Case Study on Information Technology Management:
Frito-Lay’s Long-Term IT Plan
Because the rate of technological change is so rapid, most people see IT through the narrow lens of short-term, silver-bullet solutions. IT vendors want you to believe that their important new technologies will blow away what has come before. You can’t blame a salesperson for trying to sell, or CIOs for having a queasy buy-or-lose feeling, but this attitude is precisely the opposite of the one companies should be taking. We would argue that because the winds of change affect IT more than any other area of the organization, IT benefits most from a long-term, disciplined, strategic view, and a square focus on achieving the company’s most fundamental goals.
For example, Frito Lay’s strategic goal has always been to make, move, and sell tasty, fresh snack food as rapidly and efficiently as possible. That goal hasn’t changed since 1930s, when founder Herman Lay ran his business from his Atlanta kitchen and one delivery truck. He bought and cooked the potatoes. He delivered the chips to the stores. He collected the money and knew all his customers. He balanced the books and did his own quality assurance. Herman Lay knew how to conduct the perfect “sense and respond” e-business before such a thing ever existed, for he held real-time customer, accounting, and inventory information all in one place – his head!
After years of spectacular growth, the company became progressively distracted from this simple business model. By the early 1980s, the company’s sales force had swelled to 10,000, and information grew harder and harder to manage. The company’s old batch-based data processing systems were all driven by paper forms that took 12 weeks to print and distribute to the sales force. All sales transactions were recorded by hand; reams of disparate data were transferred to the company’s mainframe computers. Much was lost in the process of setting up a dozen different functional...
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