Kmart Puts IT Overhaul in New CIO's Hands

VP given more responsibility than her predecessors

Kmart Corp.'s new CIO, Randy L. Allen, is the fourth person to hold that title in the past five years.

But as the company moves forward with a major investment in its information technology systems, Allen will take on an expanded role over her predecessors and will serve as executive vice president of corporate strategic planning, a spokeswoman at the Troy, Mich.-based retailer said.

Allen will have more money at her disposal than many of her predecessors. Kmart recently announced plans to spend $670 million on technology and logistics this year, part of a two-year, $1.4 billion plan to revamp its IT systems and improve its execution and store performance, the spokeswoman said.

"That's more money than Kmart has spent in the last decade on IT," she added.

Jim Dion, president of Dionco Inc., a retail consulting firm in Chicago, said he has long suspected that budget constraints were responsible for the departures of Kmart's previous CIOs.

"I just think they get frustrated and leave," Dion said, adding that Kmart "finally seems to be bellying up to the bar to pay what they need to get current."

Joseph Osbourn, Allen's immediate predecessor, joined Kmart last fall as the company continued efforts to rebound to profitability after stinging losses in the mid-1990s and in its fight to keep pace with Bentonville Ark.-based Wal-Mart Stores Inc. and Minneapolis-based Target Corp.

Dion noted that Kmart has "a lot of catching up to do, particularly on the logistics side and the store systems side."

Allen joins Kmart from New York-based Deloitte Consulting in New York, where she was a partner specializing in retail, apparel, manufacturing and distribution industries. She was previously a consultant at IBM and The Boeing Co. in Seattle, and chief information and administration officer at Phillips-Van Heusen Corp. in New York.

Boston-based AMR Research Inc. analyst Janet Suleski said Allen's appointment is "probably not related to any spectacular failures on the previous CIO's part."

Suleski noted that Kmart CEO Chuck Conaway joined the company only recently, and might have wanted to bring in his own team. "I'm sure it's related to standard management turnover," she said.

"They're in a pretty tight situation now where they need to make a lot of changes in their IT infrastructure and deliver a lot of improvements quickly to keep their stockholders happy," Suleski said.

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