Info 563 Case Preparation: Zara

Problem/Issue Statement

Xan Salgado Badas and Bruno Sanchez Ocampo are the heads of the IT department for Inditex, a multinational clothing retailer and manufacturer, which is headquartered in La Coruna. They discuss the point-of-sale terminals used by Zara (Inditex’s largest chain of stores).

Salgado worries –

-          The hardware vendor for out POS terminals could upgrade their machines or some peripheral for them, so that they’re not DOS-compatible anymore.

-          Zara wants more options, which include being able to look up inventory balances in their stores and other stores.

-          Zara builds a larger company on top of an exceedingly obsolete operating system.

Sanchez opinion–

-          There are no problems with the current system

-          New stores can open up faster because there is no IT involvement

-          Which do you think Zara should rather have?

o   1. A basic POS application that always works

o   2. A fancy buggy one

Situation Assessments

-          Zara is working with an outdated POS system that is no longer supported by Microsoft.

-          The POS system that Zara uses is limited in the possible improvements to the quality of their system.

-          There is no link between Zara’s chain stores to share information.

The criteria to port the POS application to another OS –

o   Cost of switching to the OS system

o   How it would affect the business during the transaction

o   How it would change Zara’s business methods

List of Plausible Alternative Courses of Action

For Inditex, there are two potential courses of action for Zara

-          Salgado alternative

o   Changing its current POS system to something that is more current in technology

§  OS system

·         Windows

·         UNIX

·         Linux

o   While having its Pros/Cons in the beginning, it will resolve many problems and issues that Zara is currently having. It will open up many options for the company depending on the current market or technology (i.e. opening up an online business).

-          Sanchez alternative

o   Zara keep using the POS system

§  Not worrying about the cost

§  Not worrying about actually having a problem with the POS system itself.

Evaluation of Alternatives

-          Inditex must find an alternative that works best with the criteria that Zara is concerned with while also allowing for Zara to accomplish its goals. Since the alternatives are laid out, Inditex must do their research to see which alternative theoretically fits them best.

Recommendation

-          I believe the most logical recommendation to solve Zara’s problems is following Salgado’s advice. Even though Zara has no problem with POS system itself at its current status, eventually the technology will catch up and require Zara to upgrade from their current POS system. For a fast growing corporation like Zara, they should improve their system now rather than waiting until they actually hit a problem.