Walmart: Implementation of Business Information Systems Report

This report provides a detailed analysis of Walmart's implementation of business information systems and how these systems have contributed to the company's tremendous growth. The report focuses on Walmart's strategic use of supply chain management, highlighting the company's adoption of Electronic Data Interchange (EDI) and its focus on customer and supplier intimacy. It examines the company's improved decision-making processes, including the use of business intelligence tools and big data analytics to optimize operations, predict customer behavior, and gain a competitive edge. The report also explores the various business intelligence tools used by Walmart, such as Hadoop and NOSQL, and their impact on areas like merchandising, fraud prevention, and targeted marketing. The analysis includes the impact of Walmart's strategies on key areas like customer buying trends, customized products and overall efficiency, concluding with a summary of the company's success in using information systems to achieve its strategic business objectives.

Running head: MANAGING INFORMATION SYSTEMS
MANAGING INFORMATION SYSTEMS
Name of the Student:
Name of the University:
Author Note:

1MANAGING INFORMATION SYSTEMS
Executive Summary
The report summarizes the growth of Walmart using business information systems that has
led to the tremendous growth of the company over the last decade. The report states that the
areas of great improvement seen in Walmart are supplier and customer intimacy using a
greatly developed supply chain management system and the decision making system. The
report illustrated the use of business intelligence tools in Walmart and how the company
analysed huge amounts of data to their advantage. The report also details the decision making
system of Walmart highlighting the key areas where the company made massive
improvements. The report also demonstrates the use of business intelligence tools in
improving prediction analysis and gaining an edge over its competitors. The report concludes
with a summary of the report.

2MANAGING INFORMATION SYSTEMS
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Customer and supplier intimacy.............................................................................................3
Improved decision making.....................................................................................................4
Business Intelligence tools used by Walmart.........................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................9

3MANAGING INFORMATION SYSTEMS
Introduction
Walmart is one of the biggest retail organisations in the world. It is an American
multinational retail corporation that mainly deals in operating massive supermarkets grocery
stores and departmental store chains around the world. The company was founded in 1962 by
Sam Walton. The multinational organisation operates more than 11,500 stores under 65
different brands in 28 countries. Walmart employs more than 2 million associates worldwide.
In this report, the use of management information system in Walmart will be discussed. The
report will focus on the supplier chain management (Lu, 2019) and the improved decision
making gained by Walmart with the help of management information system.
In this report, the use of business intelligence tools to make better business decisions
and improve the overall supplier chain management system of Walmart has been discussed.
The report discusses the major tools used by Walmart and the major impact or benefits of
these tools on that organisation. The Walmart organisation has the world’s largest supply
chain system with around 60000 suppliers globally. The company also make full use of the
information technology to gain advantage over its competitors. The company owns around
5500 stores in the United States and has another 5000 stores globally. The company wants to
expand their business with the help of information systems.
Discussion
In the 1980s, the Walmart Company started using collaborative commerce with the
help of an Electronic Data Interchange (EDI) based on supply chain management (Ayers and
Odegaard, 2017). This required the mega suppliers to use Walmart’s EDI for responding to
Walmart’s orders. The Walmart is known for maintaining close relations with both its
suppliers as well as customers. This has been achieved over years of work building
relationships between clients and suppliers using the business intelligence tools. The
following sections will highlight on the customer and supplier intimacy of Walmart.
Customer and supplier intimacy
This has been achieved by Walmart quite efficiently and they have set an example out of
it. The company is famous for its supply chain strategy. They were among the first companies
to use the concept of supply chain management even before the term existed. Walmart
deployed 6500 trucks which allowed them to collect the goods from the suppliers instead of

4MANAGING INFORMATION SYSTEMS
the suppliers supplying them. The supplier metrics is managed by Walmart by following
these steps (Krunchbox.com, 2019):
1. They first identify the given metrics, targets and thresholds.
2. The company then collects the data related to the various mechanisms.
3. Collects the information and analyses it.
4. The company then identifies the gaps and prioritizes communication.
5. The company then implements tracking continuously.
Walmart differs from normal retailers as they do quality check for their suppliers and
explaining them what is expected from them. The suppliers are encouraged to ask the
company if they encounter any problem. The suppliers are given access to the ways Walmart
uses to measure profits while the buyers or customers get to compare suppliers by analysing
supplier trends. Walmart slowly developed the relationship between its suppliers and itself by
offering them more transparency in the work process and market trends. This helped the
supplier understand buyer trends and avoid sudden dip in performance. The company also
conducted webinar and workshops for its suppliers to train them about the key factor that
impacts on the result. The analysis of customer buying trends using the business intelligence
tools helped Walmart to design an algorithm to predict customer behaviour and increase sales
(Gobble 2015). The company also increases its intimacy with the customers by creating
customised products for them. Walmart’s supply chain is so effective that they reduced their
distribution cost to just a mere 1.7% of its total cost sales. This made Walmart’s supply chain
management system using their own Vendor Managed Inventory (VMI), the best supply
chain management globally.
Improved decision making
The company Walmart’s operations management includes different approaches that
are focused on handling the supply chain and inventory and the sales performance. The
company’s huge success is partly due to its very effective performance in operations
management (Bharadwaj 2018). The Walmart’s management has control over all the major
decision areas of the operations management. The majority of these decisions are related to
the concerns and issues that the managers of the company face daily. The company’s
decisions related to operations management mirrors the prioritization of the business
objectives of the manager. This prioritization helps in revealing the significance of such
business decisions on operations management in Walmart’s business (Mazouni 2018).

