InformationWeek

December 22, 1997

Chief of the Year, Randy Mott Wal-Mart CIO Randy Mott innovate s for his company'--and customers'--good

n Dec. 1, the first Monday after the long Thanksgiving weekend, things were hopping in Bentonville, Ark., home of Wal-Mart Stores Inc. The retailer's NCR Teradata database was fielding more than 20,000 queries as both Wal-Mart buyers and outside suppliers eagerly tried to get an early read on the start of the holiday shopping season. l They got it-and then some. Wal-Mart's IS group, led by senior VP and CIO Randy Mott, gave the buyers and suppliers access to the previous 65 weeks' worth of sales figures for each of the retailer's nearly 2,800 U.S. stores, super-centers, and wholesale clubs. Some buyers even mined data from the checkout baskets of individual shoppers in a quest to make better decisions about merchandising and store displays . l For nearly two decades, delivering that type of

strategic information has been the modus operandi of Mott, InformationWeek's 1997 Chief of the Year. In a year when competitive pressures and a relentless pace of change have made the IT-business partnership absolutely imperative to the bottom line, InformationWeek's readers and editors have chosen Mott and his innovative IT division at Wal-Mart as the preeminent model of success. For good reason: Mott judges every IT investment, development decision, and technology choice by only one measure: how it will help the business.

Business First
Mott, 41, has lived this philosophy since joining Wal-Mart, the world's biggest retailer, as a 21-year-old programmer in 1978. One of his early tasks involved coding applications for Wal-Mart's first remote automated distribution center, more than 200 miles away in Searcy, Ark. The assignment helped Mott form his business-benefit-above-all philosophy. "It was a big step for the company to have a lot of the m erchandise in a place where they couldn't go out and touch it," Mott recalls.

Today, Wal-Mart's IT departments instill that kind of thinking in all of their 1,370 employees. "The greatest reward is to accomplish something in IT and see it in action, making associates [Wal-Mart's term for its employees] and customers happy," says Mott. "It's tough to get any better than that."

Mott's philosophy has paid off handsomely-and pulled Wal-Mart out of some sluggish times. Two years ago, although the company's revenue had grown handsomely, to $93.6 billion, profit growth had stalled. To help, Mott embarked on an aggressive program to increase IT development staff by nearly 40% and quickly deliver applications aimed at reducing store inventories and speeding the supply chain.

He succeeded. For the first nine months of Wal-Mart's current fiscal year, profits grew by 14% on a 12% sales jump; third-quarter profit jumped by 16% on an 11% revenue advance. Crucially, third-quarter inventories at Wal-Mart's U.S. stores were lower than year-earlier levels, an achievement directly attributable to better and faster information in the supply chain.

One result: Wal-Mart stores used to receive just one shipment of seasonal items for the Christmas season; now, each gets three to five shipments. "Wal-Mart controls losses from inventory better than any other retailer," says Bill Eisenman, senior VP of computer systems at NCR in Dayton, Ohio. "It's a major reason why they can keep costs down and advertise 'Always Low Prices. Always Wal-Mart.'"

By all accounts, Mott is a humble, self-effacing man who finds his greatest professional rewards in helping others succeed. "I see a lot of good CIOs," says Eisenman, "but what separates the real good ones is they don't just get the requirements from the business and deliver them. They view themselves as major catalysts for improving the business. That's Randy Mott to a T."

Wal-Mart's business executives couldn't agree more. In September, they promoted him to the company's 14-member exe cutive committee. The appointment recognizes the fact that even though Mott has spent his entire 20-year career at Wal-Mart in IT, he has never once looked at technology only for technology's sake.

"First and foremost, he is absolutely a retailer," says Sue Brann, the IT division's people director (Wal-Mart parlance for head of human resources). "He tells every associate that they're going to understand a process before they automate it." Adds Kevin Turner, Wal-Mart's VP of application development: "He's not a fiery-for-effect kind of manager, but a solid, everyday contributor who earns your respect. He's one of the true gentlemen in our profession. You just want to be around him. It's hard not to kill yourself working for him."

