Wal-Mart's future success depended, in part, upon CIO Rollin Ford and his department's ability to deliver the applications and systems that the giant needs to compete today—just as it did a decade or two ago.

Paula Rosenblum, an analyst at Retail Systems Research (RSR), said in the article that although the current IT regime didn't directly contributed to Wal-Mart's troubles, "it is fair to say they didn't anticipate the shift [in retailing]. And they didn't realize that [retail software] and hardware had matured enough to where it could support them."

By mid-2007, Wal-Mart had announced that it had implemented or was in the process of installing applications it previously seemed unwilling to use, the article noted. Wal-Mart bought Oracle's retail price-optimization application and HP's Neoview data warehousing platform to crunch the data Wal-Mart collects in its 4,000 U.S. stores. Rosenblum noted that HP's Neoview tool could provide business intelligence (BI) data derived from all types of customer purchasing information, which in turn can help Wal-Mart stock its stores based on what sells locally—a competitive differentiator for any retailer today. And Oracle's application could help Wal-Mart to move merchandise faster by knowing when to discount the prices on slow-selling items.

Combined, these two tools could offer new and powerful decision-making capabilities for Wal-Mart's merchandising managers.

The Price Is Just Right

In announcing Wal-Mart's fourth-quarter financials, CEO Scott attributed the "strong results" to its "price leadership strategy." That strategy was another way of saying Wal-Mart had returned to its everyday-low-prices roots, which it had moved away from in 2006. Its forays into selling cheap but trendy clothes and home goods backfired with its consumers, a CNBC article noted. So in 2007, Wal-Mart "cleared out the poor selling merchandise and then cut prices earlier than ever for the holiday season, hoping to win back sales from its lower-income shoppers," according to the article.

In a report on Wal-Mart's fourth-quarter news, Deborah Weinswig, a retailing analyst at Citi Investment Research, noted that the "main driver of the improved inventory levels was management's focus on moving inventory through markdowns in 2Q07 and 3Q07, followed by tight inventory management by operations and merchandising." It appeared that the new retail applications were, at the very least, in use.

To RSR's Rosenblum, Wal-Mart's uplifting financial results are attributable to a combination of those IT improvements and a bit of luck. It's likely that Oracle's application, which can guide retailers on marking down merchandise, helped Wal-Mart get "out of a bad situation faster," she says. "IT got them out of a place they didn't belong and did it pretty cleanly, but the company still has work to do on localizing assortments. I think it will take a while for the technology initiatives to take hold."