Zara: It for Fast Fashion

Zara IT for degenerate Fashion Identification of troubles The courtship study, Zara IT for Fast Fashion, cogitatees on the retail giant, Inditex, and how its largest retail chain, Zara, has been so successful with their vexation stumper of high fashion, carrefour variation, low cost, speed, and flexibility. Several put outs ar identify in this suit study. angiotensin-converting enzyme glaring issue that is probable relates to the fact that a long term Information Technology (IT) dodge does non exist. in that location is no stately throw inment of rules in flummox to plan and predict for their succeeding(a) involve, including operational and capital expenses.An otherwise issue consists of the retailer not having a centralized distribution agreement in place, their stores do not treat inventory counts, and the managers do not select a governing body in place to purport up their inventory balances in their stores or other stores, (they effect this by bell ri nging the stores). Another signifi dissolvet new issue relates to the fact that their present-day(prenominal) IT musical arrangement is unsustainable, as the equipment is antiquated and uncorroborated by Microsoft. Their IT system is not wireless, their screens are sm tout ensemble, they are development styluses, which depose be cumbersome, and older applied science such as lax disks and modems.The last issue involves a lack of shared knowledge of the true system in place whizz person is relied upon and depended for knowledge of the systems in operation(p)ity. Being so dependant upon one person places the whole system at put on the line. Importance of the key issue The key issue in this case study involves whether or not Inditex should farm the retailers entropy technology al-Qaida and capabilities or whether they should expand using their reliable system. The problem that Zara faces now is that their current system, P-O-S (Point of Sales perchs), runs on DOS, wh ich Microsoft does not nutriment any longer.Any hardware change in the POS terminal would not be congenial with their current POS software. Without an upgrade, they risk that their current supplier could no longer resist them. Investing in IT floor is necessary as Microsoft DOS is obsolete technology and there is no guarantee that their POS vendor lead continue fork outing the same terminal without changes to their hardware. Personal Digital Assistants (PDAs) are currently used in all Zara stores, POS terminals are not attached with Zaras headquarters or with other stores. here is no system in place to standoff employees daily sales, causing employees to copy this information onto a floppy disk. Zaras success and main agate line strategy is dependent upon their ability to respond very quickly to the learns of their clients. By upgrading their current system, they could add functionality and capabilities that could disband other issues they face, such as sharing inventor y, and being proficient at matching supply and demand. They can comfortably take care their mission by keeping current with fashion.Without the infrastructure to support it, it would be insurmountable to accomplish, as they would not have the security controls, and back up systems in place. This issue is more than grievous than any other issue to resolve, as Zaras mission, success and prox depends on technology reliableness and accuracy. If this issue is not resolved, it is impossible to address all of the other issues identified above. Key Stakeholders There are numerous stakeholders who are affected by the key issue of whether or not they should upgrade their IT Zaras customers system fate the latest fashions in stock, in their size and color, in a periody fashion.By having an upgraded, efficient IT system, Zaras customers could experience better inventory controls to meet their needs. This in turn develops customer loyalty which equates to a high volume of sales. Another key stakeholder is Zaras employees. Employees need job security. A well defined, upgraded, efficient IT system can assist in sales volume, which turns into profit for the smart set. Employees in like manner want to reduce their processload and redundancy. Their current system does not take advantage of functional automation and confabulation, which can increase their work load.Another stakeholder, Zaras IT vendor, certainly wants to claim their business sector relationship with them, but may convalesce it difficult to continue claiming business with a company who uses such an obsolete, unsupported, vulnerable system. Zaras managers are also important stakeholders in the finish to upgrade. Their managers want the current POS system to do more, such as look up inventory balances in stores. This basic functionality is lacking. They want to be in a position to conduct pricing and keep up with their competitors.Zaras shareholders are interested in maintaining the financial su ccess that Zara has experienced. They want a system in place to assure that their current fashion demands are met, that a system is in place to circular for and share merchandise. They want to be able to invest wisely and premise themselves to run fresh in the apparel industry. Another stakeholder, Zaras suppliers wants a functional IT system to erect better lead judgment of conviction for orders and materials, and to be able to communicate in a timely, seamless manner. Causes of the issueThere are many an(prenominal) causes that contribute to the situation that Zara faces at the moment. Having a mission and vision without having a strategic plan to meet there is a contributing factor. Having a decentralized decision do system in place can also be a root cause. Having equipment that is obsolescence is a go of the above factors. Not having mental faculty and systems in place to in effect plan for the future, leads to antiquated equipment and manual, cumbersome, inaccurate, wreakes. Other factors liable for the lack of strategic IT readiness at Zara entangle their current business model and leadership complacency.Alternative solutions There are three secondary solutions. The first would be to purchase the current POS terminals from their vendors so they can support their needs