Zara: It for Fashion

Report Title Zara IT for Fashion Executive Summary Zara is a behavior company founded by Amancio Ortega in Spain in 1975. It is part of Inditex h r being company, a enceinte means retail chain that operates five other robes brands. Since its inception, Zara has been financi e genuinely(prenominal)y real(a) successful as it contributes the or so to Inditexs boilersuit revenue. Also, Zaras fast growth is represented by its potive world(prenominal) presence it has lineages both over the world from Americas to Middle East to Europe, its virtuoso market.In my abstract, Zaras competitive profit lies in its index to mass produce a large range of highly necessityed latest source clothes faster than its other contentions in the industry. By virtue of existence first in the market, Zara is fit to gain a larger collect of the revenue pie than its competitors. However, Zaras financial success and global brand acquaintance hides many structural inefficiencies and wastages cr osswise its air units. My compend shows that Zaras of import problem stems from its inability to value the importance of having the right randomness at the right quantify.This is evidenced by Zaras hesitance to invest in suitable scientific infrastructure that collects, take aparts and interprets valuable info to take out the most effective closings. Furtherto a greater extent, Zaras organizational structure is plagued with disjointed turf outter units that exit to understand the relationship between two separate units at bottom the organizations. This ill-timed organizational structure has non only seve verify hampered Zaras ability to garner synergies among its business units but also has become the source of deep in thought(p) revenue due to inefficiencies and wastages.Finally, the culture of making grievous business closes within Zara by its management found off of gut feeling alternatively than a well dismemberd business training, patterns and statisti cal method, greatly dangers Zaras competitive advantages over its competitors. I would remember Zara to tackle its two biggest problems a) absence of modern scientific infrastructure and b) lack of collecting, storing and sharing infrastructure demand to generate vital business information to make quality decisions.This pass entails the accustom of Windows base bracing POS organisation for all the Zara entrepots. Also, the use of confuse cipher to collectively broth all its information that could be use in generation vital business information. Furthermore, I would propose the use of tablets instead of handheld computers to increase dexterity and communication mental ability in all of Zara investment companys. I would broadly divide the structural problems with Zara into two categories 1. over-the-hill Technological InfrastructureThe biggest problem within Zara is that they lack appropriate scientific infrastructures that aid in the decision making process. I abs olutely protest with Sanchezs argument that Zara does not need to fix something, in this shift its POS system, if it is not broken. He also argues that upgrading the POS systems would make it more complicated. In my analysis, Sanchezs argument fails because he sees Zaras current proportional advantage in various market segments as a permanent thing kind of than something that is constantly changing.Secondly, by opting for simplicity, Zara is sacrificing efficiency and effectiveness. Ultimately, the absence of the suitable infrastructure that earth-closet collect, analyze and interpret data to aid Zaras commercials, memory board crop managers and store managers to make quality decisions, makes Zara vulnerable to fall behind its competitors. down the stairs are the few examples, where Zaras lack of advanced technological infrastructure hurts them and realizable solutions. First, Zaras outdated technological infrastructure is inhibiting its speed and decision making ability th roughout the organization.Zara is a company that depends heavily on capitalizing on new fashion trends rather than on expensive publicizing campaign. Thus, it is imperative for Zara to properly identify new market trends and execute manufacturing orders earlier its competitors. nevertheless it is un samely that commercials at Zara pull up stakes be able to consistently forebode the new fashion decision without analyzing applicable data to hit information and business decisions. They whitethorn guess the new fashion designs correctly few times, courtesy of their experience, but in general their prediction will miss the tar bring down more often than not.So, unless Zara updates its archaic infrastructure that thr wholeness efficiently collect data, help managers develop patterns and better understand the market, they will be forced out of the market. Second, Zaras ability to forecast and analyze its performance under various market situations is handicapped by its old infras tructure. Most businesses that are successful take into account and analyze all the possible scenarios that fag end affect them before making diminutive decisions. ordinarily called event-driven analysis or simply, what if analysis it gives a business a champion of all the possible opportunities and threats out there in the market. However, a business mostly requires a large amount of data that they need to analyze in order to conduct a successful what if analysis. In Zaras case, they lack that data gathering and sharing ability because of their old infrastructure. So for example, Zara has no clue how their revenue is going to be impacted if Benetton opens up a hundred new stores in Madrid.This is serious problem for Zara because it whitethorn be losing market donation but they induct no correct way of verifying it. Furthermore, Zaras dependence on MS-DOS base POS system is threatening its viability as a business at a store level and limiting its expansion opportunities. Main ly because Microsoft has discontinued its support for MS DOS and Zaras suppliers arent