Saturday, March 1, 2014

Zara: IT for Fast Fashion Reflection

Reflection:

Memo

Dear Salgodo and Sanchez,

After meeting with the consultants about the dilemma our company is currently facing, my understanding of this situation is now clearer. The consultants we hired gave an impressive presentation yesterday. We explored the matter further in the follow-up discussion after the meeting. I want to emphasize to the board that we must carefully consider any decision we make at this point. This decision could impact and reshape our current business model and it can also hammer the culture of the company. As I had mentioned in the past, any change that has a dominos effect can have a drastic effect on the company either positively or negatively.

This meeting has reassured me that we should not change existing POS system. Consultants also presented an excellent idea of keeping a one-year inventory in stock that could give us some cushion while we upgrade our POS system. The main question is: While our company is growing rapidly, should Zara continue building its empire using obsolete operating system? I am sure that even Mr. Sanchez who trusts the current POS system would agree that we will soon need to replace it with a new system that is compatible with the current technology. 

While I was working in a bank, we came across a similar dilemma. We had an outdated software that was not meeting bank’s needs.  The IT management decided to continue using the current software while developing the new software. Once the new software was developed and tested, it was released to production environment in all branches. Before attending this meeting I was thinking along the same lines that while our current DOS system remains fully functional, Mr. Sanchez should work in parallel to develop and upgrade to a newer POS system.

The consultants highlighted a good point that although our vendor has not explicitly announced that it will discontinue supplying the DOS compatible POS system, it did not contractually agreed that the legacy system will be supported in future. Since the fashion industry requires a quick response to new trends and we must have a fast, dynamic POS system that can track real-time inventory and has a full vertical integration. This will make us stand out of our competition.

Following our core values, our decision for POS system should be based on factors that consultants mentioned in the weighted key decision criteria. We cannot rely on this obsolete DOS system for too long because of its limitations with new technology. We need a POS system that is dynamic, fully compatible with the latest technology, has added features catering to our industry and capable of handing real-time data for analysis and reporting purposes. I strongly believe that it is now crucial to upgrade our POS system but the change must be planned carefully so it is seamless and least disruptive to our daily operation. We can accomplish this by hiring an IT specialist who can work with Mr. Sanchez to plan, develop, test and implement the new system.

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