in case the vendor changes their implement to new technology, and continue functioning the way they have been. The second solution involves make a consulting libertine to review their situation and conduct a strategic financial analysis of their options. The threesome solution to the key issue identified is to proceed in upgrading their current IT system and add functional capabilities to meet the needs of their organization.Recommendations I recommend the third solution, that Zara purchase and implementing a new POS networking system. This recommendation would farm a robust system that is more responsive to Inditexs supply chain network. It also re resettlements the ri sk of the system becoming obsolete and non- compatible with the vendors machine upgrade. It decreases their exposure for system failures, helps to maintain and improve efficiency of decentralization because information flow can be improved between stores, distribution chains and vendors.The most important aspect of Zaras approach to information technology includes the ability to meet the needs of their customers, whether that involves accuracy, timeliness, marketing, demand, or communication. Their original business model involved linking demand to manufacturing, and linking manufacturing to distribution, this involves a reliable, compatible IT system. Upgrading the POS applications to include additional functionality, such as networking capability, and the ability to share inventory with other stores, only makes their corporation more productive and efficient.The use of larger screens, and keyboards, vs. smaller screens and styluses would also be respectable to the employees and customers. There are in time pitfalls to this recommendation. Above and beyond the obvious capital expense of the equipment and software, implementing the recommended solution in the piteous term may require restructuring the IT department to include a Chief Information policeman (CIO). The CIO would also be prudent to conduct a comprehensive review of current industry technologies and pay off which IT capabilities and functionalities will top hat support the companys strategic mission.This person would also be responsible for(p) to take off a formal IT budgeting process that is part of the broader capital budget, and create a formal process for selecting and prioritizing IT projects that includes both financial and non-financial inflection (Porter, M, 2001). In the medium term, Zara may consider an outside team to initiate this IT change. It is questionable if Zara currently has the time and internal talent to effect the change. An outsourced professional team may accomplis h this task, while allowing military force to focus on their day to day operations.Zara can cross channelise a few IT personnel to work closely with the implementation team, to assure a seamless transition. A train the trainer may be beneficial. This may mean that they may have to hire replacement personnel on a irregular terms. In the long term Zara should develop a long-term IT transmutation plan as recommended by Feld and Stoddard, 2004, to develop a plan to maintain and sustain their new system this requires time, money and talent. Incorporating the three principles in executing IT effectively A long termIT renewal plan associate to corporate strategy, a simplified unifying corporate technology platform and a highly functional, performance-oriented IT organization would benefit Zara (Feld and Stoddard, 2004). Keeping up with technology allows Zara to focus on future fashion trends, with effective IT they will be able to stay ahead of the curve and keep their leadership. T hey will sustain their business model based on short deadlines, decrease quantities, and updated styles and fashion.If Zara anticipates opening up new stores in the future, they would need to upgrade their system anyway. If they opened up new stores with new technology, their current technology would not be compatible and the stores could not communicate effectively with one another and share information. The second solution mentioned above, which involves hiring a consulting firm to review their situation and conduct a strategic financial analysis of their options is not in the best interest of the corporation.Hiring consultants takes time and animation and are expensive. They are not familiar with the organizations structure, strengths, weaknesses or capabilities. Financial resources would be better spent on the purchase of new upgraded equipment vs. putting off the inevitable. The first solution exposit above, purchasing the current POS terminals from their vendors so they can support their needs in case the vendor changes their machine to new technology and go along to function they way they have been is not an option, if they want to remain viable.Change is unavoidable, as this profitable, highly reputable company cannot continue to function with obsolete equipment. Obsolete equipment sets them up for failure in the event the equipment fails or needs repair. It does not allow them to implement a systematic plan to move the organization forward, instead it stagnates their capabilities. The in all likelihood outcomes of my recommendation would be an efficient, accurate, timely IT infrastructure that communicates well with all stores, accurately accounts for all inventory, allowing manual processes to dissolve.This creates greater efficiencies on the part of the staff. Changing and upgrading their IT system would compensate for their internal communication weaknesses. Upgrading the POS terminals to modern inventory focus software, would allow orders to be made on a daily basis instead of twice a week. This would allow the demand and supply to be matched more accurately, making the work process leaner. Inventory focal point software would lso allow designers to follow the sales of garments more closely, instead of relying on manual orders from store managers. stash away managers could send new fashion or fabric ideas over the earnings to headquarters. This constant monitoring and update can give designers an advantage over the competition in development new styles and keeping up with the latest fashions. Updating their communication