Software // Enterprise Applications
Commentary
4/6/2007
12:55 PM
Bob Evans
Bob Evans
Commentary
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50%

Wal-Mart's Latest 'Orwellian' Technology Move: Get Over It

Many government workers exist in a world seemingly free from the forces of market demand. Wal-Mart doesn't, and it doesn't need to apologize for managing its business accordingly.

So three months have gone by since Wal-Mart said it was beginning to deploy software aimed at matching employees' schedules with anticipated volumes of store traffic. I've been watching to see if, as some early press reports and "advocates" warned, this initiative would tear the social contract asunder and place Wal-Mart one step closer to controlling the universe by requiring its employees to adapt their work schedules to match customer demand.

But the world hasn't unraveled since the Wal-Mart announcement, and that's because the Wal-Mart plan makes perfect sense. (News flash: Kronos, the software vendor Wal-Mart is using for this initiative, was acquired last month for $1.8 billion, and just last week a competitor was acquired at a huge premium--more on that later.)

While government office workers, road-construction crews, and most airline employees seem somehow to manage to exist in a detached world free from the forces of market demand, most of us mere mortals are quite aware that our livelihoods are pretty darned dependent on treating our customers better than competitors treat them.

The big panic being pushed by some anti-capitalists has centered on the need for Wal-Mart workers to cope with the less-predictable schedules such a system would impose. One union official aligned with a Web site that's stridently opposed to Wal-Mart was quoted by The Wall Street Journal as saying that "the computer" is trying to reduce the number of full-time workers and increase the number of part-timers "with no regard for the effect that it has on workers' lives."

Clearly, the takeaway from his message is to beware "the computer" whose purpose is to grind us worker-dogs relentlessly into bone meal; ironically, this Luddite then goes out and uses "the computer" via that Web site to try to destroy one of the greatest job-creators the world has ever known.

Well, these conspiracy theorists better brace themselves for lots more upheaval because the software vendor Wal-Mart's using, Kronos, has lots of other customers, including a global deal with Ikea (6,200 employees), Finish Line (13,000 employees), Fossil (4,000 employees), New Look (11,000) and many many others. Plus, it was just acquired by a private-equity firm for $1.8 billion, or $55 per share, and the new owner has major expansion plans for Kronos.

It's worth noting that about 11 weeks before the $55-per-share deal, when the Wal-Mart deal was announced, Kronos' shares were trading at $36.85--so clearly the purchase-price premium indicates that some folks who make their living on such decisions think there's a great deal of upside to this type of business tool. And just last week, another maker of scheduling software, Workbrain, was acquired by a large French software conglomerate for a 40% premium over its volume-weighted average price for the trailing 30 days. Do we see a trend here?

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