Zara

To: From: Date: SUBJECT:

Dr. Michael Williams Jared Weidenbaum MBAM 613 3/23/2007 Zara : IT For Fast Fashion

Comment [MLW1]: Great job, Jared! 100%

This recommends a course of action involving the upgrading of POS terminals, the addition of speedier wireless modems, and the functional augmentation of Zara’s current IT system to Inditex. These changes, while attempting to keep theessential human-centered culture of Zara, will initiate necessary and market-driven improvements to the current system. Implementation will take place within 30 days of approval. Improved reaction time to trends, quicker responses to store inventory levels, strengthened competitive advantages, and more effective communication will result from these actions. These changes will not only enable Zara to keepup with the state of the industry, but will also facilitate the company’s continued commitment to future growth. Background • Zara’s POS terminals are currently being run on a DOS-based system (which is barely supported anymore) • The current culture places importance on human conversation-based fieldwork, intuitive analysis, forecasting (via Commercials), and decentralized decision-making. • TheOld World mentality of some Zara managers asserts that the old, but operational, system is not broken, and therefore, not in need of fixing. They are only half right. • Since the business model places an emphasis on a rapid response to trend-influenced customer demand and relies on no advertising, growth through IT-fused change contrasts with both the existing processes and the culture which madethem. Recommendation • We are going to install modern POS terminals in each Zara store, strengthen the human network that has made Zara a fashion mecca (quicker wireless connections will facilitate instant communication), and train employees on the non-DOS based new commercial software. • Our objectives involve the alignment of our forward-looking fashion senses with similar forward-looking POSterminal updates. We also aim to facilitate the exchange of critical information (via store canvassing, telephone conversations, and experience-driven intuition) with non-dial up internet connections. We aim to have solidly reliable inventory numbers from which to make judgments. Finally, we aim to train our employees to be just a savvy with technology as they are with fashion. Basis forRecommendation • Zara is the last remaining proponent of DOS. While this Old School approach to garment making is commendable, we cannot afford to be left behind the wave of our industry’s technology. It is assumed that our competitors have adopted commoditized and industrywide technological advancements. Modern operating systems and internet connections are no longer luxuries, but prerequisites for notonly survival, but growth. • If we intend to continue growing, we must address the imbedded relic of DOS and the reliance on it that we currently have. If we do not make this change now, all of our hard work following trends, learning geographic preferences, and designing premier fashion will be in vain.

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We intend that these changes will not run counter to the current company culture butenable it to flourish. By facilitating technological fluency amongst employees, we can nurture the feedback loop and have more accurate inventory numbers on which to base judgments. Discussion: We have faith that Casellana (a former IT manager) and Ortega will give us their support. It has been said that it will be too much of a hassle to send IT professionals to each store for installation tasks.However, a team of Zara interior design representatives already visit each store upon its opening. It is quite effortless to simply include a single IT professional from La Coruña in the store-bound entourage to assist with installation needs. Next Steps: During the next thirty days, Inditex will purchase brand new POS terminal hardware and software. Commercial operating systems will be installed...