Does packaged software always provide an advantage in IT?
Nick Carr has an interesting article on the transition at Wal-Mart from highly customized systems offering competitive advantage in their industry to commoditized packaged software solutions. Nick writes, “Wal-Mart had famously set itself apart from its retailing rivals, IT analysts would point out, by building a lot of highly customized IT systems that its competitors were hard-pressed to match… Now, with commodity software greatly advanced, Wal-Mart’s custom systems have turned from advantage to disadvantage, and the IT analysts have changed their tune.”
Clearly the goal here is for Wal-Mart to focus more on its core business and to move away from a preponderance of custom written and supported business applications. While this may be a sensible decision for Wal-Mart, I wonder if such a rapid migration from custom solutions to new pricing, business intelligence and financial management systems can be so easily accomplished. Often times these major projects can put a major strain on the organization. The resources devoted to acquire the technology, implement the solution and to manage change within the organization can be astounding. My main question is will the IT analysts that so strongly support this direction now continue to follow this story to determine whether or not these implementations delivered what the organization expected and truly proved to provide a more functional and cost-effective solution when compared to Wal-Mart’s custom developed software?