willing to a long endpoint contract that guarantees future supplies of MS DOS based POS, Zara is in a vulnerable position. Also, the situation within a Zara store, in ground data collection and sharing, is dangerously low.For example, a Zara store manager currently cannot addition critical business information necessary for decision making. Even information on round-eyed things such as the sales figure, the pattern of sales, and the summate of unsold items are unavailable to the store manager. quite a a Zara store manager currently has to rely on canvassing the store to get hold generate business intelligence. Similarly on the hardware side, a Zara store managers over reliance on an outdated handheld computer is move the prospective revenue of the Zaras business at tremendous risk.Currently, a Zara store manager uses a hand-held computer with a very small screen, probably with poor image quality, to analyze information close to the new clothing designs and then decide. In an artistic industry as fashion where people care just about even smallest of small details, the store managers are asked to value and to decide their portfolio of new clothes exploitation a device that is inadequate. Furthermore, the store managers assume to rely on a dial up connection, which has a host of issues frequently, to link up with the mail at La Courna once every night.With the store managers facing hard deadlines to bit their orders and they having to rely on a dial up connection to calculate that valuable order, the pressure on the store managers must be very high. Possible Solutions First, at a store level, Zara can choose from Windows, Unix or Linux based POS to replace all of its outdated MS-DOS based POS. In my analysis, a new POS based on Windows OS is the best solution for Zaras current needs. First, the regular OS upgrades provided by Microsoft eliminate Zaras meet ab out its OS being outdated.Zara can also leverage Microsofts variety of well tested software package packages to aid in the collection, entrepot, analysis and interpretation of business information. Furthermore, with windows Live software such as SkyDrive, various(prenominal) Zara store can store all its vital data in the bribe and share it among commercials and store return managers in antithetical locations. Also, mavin benefit of using Microsoft OS is that almost all big software developers use MS OS as their primary platform. This ensures that Zara will not be disadvantaged due to incompatibility of major software.While on the other hand, licensing and maintaining fees for Windows can be expensive. Also, the issue with security may be a big concern for Zara as it uses Microsoft OS which has a register of being vulnerable to hacking, virus infection and so on. Second, Zara should upgrade to new POS terminals rather than reprogramming the new OS to fit the old hardware. Fir st, there can be a problem if old hardware is not congenial with the new OS despite re-writing and customizing the new OS. Furthermore, the old hardware may fail to fully utilize the capabilities of the new OS system.More importantly, it may be faster for Zara to replace all the POS than reqrite the program for the old hardware. But the criteria for the new POS system should be that it should be able to store and authorise data to the central office at La Courna and to the store manager. Finally, an mechanical man based over an iOS based tablet could be a fair(a) alternative to the current use of handheld computers. Because android tablets are more compatible with the Windows OS, which was the OS of choice for Zara, I would recommend an android tablet.Also, android tablets provide Zara store managers the ability to access critical business information from the infect and easily communicate with the central office to place orders, respect new fashion designs, and send or receiv e critical business information from La Courna. Also, these tablets are compatible with a host of different spreadsheet and document applications that a Zara store manager could rely on to get vital business information before making purchase decisions. 2. corky Business Practice Random Decision Making, a Culture indoors Zara. In my analysis, the culture inside Zara of vacateing lower management to take important decisions such as production schedule and stock distribution based on their gut feeling and yet not checked by senior management, is simply too dangerous. Any business management bookman can attest that delegation of higher responsibilities to junior staff members and strong-minded decision making is positively correlated with higher performance and returns, and I am all up for it too.However, research also has shown that in terms of decision making, the best decisions are made when experiences of managers are combined with their analysis of business information. While c urrently in Zara, decisions are solely based off of experience with no use of business information to range inferences about pattern and trends. The primary two problems with such method are that those decisions tend to random and also, heavily biased towards personal preference and beliefs. A company like Zara cannot afford bad decision when its comparative advantage lies in producing clothes of the future.Below are the few examples of random decision making within Zara which commit resulted in wastage and time lag and possible solutions to eradicate them. First, the decisions about Zaras production based on random experiences can be very speak toly. Currently Zaras store product managers, who decide what new design is approved in Zara, largely rely on their random observations of what people are wearing and conversations with Zara store managers to predict the next big fashion hit. However, decision making on the creation of experience alone tends to produce more misses that h its.And for a company like Zara which heavily depends on rapid production of latest fashionable clothes, fashion misses can be extremely