WAL-MART EXEC URGES CAUTION ON NET TRADE EXCHANGE

DAN ALAIMO

CHICAGO -- Retailers should be cautious about participating in Internet trade exchanges because the concept is so new, said Kevin Turner, senior vice president and chief information officer, Wal-Mart Stores, Bentonville, Ark., speaking at the Retail Systems 2000 show here last month.

While it's a good idea to join an exchange, he said, "you have to be a realist about the exchanges. What is an exchange? Is the vendor or supplier only going to be able to write one purchase order? No. They are going to have to write just as many purchase orders as they had to write before," he said.

"The unfortunate part about this exchange scenario is there is so much hype associated with it and so little, if anything, developed. It's air-ware, it's vapor-ware," Turner said.

One reason to become involved with exchanges is to encourage the development of standards, he said. "Those XML standards are how we are going to compete." But retailers will not be at a competitive disadvantage unless they decide to not adopt such standards, he said.

"The opportunity that we all have is to not fall into the trap of chasing these things because they sound neat, but stepping back and making sure what it is that they are trying to accomplish, and making sure that you position your business accordingly," he said.

Wal-Mart will be ready to adopt XML standards and to participate in exchanges as they are developed, Turner said. "But for us to go join an outside company that is made up of our competitors and then have to ask those competitors when and if we want to make a change to that exchange, that is not something that we are ready to participate in. I would really ask you to think through that with your company," he said.

Turner, who delivered a keynote address, touched on several other topics and said retailers must drastically speed up their implementation of new technologies. Using the example of a school grading system, retailers who do everything extremely well today at best could hope to get a "gentleman's C or C-plus," he said.

"The only way to get a B or an A is to do something extraordinary and of value to your company. The requirements for an A or a B are basically light-speed decision making and implementation," he said.

Wal-Mart has a long way to go to improve its technology grades, Turner said. "Our decisions take too long and our implementations are too slow. Speed and innovation are changing the world," he said.

A key to transforming business processes is getting technology people out into the field so they understand how to add value to the company, he said. "We continue to get our folks baptized in this process of getting out and learning and becoming a whole lot better at the business processes," he said.

Turner urged retailers to treat programmers like business professionals.

"You have to expect that they will get out and understand the business. If you treat people like they were what they ought to be, then you help them become what they are capable of. It's very important that we continue to reinforce with our programmers that writing code and just working in information systems is no longer good enough. They have got to help us get in and dig in and understand how to change our business," he said.