5MANAGING INFORMATION SYSTEMS
The aspect of decision making is one of the most important things in an organisation
(Power and Mitra, 2016). Decisions can be made either considering for months after
analysing all aspects or it could be made in a second without giving any thought. Decisions
can be taken at all levels from single individuals to big consultation meeting with multiple
members of the company. Generally the major decisions taken by a company depends upon
the top people of the company hierarchy but is also taken by teams as they are an equally
important part of the system. The five major decisions taken by Walmart to improve their
productivity and revenue are given below (Panmore Institute, 2019):
1. Design of goods and services: This decision area covers the decisions regarding
services and goods offered by Walmart. The company made very good decisions here
as it managed to reduce the overall price of the goods it sold. The company to
increase productivity tries to get the maximum efficiency of its retail workers. The
key decisions in this field are increased worker efficiency and low production costs.
One big example is that the company’s goods are produced in such a way so that they
can be mass produced easily.
2. Quality management: This decision area is covered by the three levels of quality
checks implemented at Walmart. The lower level is composed of the basic minimum
quality standard expected by the customers. The minimum cost great value products
of Walmart fall under this tier. The middle tier consists of mediocre quality goods and
the upper tier is composed of goods which are far better than the market average
quality. The middle tier measures the performance of Walmart sale employees. The
top tier is used by a fraction of Walmart’s customers. These decisions help Walmart
maintain its quality.
3. Process and capacity design: This decision area is addressed by Walmart using
forecasting, continuous monitoring and behavioural analysis. The company monitors
the behaviour of the customers and employees in stores to take informed decisions
regarding the current market trends. The firm is continuously improving their existing
human resource structures with the help of forecasting. Continuous monitoring of the
company’s store capacities also helps the managers take decision regarding the
modifications of existing design processes.
4. Location strategy: This decision area focusses on the movement of materials,
business information and human resources of the organisation. The company wants to
use the location of its stores to its full advantage by opening stores in urban or near

6MANAGING INFORMATION SYSTEMS
urban places to increase their reach. The location of setting up a new warehouse is
also decided based on strategic market locations. The business information system or
tools play a major role in monitoring and deciding these locations.
5. Maintenance: The maintenance needs of the company is checked and decided by the
appointed managers considering all the different types of resources. This area of
decision making is improved by Walmart by organising various training programs to
keep up the dedicated employees employed for facility management and equipment
management as well to maintain the human resource department. These training
programs are designed to make sure that the trained employees of Walmart are
efficient and effective. The combinations of all these different maintenance
department together helps in adding up to the Walmart’s effectiveness in meeting
concerns in this decision area.
Business Intelligence tools used by Walmart
The use of business intelligence by Walmart increased in the last decade or so. The
company collects over 2.5 petabytes of unstructured data from around 1 million customers
per hour (DeZyre, 2019). These data collected can be used effectively to make effective
business decisions. The company utilised this data with the help of big data and got
successful. Walmart started using big data even before this term was popular in the industry.
The company utilised the big data analytics to provide the customers with the best e
commerce technologies to deliver a top class customer experience. The main aim of using
big data at Walmart is to better the shopping experience of the customers when they are
buying at a Walmart store or browsing the Walmart website (Faulds et al. 2018). The
company utilised the big data to its advantage by developing customised websites for unique
customer experience and building innovative software to streamline the purchasing
experience of the customers. These all was done while increasing the logic efficiency. The
Hadoop and NOSQL was mainly used by the company during those time.
The company also purchased a big data and business intelligence based start-up called
Inkiru to increase its big data capabilities (DeZyre, 2019). The start-up helped Walmart in
improving its merchandising, fraud prevention and targeted marketing. The predictive
analysis used by Inkiru makes use of both big data and machine learning concepts to predict
accurately. Walmart has a massive customer base which generates an even bigger amount of
data. The analysis wing at Walmart analyses around 100 million keywords entered in its
website on a daily basis in order to optimize the system and predict the type of products

