Welch's Case

Situation:

During the early 1990’s, Welch’s Foods was still using mainframe technology and was not aware of the technology shifts that were occurring around the world. For this reason, Welch’s IT practices had more in common with the 1970’s than the 1990’s, and the company’s CFO, Tom Callahan, was well aware of it. In addition, he believed that the strategic direction of the IS department was not aligned with the company’s corporate strategy. This is why Mr. Callahan decided to make several changes that at the end would improve the company’s performance.

Critical Issue # 1: Hiring a new CIO.

In early 1992, Callahan made his first significant change to the company when he hired a new CIO. He looked for a person who could understand the business as well as technology. Also, this person needed to be able to align the strategic direction of the IS department with the company’s corporate strategy. This was one of the major problems Callahan had identified in the company. Moreover, as stated in the Argowiki page, “The "perfect" chief information officer combines a profound understanding of technology and the benefits it can bring to an enterprise with a deep knowledge of his or her company, its industry and its customers. To be a successful CIO, you must align IT with the overall business strategy.” This definition shows exactly what Callahan was looking for, and he found it in Girard Liberty.

Callahan made a great decision when he hired Girard Liberty because Liberty had many skills and qualifications obtained in his previous jobs. Liberty had worked in IS operations at big companies, such as, Proctor & Gamble and General Mills, and he also was the CIO at H.P Hood. In addition, all these previous jobs gave him experience with grocery retailers, and the fact that Liberty had worked for such similar companies would make him capable of identifying and utilizing the best practices to implement in Welch Inc.

Critical Issue # 2: Welch’s Old Infrastructure and line...