Information system can be defined as a comprising technology used by people, and processes being supported by the technology. Wal-Mart has a centralized information system run worldwide from its Arkansas headquarters. The first major advantage of the Wal-Mart’s centralized information system is that transferring employees from one store to another is quite easy. There is less downtime and startup time because the system is similar to the platform.
Wal-Mart was driven to the centralized information system mostly to reduce operating costs and streamline business processes across the board. By not having to purchase and use multiple systems, Wal-Mart just duplicates the system they have in new stores. In the case of mergers and acquisitions, it integrates the previously used system into the Wal-Mart system. Their motto is to eliminate all processes that are expendable in the system and make it as user-friendly as possible whilst at the same time ensuring that the system as a whole retains its integrity and is not easy to infiltrate.
The centralized information system at Wal-Mart is used primarily in the management of inventory, administrative functions, customer relations as well as supplier relations. These four areas are the backbone of the Wal-Mart supply-chain management, and they keep the company running. During the development of any centralized information system, Wal-Mart makes sure that the IT personnel are merchants and technologists. Therefore, this has really changed the way the IT staff see the systems they are developing, because they have to first test them in the business environment themselves.
One downside of the centralized information system is that in case of an event like 9/11, the system can be hit hard and cause a lot of outages. The best practice here is to make sure that each store can operate independently.