Zara IT Case Analysis Questions
3. What current or potential weaknesses (if any) do you see in Zara’s current IT infrastructure, IT strategy (planned improvements/additions to their existing infrastructure), and the process (who all are involved in the decision making for investment in IT and how often they meet and steps they go through to arrive at the decision) used to formulate the IT strategy? The obsolescence of the DOS-based POS system for one. Similar to Windows XP, everyone was so comfortable using this OS that when Windows offered improved Operating Systems, few were quick to jump onto the train. This is not uncommon as resistance to change is a pervasive element in modern industrial settings. The company has no CIO and no formal processes of establishing an IT budget or making decisions on IT issues. The decisions are left to business personnel, which as we have ….

4. How would you advise Salgado to proceed on the issue of upgrading the POSterminals? Should he upgrade to a modern operating system? Should the POSapplications be re-written to include any additional functionality? If so, what functionality?

The current POS being used by Zara is effective, and easy to roll out and maintain overtime. It is users’ friendly and easy to operate. It does neither require IT personnel to travel from one store to another nor to set-up IT unit in each store. It allows store managers to easily install software, set-up and maintain POS infrastructure themselves. In fact, in the event of any problem, a compartmentalization of POS is straightforward. In spite of these advantages, Zara is still facing some challenges on IS strategy that will align with its business strategy such as inaccurate inventory management, no real time sales report to the headquarters, and no real time available information of particular SKU within stores.We propose two strategies that Zara can utilize to meet its short-term and long-term business challenges and opportunities that is related to its POS. First, to achieve short-term IS strategy, Zara needs to keep current POS terminals while adding additional functionality that align with business strategy such as better inventory management. Second, in a long-term Zara will definitely need tou pgrade the POS terminals to a modern operating system. This is importantbecause Zara faces the challenges of obsolete information system, and inability tocontinue getting the DOS infrastructures to support the IS. In addition, it can becomplex and more expensive if the upgrade is done later than now especiallywhen the upgrade is the only choice available to sustain its business strategy. Zaracan achieve the full upgrade through gradual process.POS applications should be rewritten to include all functionality such as orderingand reports provided by PDA. In addition, ability to know the information aboutthe SKU in stocks in other outlets without making phone calls should be includedas well.