How Zara Information System Work

Zara has inadvertently taken an operational approach to mitigating risk through having decentralised stand alone store systems that interact once a day with headquarters therefore requiring little protection and staff only having limited access and control over their part of the system, not a network of data (Austin and Darby,

As technology developed to be ubiquitous, the expectations of customers have grown correspondingly. Companies are now able to become global and complex easier than ever. Competition for consumer’s demands is growing on every front, forcing businesses to modify or create new business processes in a much faster timeframe than ever before. While ZARA originated in Spain, the company has stores in 86 different countries around the world.

In today 's corporate world information system has come to play a very critical role in a business. An information system is used to collect, processes, store, analyse, and disseminate information for a specific purpose. (Turban, 2004) It includes inputs and outputs, and it processes the inputs by using technology, normally

Information systems (IS) or Business information systems deal with the development, introduction, conceptualization, utilization and maintenance of systems for computer-assisted data processing within the enterprise-wide and company networks.

Benefit: The current IT infrastructure has enabled Zara to report a net profit margin of 11.02% in 2002 and also has helped reducing the operating cost by efficient utilization of its supply chain. The up gradation of current IT system will enable Zara further improve its efficiency thereby increasing its revenue. It will enable improve its inventory management system because rapidly growing market may make it difficult for the current old IT system to maintain the same level of efficiency.

Firstly, Zara can introduce new product rapidly. According to Loeb (2013), Zara owns groups and teams which are focused on designing and managing for the business. Those teams and groups will track the preferences and buying behaviour of their customers and collect customers’ feedback to make a quick decision and start designing for next collection. They superintend all about the designs and products and come

An organization creates value through time, particularly if it is a company that provides services. Therefore, the information generated has an even greater value because it helps to achieve the objectives of the organization. All the information that the organization generates interact together to support the company needs to fulfill. On the other way when organizations interact with information, people and resources (network, hardware, software, etc.) they connect each other in order to meet the demands of the information in an organization either administratively or in the operational area. Consequently generating a process called information system. This information system performs four specific functions: input, processing, storage and output of information. Inputs is when you add customer information on a computer (hardware), such as name, address, invoices, payments, etc. Then in the same way in the process step you can make calculations, balances, interests that can store in a software grouped by customers, per the accounts, per month bills, etc. and finally, outputs are when you generate reports of payments, balance, inquiries or customer statements. In this paper I will describe how the information system contributes to forming competitive advantage in business.

Information systems are used to save valuable time and money by eliminating the bulk of manual labor. These will also provide many options from communicating with both the employees and the customers to the elimination of many tedious inaccurate processes.

Information systems take a firm’s information and organizes it in an order that allows the company to access reports and important data. The system is usually organized based on what the company needs and the functions of the business. They can be for a specific function or built to encompass multiple systems that can accommodate all business functions. To build an effective management information system, you must fully understand how the business works, and develop a system that improves the way the firm uses the data to accommodate the company’s business processes. When the firm decides to develop a new information system it will bring about changes throughout the entire organization. The individuals responsible for building the new information system will affect the organization as a whole by changing the skills necessary to do the jobs, the way functions and projects are managed and the organization as a whole.

Information system (Laudon & Laudon 2010) is a collection of software, hardware, and data organizations use in monitoring, controlling, transacting, forecasting, problem solving in various levels of management. These systems converts data into information to facilitate the organization in hastening their process in various fields. These systems aid operational level, middle level, and executive level managers in their day to day tasks.

Zara is one of the Inditex’s largest international fashion brands. The company first opened in La Coruna in 1975, still lives by the simple idea of Amancio Ortega to link customer demand to manufacturing, and link manufacturing to distribution. Castellano and Ortega shared the same beliefs that quick response to customers, use of computers, and disintegrated decision-making were important to build the business. It has built distribution and information system which allows to keep latest design in stores in just one or two weeks. Its supply chain has made it so successful and popular among its customers (Zhang, 2008).

In recent year, Zara is well-known as the world’s largest retailer and the most favorite fashion brands in the world to the people in their 20s-30s and children. Its success doesn’t come from just only what it sells but how it sells them.

Zara group uses management systems based on electronic communication or automation processes, which can mean positive effects on socialization, externalization, internalization and combination processes of knowledge management. (María Teresa GARCÍA-ÁLVAREZ, p.994)

Similarly the business firms uses the information system such that to interacts with the customers and the suppliers, to manage theiroperations, manage the accounts, fast way to intracts with the customers and the suppliers. In information system, the process works in the form of input and output. The output generated is the desired result or the objective that the firm want. Based on that output the other process continues.

In the discussion section, an analysis of Zara’s existing product and service will be listed and an S.W.O.T. analysis is done to figure out the company’s current situation and position in the marketplace.