tollly. The ideal situation would be to allow business managers to combine their experience with valuable business information to realise business strategies and then apply them to decisions about future fashion trends. Similarly, the move up of commercials within Zara to decide the apportionment of replenishment, highly demanded clothes in SKUs or DCs and most importantly, newly designed clothes is misguided.The current practice within Zara regarding allocation is to divide the available stock among all the Zara stores who wanted it. The critical problem with this approach is that it ignores the concept of opportunity cost. For example, lets exact that using a detailed analysis, a commercial within Zara concludes that a piece of clothing A is highly demanded in London than in Bahrain. With this information the Zara commercial can push clothin g A exclusively towards stores in London where it is highly demanded at the expense of stores in Bahrain.Rather than allocating among all stores, the approach of using business information to decide which stores have higher opportunity will be better for Zaras bottom-line. Conversely, when the demand for the clothes exceed supply the Zaras commercials allocated by looking at past performances and previous supply records. Although, this method is significantly better than the simple allocation, it could be much better if the commercials used further scenario analysis using previous business information to check if the success of the stores were a one off events or whether previously unsuccessful stores have turned a corner.Possible solutions Zaras main problem stems from its lack of infrastructure that is able to collect, store and communicate data so that all the responsible individuals within Zara can use it to make good individual decisions. Among the myriad of a Network options with the aforementioned capability, In my analysis, could computing is ideal for Zara. The advantages associated with using the cloud is its scalability. In the near future, Zara aims to expand its stores and its operations to new locations all across the globe.With a cloud based software the increased need to collect, store and share data within the Zara network will be as easy as buying extra space from the a cloud hosting services. In addition, cloud computing almost infinite amount of storage to store and backup data. This will be ideal for Zara who has a large number of store spread across many continents. Furthermore, unlike a distributed network, with cloud computing Zara store managers, commercials and store product managers can share common application software directly from the cloud without having to purchase or physically transport the software.However, security of the highly sensible data is a big concern when using cloud computing. Unlike a pervasive network, there re mains a threat that a close competitor in the industry unfairly accesses critical business information such as Zaras new clothes design or cost of production, suppliers list, when using cloud computing. Final Recommendation My last(a) recommendation for Zara aims to tackle two big problems within Zara a) absence of technological infrastructure and b) lack of collecting, storing and sharing vital business information to make quality decisions.My first recommendation for Zara is to build a sophisticated technological infrastructure across the company. Zara should replace its old MS DOS based POS with a Windows based POS with advanced features such as touch screens, bar code reader and credit card to increase the overall efficiency and speed of transaction. Also, the development of a customized software that automatically stores detailed data about the transaction such as type of design, time (days, months), and cost automatically from the POS system and saves it in a cloud space.Als o, I would recommend the use of tablet, preferably android, for individual store managers so that they can have easy access to vital business information in real time and also be able to communicate with the central office and DCs. Furthermore, I would even suggest providing tablets to all commercials and store product managers so that they can have access to particular(prenominal) and vital information about all aspect of the business directly from the cloud. The analysis and interpretation of all the information will enable them to making production, future design decisions, and allocation decisions.My second recommendation for Zara would be to subscribe to a cloud computing service provider in order to store all relevant data from all its stores, its DCs and SKUs. Also, I would suggest Zara to build customized software that has the capability to correctly organize relevant data into different categories according to specific need of different management levels within Zara. Regar ding the security issues with using a cloud computing, Zara can enforce cloud storage access word of honor on the basis of seniority in the management hierarchy.So for example, a temporary sub-store manager cannot access the future clothes design for Zara mend a commercial has a full access. However, I would not recommend Zara to get involved in selling clothes online. Zaras comparative advantage lies selling clothes through it well designed and strategically located stores that span all over the world. Thus, unless Zara can build up huge storage and distribution centers, hire e-commerce specialists and figure out a new business model, I wouldnt suggest Zara to go online.inside the current organizational framework, going online would do more harm than good. The performance of these two recommendations will insure that all the members of the management team have all the vital business information in real time in order to make an informed decision. Also, it will insure that Zaras s tores serves dual function efficiently serving customer and also providing important data back to the head office in Spain. 1 . expect Keeping Unit 2 . Distribution Centers