IT Leadership // IT Strategy
Walmart, BoA Are Top IT Spenders
Walmart tops the list of the 10 biggest IT spenders, which otherwise is dominated by banks and financial services companies.
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The world's largest companies spent about $895 billion on technology in 2014, according to research firm IDC.
The top 10 IT spenders accounted for $45.3 billion of that total. At nine out of ten of those companies, technology spending rose between 2 and 10 percentage points in 2014, compared to 2013.
IDC's study, "The Big Guns: IDC's Worldwide Top Ten IT Spenders," identifies Walmart Stores as the top IT spender. The retail giant spent $10.16 billion on IT in 2014, a 3.1% increase from the $9.86 billion it spent in 2013.
Second-ranked Bank of America spent about half what Walmart spent on IT in 2014, $5.33 billion, but its spending growth percentage, at 6.2%, was roughly double Walmart's.
Citigroup, AT&T, and JPMorgan Chase represent the remainder of the top five. IDC's study indicates that, on average, about a third of the technology spending by these companies goes toward salaries and benefits for internal IT and telecommunications staff.
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IDC program director Jessica Goepfert said in an email that the largest companies are spending on a combination of customer-facing and enterprise-focused projects, along with initiatives to adopt and advance third-party platform technology.
"This indicates that companies recognize the imperative to implement innovative technologies to remain competitive while balancing necessary investments to 'keep their houses' in order," said Goepfert.
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Bank of America, said Goepfert, has retired more than 18,000 applications since 2010 to simplify and modernize its platform. "Meanwhile, the company is also utilizing big data to help with its customer retention efforts," she explained. "This includes, in part, a consolidated central analytics group to foster more transparency and communication across channels for a smoother customer experience."
Among financial services and retail companies in particular, said Goepfert, mobile technology initiatives aim to meet customer needs. "Walmart, for instance, is very focused on mobilizing the store," she said. "The company claims it was the first retailer to launch geo-sensitive functionality that changes the user interface of its customer-facing mobile application when a shopper enters the store."
Goepfert pointed to Nordstrom as another large retailer that manages to be innovative in terms of IT. The company, she said, has found ways to use technology in the service of its mission: to provide a great customer experience. "There are a variety of examples -- from its point-of-sale system, to different apps it has launched," she said. "What is unique is that the company, despite its size, seems to be able to execute its strategy in a cohesive, integrated fashion."
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Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful ... View Full Bio
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soozyg,
4/8/2015 | 11:52:38 AM
I hate to admit it, because of all their bad press and reputable bad practices, that Walmart is one of my favorite stores. I use Amazon Prime now because it's easier to get things shipped than have to walk into a store, but if it was convenient, I would love to go to Walmart. I have also successfully shopped at Walmart.com. This information just adds to their appeal for me.
4/8/2015 | 12:18:03 PM
I also like the fact that when Walmart was going to launch Walmart.com, they made a separate office and developed it like a completely different business. I can't speak to the inner workings on the sales floor, but they are excellent at business.
vnewman2,
4/8/2015 | 1:11:26 PM
Re: more
I never used to shop at Nordstrom until I started working across the street from one. I must say, it is a similar experience to shopping at the Apple store. From their handy phones, they can check you out, email you your receipt, and look you up if you don't have your credit card. They're also able to quickly view inventory and find an item anywhere in the country without having to actually call a bunch of stores to do so.
It's become my go-to shopping place - even though it is a little pricer, but the experience is so much better, it is worth it to me. Most other department stores are finally starting to get the message and jump on the bandwagon but a dollar short and a day late in my book!
Yes, being able to give fantastic customer service is the difference between repeat customers and lost customers. I use Peapod delivery service and I think I'm paying a little bit more, but their customer service is excellent and it's so damn convenient!
@soozyg - I'm not familiar with Peapod - I will certainly look it up but could you tell us all a little more? Is it only available in select areas?
Peapod operates out of Stop & Shop (like Drugstore.com runs out of Walgreens), so if you don't have a Stop & Shop near you, you won't have Peapod. There's also Fresh Direct and Hello Fresh, but I think Hello Fresh is just about fresh produce. Maybe Google food delivery to find out what's services your area? As a single mom of 2 who works from home, delivery convenience is crucial to me!
cafzali,
User Rank: Moderator
Re: walmart
@soozyg Attitudes about Wal-Mart seem to vary a lot, depending in large part on who the competition is where you are and how the Wal-Mart is in your area.
In my experience, in areas where real estate is more expensive, Wal-Mart generally has a poor shopping experience compared to Target, which aims at a more upscale demographic. Also, in places where labor competition is tougher, you generally get pretty poor customer service from Wal-Mart stores, but better service in Target, which pays its workers more. Wal-Mart's e-commerce operations are very good, though.
From an IT perspective, though, nothing beats the sophistication of Wal-Mart Stores (the parent) when it comes to knowing what sells where. They purposefully carry different stock in different stores because they have data on sales like no one else.
@cafzali
Oops! I forgot about Target! Love Target. When I lived near one I used to go in for one item and leave with $100 worth of stuff. Amazon Prime is my best friend now since I'm not close to Walmart or Target.
"From an IT perspective, though, nothing beats the sophistication of Wal-Mart Stores (the parent) when it comes to knowing what sells where. They purposefully carry different stock in different stores because they have data on sales like no one else."
--Yes, they localize very well.
zerox203,
Re: Walmart, BoA Are Top IT Spenders
This definitely pulls a lot of things into perspective. Think about big IT innovators; Does Walmart come to mind at all? Even banks, who we all know have rigorous IT needs would not necessarily top most people's lists. What we have here is a referendum on the 'everyone is digital' mantra - the size of your company directly translates to the size of your IT spending. The idea of the virtualization, etc. mainstays we talk about here every day trying to court the old guard may be a bit jarring, but I have every belief that it's the truth. SoozyG adds an interesting point - these big companies have multiple 'arms'. If Wal-Mart developed it's site as a seperate business, that business needed extra IT staff, extra management, and extra infrastructure. It's that kind of scale that led Amazon to build AWS, which is now one of their biggest offerings (and coincidentally comes back into play here).
I am curious about these customer-facing offerings, though. First, we're lacking some details here. What kind of apps did Nordstrom develop? I read once about their employees carrying tablets or something similar, but that was only a pilot program at some stores, I think. Does anyone know if that's still going on? Second, I wonder how many customers are actually regular users of these kinds of in-store things. As Cafzali points out, Walmart is known for catering to certain demographics. People who want to get their shopping done fast, all in one place, and at the lowest possible price - perhaps not the most tech-inclined bunch. Heck, I'm a huge gadget geek, and I can't think of one time I've pulled out my phone in a store for any kind of "enhanced experience". It seems like everyone keeps saying that 'next year' is the big year for this to take off, but when is next year coming?
jastroff,
Peapod.com is an excellent example of a customer service that's gotten better in the last few years. One of the major things they did was connect their inventory system to the customer facing order screen, so it will tell you what's out of stock, which is important when you are ordering. They've made a mistake by cutting out the "customer substitution" options, but perhaps they'll phase that back in