ZARA :: IT for Fashion

Submitted by
Akshay H. Nair
Mohit P. Sharma
Nikhil Barthwal
Vishwas Gowrinathan
 ZARA: IT for Fast Fashion

Zara, the most valuable brand of Inditex group began

retailing clothes in 1963.
By 2011, Zara had around 2000 retail stores around
the globe.
Zara followed its core philosophy that quality and
creativity, satisfying the response of demand yields
favorable result.
Zaras business model was to instantly respond to
demands of the consumer, spend more on retail
stores rather than on advertising & expanding their
stores globally.
The operation comprises of ordering, fulfillment,
design and manufacturing.
 ZARA: IT for Fast Fashion
Zaras approach to IT was similar to its view on business
decision making was decentralized, and speed was a
crucial part.
Zara had no chief information officer and no formal
process for setting an IT budget or deciding specific
technology investments or projects. What the company
had was an IS department of approximately 50 people.
IS department was divided into three groups: Store
Solutions, Logistics Support, and Administrative
Systems.
The stores have PDAs which was succeeded by POS and
handheld computers which could communicate with
headquarter in La Coruna.
The POS terminal OS was outdated and unsupported by
the provider.
IT department has to decide whether to go with change
or continue existing POS terminals.
 Problems Need To Be Addressed By IT Team
1. Primary problem:
. Inditexs IT head, Xan Salgado, wants to
upgrade the existing POS system of Zara.
However, Bruno Snchez opposed that
installing a new buggy POS would be a liability
for the company. Should Zara upgrade their
existing operating system to a more modern
system?

2. Secondary problem:
If they are not migrating to a new OS,
should they stock current POS terminal
to protect them from sudden loss of
vendor support. If they migrate to a
new OS, can they use the opportunity
to build new capabilities in POS?
Objective of Zara IT team

1. To identify the alternative solutions for the outdated POS

system.
2. Ascertain pro and cons of each alternative.
3. Evaluate which alternative is better for Zara, and how the
chosen alternative will affect the existing supply chain.
 Points Of Consideration
1. Availability of DOS terminals:
Zara has been using DOS-operated POS to integrate their different business functional
domain with retail stores. However, MS DOS is no longer supported by Microsoft. Although
vendor has assured the availability of DOS-operated POS, there is always fear of replacement
of those terminals with advance OS terminals.
2. Adaption: Zaras ability to adapt merely relies whether or not the company should choose
to upgrade and reap its potential benefits, or just keep its existing OS and save itself from the
risks it may bring.
3. The monetary cost in upgrading the POS terminal should not be too high.
4. Timeframe required to transit from old terminals into new should be minimum and the
implementation should be phase-wise, thereby not disturbing the sales in the stores.
5. Provide training to their employees working in retail stores worldwide on new OS systems.
6. To test if the new system will be reliable and to consider the risk involved in the transition.
7. The new system should support Zara business model.
Suggestions
1. First alternative: 2. Second Alternative:
Maintain the existing system to avert the Upgrade to a developed system which
company from the possibility that it would would help business operations i.e. order,
make decision that would result to more fulfillment, design and manufacturing.
cost than benefit. With this up gradation there will be better
Pros Cons communication between worldwide stores
which will improve inventory
Easier to use Less functions Pros Cons
management.
Maintenance cost No vendor support
Improved inventory High Cost
is less
management
Employees are Not interrelated
Better customer Hiring more IT
familiar the OS with latest
service employees
technology in IT
Swift communication High maintenance
between any stores costs
with the HQ
Faster operations