and IT system sooner, rather than later would boilers suit sustain viability of the corporation and stir their business success.Zara It for Fast FashionZara IT for Fast Fashion Identification of issues The case study, Zara IT for Fast Fashion, focuses on the retail giant, Inditex, and how its largest retail chain, Zara, has been so successful with their business model of high fashion, product var iation, low cost, speed, and flexibility. Several issues are identified in this case study. One glaring issue that is apparent relates to the fact that a long term Information Technology (IT) strategy does not exist. There is no formal system in place to plan and predict for their future needs, including operational and capital expenses.Another issue consists of the retailer not having a centralized distribution system in place, their stores do not share inventory counts, and the managers do not have a system in place to look up their inventory balances in their stores or other stores, (they accomplish this by canvassing the stores). Another significant current issue relates to the fact that their current IT system is unsustainable, as the equipment is obsolete and unsupported by Microsoft. Their IT system is not wireless, their screens are small, they are using styluses, which can be cumbersome, and older technology such as floppy disks and modems.The last issue involves a lack of shared knowledge of the current system in place one person is relied upon and depended for knowledge of the systems functionality. Being so dependant upon one person places the whole system at risk. Importance of the key issue The key issue in this case study involves whether or not Inditex should upgrade the retailers information technology infrastructure and capabilities or whether they should continue using their current system. The problem that Zara faces now is that their current system, P-O-S (Point of Sales terminals), runs on DOS, which Microsoft does not support any longer.Any hardware change in the POS terminal would not be compatible with their current POS software. Without an upgrade, they risk that their current supplier could no longer support them. Investing in IT infrastructure is inevitable as Microsoft DOS is obsolete technology and there is no guarantee that their POS vendor will continue supplying the same terminal without changes to their hardware. Personal Digi tal Assistants (PDAs) are currently used in all Zara stores, POS terminals are not connected with Zaras headquarters or with other stores. here is no system in place to link employees daily sales, causing employees to copy this information onto a floppy disk. Zaras success and main business strategy is dependent upon their ability to respond very quickly to the demands of their customers. By upgrading their current system, they could add functionality and capabilities that could resolve other issues they face, such as sharing inventory, and being proficient at matching supply and demand. They can comfortably meet their mission by keeping current with fashion.Without the infrastructure to support it, it would be impossible to accomplish, as they would not have the security controls, and back up systems in place. This issue is more important than any other issue to resolve, as Zaras mission, success and future depends on technology reliability and accuracy. If this issue is not resolv ed, it is impossible to address all of the other issues identified above. Key Stakeholders There are numerous stakeholders who are affected by the key issue of whether or not they should upgrade their IT Zaras customers system want the latest fashions in stock, in their size and color, in a timey fashion.By having an upgraded, efficient IT system, Zaras customers could experience better inventory controls to meet their needs. This in turn develops customer loyalty which equates to a higher volume of sales. Another key stakeholder is Zaras employees. Employees want job security. A well defined, upgraded, efficient IT system can assist in sales volume, which turns into profit for the company. Employees also want to reduce their workload and redundancy. Their current system does not take advantage of functional automation and communication, which can increase their work load.Another stakeholder, Zaras IT vendor, certainly wants to maintain their business relationship with them, but may find it difficult to continue conducting business with a company who uses such an obsolete, unsupported, vulnerable system. Zaras managers are also important stakeholders in the decision to upgrade. Their managers want the current POS system to do more, such as look up inventory balances in stores. This basic functionality is lacking. They want to be in a position to negotiate pricing and keep up with their competitors.Zaras shareholders are interested in maintaining the financial success that Zara has experienced. They want a system in place to assure that their current fashion demands are met, that a system is in place to account for and share merchandise. They want to be able to invest wisely and innovate themselves to stay fresh in the apparel industry. Another stakeholder, Zaras suppliers wants a functional IT system to provide better lead time for orders and materials, and to be able to communicate in a timely, seamless manner. Causes of the issueThere are many causes that co ntribute to the situation that Zara faces at the moment. Having a mission and vision without having a strategic plan to get there is a contributing factor. Having a decentralized decision making system in place can also be a root cause. Having equipment that is obsolescence is a result of the above factors. Not having staff and systems in place to effectively plan for the future, leads to antiquated equipment and manual, cumbersome, inaccurate, processes. Other factors responsible for the lack of strategic IT planning at Zara include their current business model and leadership complacency.Alternative solutions There are three alternative solutions. The first would be to purchase the current POS terminals from their vendors so they can support their needs in case the vendor changes their machine to new technology, and continue