May 11, 2005 By Tod Newcombe
Reprinted with permission from the May 2005 issue of Government Technology's Public CIO
Enter any 7-Eleven and you can buy something to eat, something to drink and perhaps a newspaper. Nobody thinks about how those fresh muffins reached the store in time for the morning rush, or how there are just enough bottles of soda or chilled water in the cooler on a hot day. All they know is that 7-Eleven's chain of convenience stores seems to have what you need when you need it. It's fast and it's, well, convenient.
One key reason every 7-Eleven in North America always appears well stocked is its technology. Up-to-date and integrated computer systems help 7-Eleven's 5,800 stores in the United States and Canada anticipate the needs of its 6 million customers per day.
Store managers use mobile computers and scanners to take inventory of the more than 2,500 items the chain keeps in stock and to place orders daily. Touchscreen point-of-sale registers and scanners keep track of sales. Managers also tap into the chain's database to assess the top-selling items to keep on hand. Computers even track the weather across the country on a daily basis, adjusting orders throughout the supply chain so stores have the right products when it snows in Iowa or when a heat wave arrives in Texas.
InformationWeek magazine described 7-Eleven as a "company that has staked its future on technology." It's easy to see why. The retail industry is hypercompetitive -- just look at what Wal-Mart has done -- and convenience stores are in the thick of it. Profit margins are razor thin, and 7-Eleven is determined to stay on top, so IT is a key underpinning to its business strategy, according to Keith Morrow, vice president of information systems for 7-Eleven. "This industry changes rapidly. What is convenient today could change tomorrow," said Morrow, reflecting on the critical role IT plays in keeping pace with change in the retail industry.
"I have to execute well," is how he described his role, which these days is more change agent than IT director. As CIO, he has to come up with new IT solutions that will keep the chain nimble in terms of new offerings, which in turn keeps customers happy and coming back for more. That makes his job exciting and puts him unusually close to the business side at 7-Eleven, where he must use technology to constantly modernize the multibillion dollar firm, rather than just follow mandates.
Mergers, Globalization Drive Change
That's how today's CIO should view his or her role, according to Graham Waller, vice president for Gartner's Executive Programs. "The CIO position is one of few in an organization that sees across the enterprise," he said. "Unlike other C-level executives, CIOs understand how the work of an organization occurs on a daily basis, they understand how data flows and how that relates to the enterprise."
That's important because the private sector is becoming ultracompetitive, thanks to corporate mergers and globalization. "It is the confluence of globalization, corporate mergers and the need to meld business process and technology across
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