Home Depot's CEO switch could alter IT strategy

Home Depot's CEO switch could alter IT strategy

Summary: Home Depot CEO Robert Nardelli just resigned and most will focus on his $210 million severance package. But it's worth watching how the retailer's information technology strategy develops under new leadership.

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TOPICS: CXO
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Home Depot CEO Robert Nardelli just resigned and most will focus on his $210 million severance package. But it's worth watching how the retailer's information technology strategy develops under new leadership. Often when a CEO leaves a new CIO isn't far behind.

When Nardelli joined Home Depot in late 2000 from General Electric one of his first big moves was to bring in Bob DeRodes as CIO. DeRodes was previously at Delta Airlines and Nardelli gave him a big mission: Revamp all of Home Depot's IT systems, install PeopleSoft HR, implement SAP and create a data warehouse so managers could track sales and inventory in real time. Previous management at Home Depot didn't invest a lot in IT and hampered DeRodes' predecessor Ron Griffin. Nardelli, however, was sold on information technology.

In fiscal 2005, Home Depot spent $1 billion on technology, largely on automatic inventory replenishment and self checkout systems by NCR. On Home Depot's third quarter earnings call, CFO Carol Tome said the company is "looking at continuing our investment in technology." Indeed, a nice chunk of $3.8 billion in capital spending is allocated to technology.

The big question: Will Home Depot's new CEO Frank Blake be as technology happy as Nardelli was? Judging from recent visits to Home Depot Nardelli seemed to believe that self-checkout systems can replace all cashiers. And those systems probably can for small stuff. Those self-checkout systems generate serious returns, but there's something refreshing about Lowe's approach to IT. Lowe's quietly maintains a technology lead on Home Depot, invests in data warehousing and has Linux point of sale systems yet realizes it's in a people business--it keeps folks on the floor and cashiers at the registers.

It wouldn't be surprising if Home Depot downshifts on the technology investing after 2007. Meanwhile, DeRodes has been a master at sweeping information system overhauls--he pulled one off at Delta too. But Nardelli's departure coupled with that fact there may not be a lot of technology to overhaul anymore at Home Depot could mean a strategy switch and a new CIO. 

Topic: CXO

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  • tech at home depot

    Has this guy ever been in Home Depot and attempted to order anything special? I think not! HD software sucks, it is so slow and the multiple login takes so long that sales person and customer forget just what the hell they were attempting to find in the first place. Equipment is outdated with bloated software.



    d
    msavoie
  • The checkout angle...

    What is Home Depot smoking here, sawdust? Those self operated checkouts are a PITA.

    Excuse me, Home Depot. Stock your store with some pleasant and knowledgeable warm bodies or close your doors. Or no thank you, I will go elsewhere.

    Perhaps some Old Fashioned marketing of like Wendy's could jump start sales. Like- Where's The Employees?
    RShea78
  • Home Depot's CEO switch could alter IT strategy

    Having worked at HD for over 5 years I can attest to the slow
    buggy software. We started out with win95, upgraded to win98SE,
    then 2000 and now XP. Nothing changed from win 95. Constant
    errors, lockups, and getting slower every day. My conclusion is
    that windows is NOT ready for the business world.
    ator1940
  • view from an ExDepot ITer

    The best order entry system HD ever had consisted of HP TTY terminals hardwired to the back of the store HP9000. Employees would tab through those screens at an incredible clip. They loved it. Terminal screen refresh rate vs a web browser on windows ? Give me a break. Technology for Technologies sake. Do you know how often a tty became locked up (almost never) ? How many logins did they have ? One, user and passwd authenticated by the HP9000. HD was a technology leader before, AT&T's first large scale frame network (dumping VSAT). The first ever Retail end-to-end TCP/IP (register to Visa) credit auth in 1994. I wonder how much of that Nardelli IT budget was for exAccenture consultants or high dollar exGE IT folks ? Automation of the customer feel good experience is certain doom.
    s2audi@...