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Consultants urge Wal-Mart to regress

Wal-Mart not customize? It's like telling fish not to swim.

Wal-Mart has stumbled a bit of late, losing its technology-driven lead over competitors and causing some, like Nick Carr, to suggest that Wal-Mart is a prime example of why IT really doesn't matter. Suddenly, consultants are being heard who suggest that Wal-Mart reverse its technology direction to buy off-the-shelf proprietary systems:

...[A]nalysts say that Wal-Mart's reliance on homegrown IT systems - and its conviction of their superiority - needs to change. Ford and his team, they say, must bring in best-of-breed commercial applications, such as BI and price-optimization tools, that can help it compete with rising retail superstars such as Target, JCPenney and Tesco. "We cannot overestimate how much packaged software can help them right now," says Paula Rosenblum, an analyst and managing partner with Retail Systems Research.

In fact, they can. The only thing that proprietary software gives Wal-Mart is bloat for these overpaid consultants to trim away for them. There is no off-the-shelf software that Wal-Mart can buy and use without extreme customization. Absolutely none.

More poignantly, though, is how such consultants (and Carr cheering them on) can suggest that the very thing that is absolutely differentiating for the world's most innovative companies - Amazon, Google, eBay, etc. - can't help Wal-Mart, too? Namely, heavily customized open-source software.

But this is more about customization and less about open source. It may be that Wal-Mart (as well as the web companies mentioned) over-customize, thinking themselves special/different/whatever. I can buy that.But this doesn't lead to the conclusion that no customization is needed. If Wal-Mart's business isn't really any different from Target, then why buy from it? Cost? If it's business isn't differentiated, eventually the prices are going to converge, anyway.

IT needs to be customized to fit business processes and business priorities. That entails a certain amount of customization. Frankly, if you're going to customize, it's often going to be best to start with a strong open-source core, rather than an inflexible proprietary system. You're still going to overpay consultants, but you might as well do so to get something truly tailored for your business needs.

Wal-Mart should do what it has always done well: tailor technology to its particular needs. When those needs aren't "particular" anymore, it won't have a reason to buy or customize IT, because it won't have any reason to be in business at all.