7MANAGING INFORMATION SYSTEMS
customers like. This creates a unique purchasing and browsing experience for each and every
customer (Strategy 2015). The big data solutions are used to develop the global websites at
Walmart. Walmart has completely changed decision making with a reported increase of 10%
to 15% in its online sales. These changes improved the sales of the company tremendously.
The first applications to use the Hadoop (Kasemsap 2018) data at Walmart were the
savings catcher and eReceipts. The savings catcher is an application that notifies the
customers of price drops in market and the eReceipts software helped customer provided with
auto generated electronic receipts. To tackle issues like scalability and performance,
Walmart designed Mudpd8 for its fast data. This application helps the streamlined
applications and increases the quality of the data generated. This application helped the
company analyse data from social network data in order to predict the trends in the
marketplace. Walmart also expertise in the use of data mining in order to find patterns in their
sales information.
The company uses data mining to find patterns and recommend different products to
customers which can be purchased on combination to other products a customer purchases.
Walmart monitors, tracks and targets each and every customer separately. The company uses
business intelligence tools to gather resources on customer purchases, their location or
address and the products they look for on the internet (Kumar and Babu, 2019). So overall
Walmart uses the business intelligence tools to launch new products that they think will be
successful in the market. They also use BI to provide better predictive analysis of purchases
and shipping costs in order to provide the best price in the market. The company finally uses
data analytics to predict customer behaviour and create tailor made recommendations for
them. Together all these tools and methods have helped Walmart tremendously and made
them the top leaders of their segment.
Conclusion
To conclude, the company Walmart has gained a tremendous advantage over its
competitors by the use of business information systems and intelligence tools to optimize and
streamline their processes. The company made massive improvements to their existing
process of supply chain management and business decision making. The report states about

8MANAGING INFORMATION SYSTEMS
the customer and supplier intimacy and how it is achieved by Walmart. The report also
illustrates the improved decision making achieved by Walmart, their methods and the fields
they applied it. The report describes each of these areas in detail and mentions the advantage
gained by Walmart with improved decision making on those fields. The report also
demonstrates the use of business intelligence tools by Walmart to optimize their business
processes. To conclude the report describes the tools used by Walmart to improve its
customer purchasing experience, better trend prediction and reduction in company costs.

9MANAGING INFORMATION SYSTEMS
References
Bharadwaj, N., 2018. Strategic Decision Making in an Information-Rich Environment: A
Synthesis and an Organizing Framework for Innovation Research. In Innovation and
Strategy (pp. 3-30). Emerald Publishing Limited.
DeZyre. (2019). How Big Data Analysis helped increase Walmarts Sales turnover?. [online]
Availableat:https://www.dezyre.com/article/how-big-data-analysis-helped-increase-walmarts-
sales-turnover/109 [Accessed 7 May 2019].
Faulds, D.J., Mangold, W.G., Raju, P.S. and Valsalan, S., 2018. The mobile shopping
revolution: Redefining the consumer decision process. Business Horizons, 61(2), pp.323-338.
Gamal (2019). Customer relationship management "wall mart". [online] Slideshare.net.
Available at: https://www.slideshare.net/osamagda/customer-relationship-management-wall-
mart [Accessed 8 May 2019].
Gobble, M.M., 2015. Managing Customers. Research-Technology Management, 58(5),
pp.64-67.
He, W., Wang, F.K. and Akula, V., 2017. Managing extracted knowledge from big social
media data for business decision making. Journal of Knowledge Management, 21(2), pp.275-
294.
Hill, E. and Fredendall, L.D., 2016. Introduction... Supply Chain Management Evolution
Power of Supply Chain Management What Is New about Supply Chain Management?
Collaborative Planning How to Implement Supply Chain Management Examining the Basics
of Supply Chain Management. In Basics of Supply Chain Management (pp. 23-32). CRC
Press.
Kasemsap, K., 2018. Multifaceted Applications of Data Mining, Business Intelligence, and
Knowledge Management. In Intelligent Systems: Concepts, Methodologies, Tools, and
Applications (pp. 810-825). IGI Global.
Krunchbox.com. (2019). krunchbox | How Walmart Collaborates With Its Vendors. [online]
Available at: https://www.krunchbox.com/how-walmart-collaborates-with-its-vendors
[Accessed 8 May 2019].

10MANAGING INFORMATION SYSTEMS
Kumar, C.P. and Babu, L.D., 2019. Review on Big Data and Its Impact on Business
Intelligence. In Information Systems Design and Intelligent Applications (pp. 93-109).
Springer, Singapore.
Lu, C. (2019). Walmart's successful supply chain management. [online] Tradegecko.com.
Available at: https://www.tradegecko.com/blog/incredibly-successful-supply-chain-
management-walmart [Accessed 8 May 2019].
Mazouni, M., 2018. The Effect of Global Investment Decisions and Financial Risk on
Multinational Corporations: Walmart Corporation Case Study. Available at SSRN 3257136.
Mujtaba, B.G. and Johnson, W.C., 2016. Creating an Organizational Culture of Delightful
Customer Intimacy at Publix Super Markets, Inc. International Journal of Marketing
Practices, 3(2), pp.47-67.
Panmore Institute. (2019). Walmart: Operations Management 10 Decisions, Productivity -
Panmore Institute. [online] Available at: http://panmore.com/walmart-operations-
management-10-decisions-areas-productivity-case-study-analysis [Accessed 7 May 2019].
Power, D.J. and Mitra, A., 2016. Reducing'Bad'Strategic Business Decisions. Drake
Management Review, 5(1/2), pp.15-21.
Simpson, D. and Power, D., 2016. Aligning Goals and outcomes in sustainable supply chain
management. In Sustainable Value Chain Management (pp. 161-172). Routledge.