Mott has kept Wal-Mart on the leading edge of innovation. Since his promotion to senior VP and CIO in May 1994, Mott has either pioneered or continued Wal-Mart's leadership in quick-response merchandise replenishment, use of massively parallel processing, and supply-chain managem ent.

Wal-Mart has certainly been an IT pioneer. The retailer ran extranets-albeit not on the Internet-well before the term had even been invented. Its RetailLink private network for sharing inventory and sales data with merchandise suppliers was one of the first large-scale examples of vendor-managed inventory. It now shares data with more than 4,000 suppliers and is moving to the Net, with the rollover scheduled for completion by March. Wal-Mart's CarrierLink network for firms that haul goods to its distribution centers will also move to the Net next year. And its client-server decision-support application will move to the corporate intranet in 1998.

Wal-Mart's biggest ground-breaking IT advancements under Mott have come in data warehousing and data mining. It's not just having a database of 24 terabytes; it's the way the retailer has mined the data to better understand which items sell, which don't, which tend to sell with other specific items, and what types of people shop at particular Wal-Mart store s. That means better decisions in merchandising, inventory, and pricing. "No two Wal-Mart stores are alike," says Mott.

Warehousing Evangelist
Impressive as that is, Mott has gone several steps further. He's taken on the role of data-warehousing advocate and evangelist, not just at Wal-Mart, not just in the retail industry, but for all kinds of potential users worldwide. Mott has hosted visits in Bentonville from more than 60 companies interested in data warehousing, and earlier this year, he spent a day and a half in Tokyo with retail customers of NCR Japan.

Yet Mott is no pushover for his vendors. In fact, he demands that vendors provide the same business benefits to Wal-Mart that he asks from his own IT organization. "[Mott] expects a quality product at the right price, and usually faster than we can deliver it," Eisenman of NCR says with a chuckle.

Also, Mott has a near-total commitment to using applications developed in-house. With only a few exceptions-such as a human-resources system from PeopleSoft-Wal-Mart eschews packaged apps, and Mott is adamant about it. "I know I think a little differently from some of my peers," he says, "but there's something fundamentally wrong when you have to ask your people to modify the business to fit a software package."

Mott has also taken a leadership position in easy communication across the supply chain. He serves on the executive committee of Voluntary Inter-Industry Commerce Standards in Washington, an association that promotes communications standards among retailers and suppliers. Mott is also a member of the Research Board in New York, a prestigious group of CIOs from the country's largest corporations.

Wal-Mart, perhaps more than any other $100+ billion company, has remained true to the down-home roots of its founder, the late Sam Walton. Mott fits in perfectly. He's lived almost his entire life within 30 miles of Bentonville, attending high school in neighboring Rogers, Ark., going to college just 20 miles down U.S. 71 at the University of Arkansas in Fayetteville, and now living back in Rogers. "I wanted to join a growing and progressive IT organization and figured I'd have to move to Dallas or Houston," says Mott. "As it worked out, I was happy to be able to stay here and raise a family in northwest Arkansas."

Mott and his wife, Shannon, a registered nurse, have two sons and a daughter. A yearly ski trip to Colorado is a family tradition. Another of Mott's favorite pastimes is cheering his kids on at football, soccer, and basketball games-once again, reveling in others' successes.

Mott's local roots and long Wal-Mart career help the company attract IT talent to Bentonville, says HR director Brann. "He gets involved in the hiring process, even with college students," she says. "He's able to articulate what it means to work here from personal experience."

Mott insists his organization's best days are still ahead. "A lot of people look at retail technology and automation and think it has arrived. But it's not a finished product, and yo u have to continue to work at it," he says. "We still have a long way to go."

See related stories:
" Chief Of The Year Runner-Up and Chief Of The Year Honorable Mentions "

Back to News in Review