functioning the way they have been. The second solution involves hire a consulting firm to review their situation and conduct a strategic financial analysis of their options. The third solution to the key issue identified is to proceed in upgrading their current IT system and add functional capabilities to meet the needs of their organization.Recommendations I recommend the third solution, that Zara purchase and implementing a new POS networking system. This recommendation would create a robust system that is more responsive to Inditexs supply chain network. It also removes the risk of the system becoming obsolete and non- compatible with the vendors machine upgrade. It decreases their exposure for system failures, helps to maintain and improve efficiency of decentralization because information flow can be improved between stores, distribution chains and vendors.The most important aspect of Zaras approach to information technology includes the ability to meet the needs of their customers, whether that involves accuracy, timeliness, marketing, demand, or communication. Their original business model involved linking demand to manufacturing, and linking manufacturing to distribution, this involves a reliable, compatible IT system. Upgrading the POS applications to include additional functionality, such as networking capability, and the ability to share inventory with other stores, only makes their corporation more productive and efficient.The use of larger screens, and keyboards, vs. smaller screens and styluses would also be beneficial to the employees and customers. There are however pitfalls to this recommendation. Above and beyond the obvious capital expense of the equipment and software, implementing the recommended solution in the short term may require restructuring the IT department to include a Chief Information Officer (CIO). The CIO would also be responsible to conduct a comprehensive review of current industry technologies and determine which IT capabilities and functionalities will best support the companys strategic mission.This person would also be responsible to initiate a formal IT budgeting process th at is part of the broader capital budget, and create a formal process for selecting and prioritizing IT projects that includes both financial and non-financial metrics (Porter, M, 2001). In the medium term, Zara may consider an outside team to initiate this IT change. It is questionable if Zara currently has the time and internal talent to effect the change. An outsourced professional team may accomplish this task, while allowing personnel to focus on their day to day operations.Zara can cross train a few IT personnel to work closely with the implementation team, to assure a seamless transition. A train the trainer may be beneficial. This may mean that they may have to hire replacement personnel on a temporary basis. In the long term Zara should develop a long-term IT renewal plan as recommended by Feld and Stoddard, 2004, to develop a plan to maintain and sustain their new system this requires time, money and talent. Incorporating the three principles in executing IT effectively A long termIT renewal plan linked to corporate strategy, a simplified unifying corporate technology platform and a highly functional, performance-oriented IT organization would benefit Zara (Feld and Stoddard, 2004). Keeping up with technology allows Zara to focus on future fashion trends, with effective IT they will be able to stay ahead of the curve and keep their leadership. They will sustain their business model based on short deadlines, decrease quantities, and updated styles and fashion.If Zara anticipates opening up new stores in the future, they would need to upgrade their system anyway. If they opened up new stores with new technology, their current technology would not be compatible and the stores could not communicate effectively with one another and share information. The second solution mentioned above, which involves hiring a consulting firm to review their situation and conduct a strategic financial analysis of their options is not in the best interest of the corporatio n.Hiring consultants takes time and energy and are expensive. They are not familiar with the organizations structure, strengths, weaknesses or capabilities. Financial resources would be better spent on the purchase of new upgraded equipment vs. putting off the inevitable. The first solution described above, purchasing the current POS terminals from their vendors so they can support their needs in case the vendor changes their machine to new technology and continuing to function they way they have been is not an option, if they want to remain viable.Change is unavoidable, as this profitable, highly reputable company cannot continue to function with obsolete equipment. Obsolete equipment sets them up for failure in the event the equipment fails or needs repair. It does not allow them to implement a systematic plan to move the organization forward, instead it stagnates their capabilities. The likely outcomes of my recommendation would be an efficient, accurate, timely IT infrastructure that communicates well with all stores, accurately accounts for all inventory, allowing manual processes to dissolve.This creates greater efficiencies on the part of the staff. Changing and upgrading their IT system would compensate for their internal communication weaknesses. Upgrading the POS terminals to modern inventory management software, would allow orders to be made on a daily basis instead of twice a week. This would allow the demand and supply to be matched more accurately, making the production process leaner. Inventory management software would lso allow designers to follow the sales of garments more closely, instead of relying on manual orders from store managers. Store managers could send new fashion or fabric ideas over the internet to headquarters. This constant monitoring and updating can give designers an advantage over the competition in developing new styles and keeping up with the latest fashions. Updating their communication and IT system sooner, rather than l ater would overall sustain viability of the corporation and enhance their business success.