552 Making Key Strategic Decisions
When all programming was controlled by a small professional group, con-
trol was much easier. Because today’s spreadsheet programs are user friendly,
however, and software does not require programming knowledge, everybody is
his or her own programmer. Thus, it is difficult to control the consistency of
the information that is being distributed.
The problems only become more complicated. Now companies allow their
business partners, vendors, and even outsiders to access their computers, using
the Internet and EDI. Data is interchanged and moneys are exchanged elec-
tronically often without paper backup. While technology can prevent most
unauthorized access to data, as recent history has shown, even the U.S. De-
fense Department has not successfully prevented the best hackers from ac-
cessing its computers and wreaking havoc. What was relatively simple to
control before 1990 is now a nightmare. Accountants, systems professionals,
and auditors must remain forever vigilant against both inadvertent and inten-
tional unauthorized use and abuse of company data.
INFORMATION TECHNOLOGY STRATEGY
How do companies decide how to invest their IT money? What projects get
funded? Which projects are of higher priority? IT strategy is not created in a
vacuum. Rather, like all of the other operational departments within a corpo-
ration, IT must support the direction and goals of the company. The Chief In-
formation Officer ’s job is to educate the rest of senior management about IT’s
ability to create opportunities for the company and help it move in directions
that make sense.
IT architecture is developed to support the IT and corporate strategy. If
additional networks, workstations, or data warehouses are required, they are
either acquired or developed.
In the late 1980s and early 1990s, Wal-Mart adopted an everyday low
pricing strategy. To accomplish this goal, Wal-Mart needed to change the man-
ner in which it both conducted business with its suppliers and managed the in-
bound logistics, warehousing, and distribution of merchandise to its stores. It
needed to abolish warehousing as much as possible and quicken the process by
which stores ordered and received merchandise. Also, Wal-Mart needed to
eliminate any unnecessary inventory in stores and allow stores to order mer-
chandise only as needed. Lastly, lags in its distribution centers needed to be
prevented, enabling goods to be received from their suppliers and immediately
shipped to stores.
As a result, Wal-Mart designed a systems and technology infrastructure
that, through EDI, enables the stores to order goods, as needed, from their
suppliers. Moreover, Wal-Mart permits manufacturers to access computer-
ized sales information directly from its computers, which, in turn, allows them
to gauge Wal-Mart’s demand and then stage production to match it. Wal-Mart
effectively shifted the burden of warehousing merchandise from its own