Zar It For Fast Fashion

903 Words4 Pages
ZARA: IT for Fast Fashion Current status of Zara IT Infrastructure and investments: Zara has historically made minimal investment in IT. Its competitive advantage over other competitors is not because of its IT infrastructure but because of its integrated supply chain and faster response to the changing customer taste. Zara’s approach to IT was consistent with its decentralized decision making process. It has proved to be remarkably stable, effective and easy to roll out and maintained over time. But in order to maintain business competitive advantage, a cost-benefit analysis is must before making any decision to invest in up gradation of IT. Cost-benefit analysis: Cost: The POS terminals used in Zara stores were based on the DOS system,…show more content…
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. Intangible analysis: Cost: Zara’s competitive advantage of efficient, fast and highly responsive supply chain may be at risk due to fast changing complexity of market environment. Loss of information due to older system may impact its revenue. Making phone calls to other store managers for checking inventories, is less productive and time consuming. Small screen of the PDAs make it difficult for the employees in the stores to use them for ordering purpose and are vulnerable to making errors. Up gradation of the current system require training of the employees which may take several days or months. There should be positive inertia among the employees to accept the up gradation of the current system. This much required inertia is lacking currently which may a threat to the success of the change. The store employees are comfortable with using the current system. The acceptance of the new system may take

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