By Larry Dignan  |  Posted 2003-06-16 Print this article Print

Will a Home Depot technology overhaul fend off Lowe's?

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Here's the To-Do List

  • Create digital dashboards. Revamp and restructure data in its warehouse so all parts of the company from store operations to finance monitor daily performance. Status: IBM to help.

  • Reengineer business processes. In human resources, Home Depot is working to standardize processes such as transfers and pay raises. Documentum tools manage and filter reports. Status: Ongoing.

  • Upgrade cash register equipment. Install Web-based terminals or PCs that connect to the data warehouse and allow Home Depot to track cashier performance based on metrics such as customers served and speed. Customers will see cashiers get price and inventory checks on the fly without calling a floor associate for help. Status: Ongoing.

  • Speed up replenishment. Registers will convert bar codes at checkout into orders for restocking shelves. The move is designed to manage inventory better and increase turns. Status: Expected to launch mid-year.

  • Change supplier of credit to customers. Replacing General Electric with Citigroup for its private label credit cards is expected to give more flexibility in financing terms and lower costs. Status: Expected to be completed sometime in July.

  • Deploy standardized enterprise software. IBM will install the PeopleSoft software for human resources and payroll functions. IBM also will implement SAP planning software, letting the company focus on selling to customers on the store floor. Status: Ongoing.

  • Bring in new computers. Forty thousand PCs from Hewlett-Packard and new networking gear from Cisco are on their way. Electrical systems will be revamped and fiber-optic networks will be added. Stores will be tethered to headquarters for data analysis and e-learning initiatives. Status: Ongoing.

    The number of projects could be overwhelming. The efforts could distract Home Depot from its competition with Lowe's—and from recognizing when it has put in one store too many.

    "The U.S. is way 'overstored' in general," says Tom Moseman, senior vice president at Envirosell, a retail-consulting firm. "They're going to run the risk of doing what Gap did—build too many stores, steal sales from itself and then struggle under the added weight."

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    Business Editor
    Larry formerly served as the East Coast news editor and Finance Editor at CNET News.com. Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

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