Zara : IT for Fast

Fashion

Section G - Group 9

1. What is Zaras business model? What information does

Zara need to operate its business model?

Current or potential weaknesses (if any) do you see in Zaras

IT infrastructure and IT strategy?
POS system runs Microsoft DOS and Microsoft doesnt support the DOS also new
POS terminal wont be compatible with the DOS
MS-DOS is a obsolete technology and There is no contract mentioned with POS
terminal vendor to supply new POS terminals compatible with MS-DOS
It was high time to Upgrade both POS applications hardware and software
because there was a chance of loss of support from the vendor
Also the current application has several bugs and much time of IT team spent in
troubleshooting/bug-fixing
Headquarters and the commercials of ZARA are not connected to POS and PDA
terminals of stores
Since the Applications has been built in house aligned to specific business
requirement , integration among the individual application was a concern for
ZARA
As IT systems were not integrated and the technology was becoming obsolete, it
was difficult to upgrade POS software and terminals
POS terminals were not connected to one another via in-store network
Intra-store connectivity and connectivity between POS terminal and PDAs was
unavailable, so sharing the information across and within the stores was difficult
If all the stores were connected through internet/intranet, every location could
know the theoretical inventory of all its SKUs

Advice to Salgado on the issue of upgrading Zaras POS

terminals?
Sanchezs advised to Salgado is not completely erroneous due to some fact like
lower staff to stores ratio, high growth and in-house capability of developing DOS
software (As mentioned in Ex.4) However, we would advice Salgado to upgrade Zaras
POS terminals and other hardware/software for the following reasons:
Drawbacks of current system
Store personnel had to move across the store to get information about the stock
levels, because their existing POS system was incapable of managing this data.
Only One POS terminal had modem and rest of POS terminals were not inter
connected . Hence, to transmit data to LA Courna, Employees had to carry data in
floppy disk to the main terminal.
The main POS terminal which was connected to La courna, could only transmit data
after the end of business day, instead of a 24X7 connection, which was necessary for
the kind of fad business Inditex were in.
Microsoft stopped giving support for DOS OS. Also, a few vendor mentioned that Zara
was their only customer using DOS. They were reluctant to give assurance of not
changing their terminal maker. This proved as a liability to Zara because Windows,
Linux and Unix were rapidly growing.
Zaras supply chain process was supposed to hold no excess inventory at DC level,
due to lack of back room facility. To address to such a fast and lean SCM, they could
face problems with their current IT system.

Advantages of upgrading IT system

An updated POS application could incorporate better
functionality allowing store personnel to use a large screen,
keyboards and mouse to quickly execute returns
transactions.
With an updated POS with wireless network facility, would
make data transmission process much easier, and there
would not be any need to carry floppy disk.
Store could request inventory transfers from one another
online , eliminating the need for phone calls to see if an
item were in stock.
An updated IT system would make it easier for Zara to
expand globally as DOS would not be supported by store
operators in many countries.