Kmart's information technology (IT) infrastructure has been called “archaic, ” “antiquated, ” 1 and “outdated and inefficient, ” 2 and has been cited as one of the main reasons the company has lost its competitive edge to the likes of Wal-Mart and Target. As a DSN Retailing Today article summarized, “The flow of information through the retailer's vast network of more than 2,000 stores was slow at best and created a web of problems that put the retailer behind the times.”2 Rather than improving the company's operations, its information system proved an impediment to progress. What Kmart needs most, say analysts, is a robust, unified IT backbone 3 to run everything from cash registers to inventory management to logistics planning. It seems the company is coming closer to that objective with each round of technology investment, but it is not quite there yet.
Kmart's IT problems, however, had nothing to do with the amount of money the company spent on technology. Through-out its history, several CEOs made multimillion dollar investments— even billion dollar expenditures—in information technology, which should have propelled the company forward. The problem was that Kmart never truly adopted the technology that was made available, deciding instead to rely on the judgment and instinct of its management. Kmart could have invested $100