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Consistency Begets Savings At Home Depot

Home Depot is adopting Web-based systems and dumping proprietary systems to cut costs and standardize operations.

CHICAGO--As Home Depot's IS director, Phil Wilkerson sees consistency as E-business' key to success. "We're cutting millions of dollars in inefficiencies because we have consistent processes," said Wilkerson, speaking Monday at an E-business-integration conference here.

In keeping with the emphasis on consistency, his 1,000-person department is moving away from proprietary systems and focusing more on standards-based Web systems, which he says will help Home Depot work more efficiently with partners. Wilkerson says the company also has discovered the importance of removing language barriers when doing business outside the United States. That's why Home Depot has made all of its code global--by changing language tags, it can conduct E-business in German or Japanese, for instance.

When it comes to communicating internally, the company finds that instant messaging on its private network helps build customer relationships. Home Depot locations that are in proximity will IM back and forth to inquire whether products are in stock or ask about a certain area of building expertise. The idea is to create a level of service on par with Nordstrom's', where sales staff might call around to other outlets in the chain to find the right shoe size for a customer.

To create consistent business processes, it's essential that standards are developed for data integration, he says. "We see ourselves influencing standards on behalf of our suppliers and partners." More consistency is needed today, especially with SKU-level information.

Home Depot doesn't assess business-integration costs as a percentage of sales, Wilkerson says. Instead, the company uses a net-present-value score to understand the value and payoff of technology. He also emphasized that if companies move toward process automation, they must do testing with automated tools. "Your Q/A group can't handle all the complexities, and even if they could, they wouldn't want to."

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