helped drive the adoption of EPCglobal standards (see "Wal-Mart's Way," Sept. 27, p. 36). "RFID needs quiet persuaders," says Kevin Ashton, co-founder of the Auto-ID Center and VP of marketing at ThingMagic LLC, an RFID-reader manufacturer. When Dillman said Wal-Mart wanted to use RFID in its supply chain, "no one actually laughed at the idea, but there was tremendous skepticism, ... and a hangover period where skeptics huddled in corners explaining to each other why she would have to back down and why it couldn't happen in that time frame. And here we are now; it's pretty much happening."
As Wal-Mart moves forward with its RFID effort and other projects, collaboration is getting even more fine-tuned, the result of a project launched midyear to analyze IT system development and spread best practices through the company. All of Wal-Mart's IT directors donated a staff member to the seven-month effort, and the group is building tools that incorporate this project-development knowledge, including testing environments and tracking systems. "We do a great job at looking at the processes and building the tools to make our internal customers more efficient, but we've never stepped back to examine what tools we should develop to make the IT group more efficient," Dillman says.
Perhaps, but Wal-Mart has the kind of reputation in the IT community that some CIOs can only dream of. Every week, 300 to 400 resumés come in from hopeful IT graduates or professionals, and turnover is just 5%.
"The fun part about working with Wal-Mart [Information Systems Division] is we're treated as business enablers, not computer nerds," says Dan Phillips, VP of operations, data warehousing, databases, large systems, and communications, who was Dillman's first manager at Wal-Mart. "I've worked at companies where you in IS are looked upon as a necessary evil or drain on expenses." Under Dillman's guidance, the division is viewed as just the opposite. "She approaches everything that you bring her as it is today on paper, but also looks at it with a new set of eyes--are there ways to make it better?" says Mark Porter, director of information security. "She's a businessperson first. And that's what I think is the best thing."
In 2005, Wal-Mart's U.S. IT staff is expected to grow between 5% and 6%, and creativity is a core requirement for those who make the cut. Some of that creativity comes out in the company's annual VPI (Volume Producing Item) contest, where various teams within Wal-Mart each pick a product and compete to promote its sales. The totals are tallied in December, and this year, the Information Systems Division has two products in the top 10; for 2005's contest, Dillman is considering choosing Wal-Mart's private-label Great Value powered-drink mix. Some of the division's secrets for boosting its picks: programming messages promoting the items at price scanners located throughout stores and at the bottom of register receipts. "It's part of the way I can prove our technology works," says Dillman, whose likeness in a cardboard figure at retail stores is promoting a contest pick--in her case, Members Mart Detergent at Sam's Clubs.
Typically, the best project leaders get promoted to managers, and Dillman's goal is to foster within those ranks "executives who manage people who manage projects." So Dillman has implemented twice-weekly team-building meetings for her division's senior executives and directors, to promote the idea that "a constant sense of accomplishment means multiple people collaborating in the project from start to finish." Dillman also has added to Wal-Mart's training opportunities a project-management course she believes could generate significant payback by improving developer productivity.
"Under Linda, there's really been a focus on our people, making sure programs are in place that everyone can build a career," says Sam Moses, strategy manager, merchandising systems. Dillman's father, Leonard Wayne Dillman, a U.S. Postal Service letter carrier for 35 years, had a big influence on her in this area. "He did things for other people for no reason other than it was the correct thing to do," she says. "It was a great role model in understanding what real success looks like."
Howard Stockdale, CIO at Beaver Street Fisheries Inc., a Wal-Mart supplier for more than 15 years, appreciates Dillman as a "people person" and someone who also has a profound vision for technology. When Stockdale approached Dillman about joining Wal-Mart's RFID initiative this year instead of waiting until 2006, Wal-Mart "rolled out the red carpet for us and made us feel as important as a top 100 supplier," he says. Dillman's concern extends to the next generation of IT talent, as well. Along with Kay Palmer, CIO and executive VP at trucking company J.B. Hunt Transport Inc., and Jeri Dunn, CIO at Tyson Foods Inc., Dillman last year established the Northwest Arkansas chapter for the Network of Executive Women, whose goal is to help women advance in management positions, especially in the IT field, where there's declining interest. Women made up 22% of those majoring in computer science in the United States last year, compared with 37% in 1983, according to University of Arkansas statistics.
In addition to continuing to work on people development, Dillman has on tap for 2005 plans to gain more efficiencies in Wal-Mart's collaborative inventory-management systems to improve in-stock items and forecasting, and to deliver technology to improve in-store processes. For instance, lines could be shortened if cashiers are scheduled and lanes are open to handle grocery sales at peak shopping hours. "What are the things we can we do to make it easier for customers to shop and to be more efficient when they come in the store? And once they're done, what can we do to get them through the checkout faster?" she says.
The full plan for 2005 is still a work in progress, but Dillman is clear that not even one project would happen if it weren't for the team at her back. "There's such an overwhelming sense when I receive recognition because it's really about the team," Dillman says. "There's so little that I do; there's so much the team delivers."