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Zara Case

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According to the point of view of Salgado , Zara is getting bigger and bigger and its operating system getting more and more obsolete. Thus, it gives Zara to have a comparative advantage because for a strategic perspective. Although Zara's advantage over its competitors is not so much a result of IT leverage, the sustainability of its competitive edge might be at risk due to a lack in IT investment.The current assumption for the IT investment states about 18,000 hours. The Zara's staff devoted to IT contains about 50 people divided in several departments. So we can suppose that only 10 people are devoted to POS software and so 10 people are able to handle this project. With a brief calculation, we can figure that it would take too much time to set up this project with an internal team. That is why we are prone to think that externalize would provide a more efficient solution, completely handle by an outsourced professional team. It could be a little more expensive at short and long term that is why if we choose this option we have to integrate a training system of our staff to lower the outsourced fees. An important point is that Zara has always developed its own IT solutions and if we make it through subcontractors we are not sure that it would match with Zara values or way of doing. Zara has been used to make it alone. Thus we think that some member of the IT staff could work with subcontractors in order to lower these expenses and help them to create an It solution which fit in Zara's practices.

The analysis of Zara’s activity reveals that its main strategy is the ability to give a quick answer to target customers’ demand and its capacity to anticipate the customers’ trends. Zara is able to identify new trends and to satisfy the demand of customers with its value chain system that is really effective and its structure very organized. The system that they have worked with has been easy to maintain and very effective. Thanks to that, the company decided to continue with this system without changing anything. Nevertheless Zara is now confronted with a problem: their POS system runs on DOS and Microsoft doesn’t support this system and also the POS terminal won’t be compatible with the current POS software. But, change is inevitable because even if changing the system don’t urgent, the company needs and it has to invest in IT infrastructures because MS Dos is an obsolete technology and their POS terminal doesn’t guarantee that they will continue to supply the same terminal without any changes in the present hardware.

PDAs (Personal Digital Assistants) which are used in all Zara stores and POS terminals are not connected with Zara’s headquarters or with other stores, moreover there is no in- store connection to link employees’ information like daily sales and the employees have to copy this information on a disk. Changing the system should fill this weakness of communication. The the main needs of the company are an actualization of the IT and the improvement of the in-store connection and the connection with the company’s headquarters. So, we can say that change is unavoidable because such a company cannot continue to run with obsolete and unconnected technologies. So, it is clear that the improvement is necessary. With have to choose now between the different options that are available with this solution. The Windows, UNIX or Linux are the most common and stable operating systems that could be chosen to address this problem.

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