To: Richard Peterson
From: Anna Szperlak
June 30, 2014
Problem/Issue Statement
The
problem which Zara is currently facing is the fact that it is using DOS
operating system, which is no longer, supported by Microsoft. Should Zara stick
with their current system or implement a new one? DOS does not require a lot of
computing resources, what makes it easy and cost efficient to maintain, also
its been working well enough for the company to do their day to day operations.
Since 2003 DOS has not been supported by any vendors, what makes Zara’s
operating process less efficient, which will eventually eliminate future
growth. Also, if Zara continue using DOS it will be harder to keep up with any
new market trends and fast developing technology that customers are looking
for.
The symptoms are
pretty obvious. Zara is operating with an
unsupported DOS based POS terminal system. This results in operational
inefficiencies whenever an order is being placed and fulfillment since the POS
application does not support a network connection between stores. This very
manual process also causes ineffective use of store employees’ time; when
placing orders - sales managers would have to actually walk around and
physically count what was sold then transmit that information on a PDA. Another
issue is the culture of the stores. It seems like that before applying any new
initiative Zara’s planning and organizational assessment has to be improved to
be effective.
The scope of the problem is
that the firm is not supported with enough data and resources even for the
management to make effective decisions. This also affects the customer service
since Zara is not able to connect and see the inventory availability the
neighbor stores have at the moment. The company must decide on their further
steps; Zara simply has two choices. The
first one would be, to remain with DOS and pay nothing that means no change, or
to spend a significant amount in terms of hardware, training and IT work.
Situation Assessment
The company
has to decide whether to keep its current system, upgrade what’s required for the
modern operating system or completely upgrade their operational infrastructure.
How would those decisions affect their future growth? What will be the cost
cuts associated with completely upgrading to a new system? Will there be
training and maintenance necessary after the new implementation? Those are the
decision criteria that Zara is facing and has to analyze.
List of Plausible
Alternative Courses of Action and their Evaluation
1. Continuing the use of DOS
to avoid additional cost and training; however, no improvement in term of
effectiveness.
2. Purchasing enough of the
current POS terminals at the time - will let Zara to continue their operations
without worrying about the hardware vendor’s inventory and production. Still
doesn’t not resolve the networking between stores problem.
3. Integrating
new operating system such as Windows or Linux - possibility of networking in
between the stores and its headquarter, as well as faster PCs for completing
returns and orders. This will allow the company to use better reports, which
will result in more efficient planning. On the other hand, new operating system
will require additional training and financial resources.
4. Upgrading
Software procedures for better functionality will benefit customers and
management because processes will be faster and more functional.
5. Buying modern PCs that
will increase capabilities of store management - this will allow the mangers to
follow and analyze the market trends and customer demand as well as track the
inventory.
Any
implementation has challenges, though the key is to know how to addressed those
challenges. A new system would eliminate the lack of support issue that Zara is
facing and provide other features to help the store managers to more
effectively run their operations. Upgrade to more efficient operating system,
would also allow Zara‘s mangers to focuse more on customers’ satisfaction, and
find what they are looking for to better assist them and set up a long lasting
customer base. Of course there is a high cost associated with most of the
alternatives so the question is what would bring the most return? Is this the right time to make a change? Since the current
POS application is working well, with no IT assistance needed? I believe staying
with the old system and not taking any intelligent risks can lead to missing
opportunities for growth.
Recommendation
A quality
recommendation is to implement the modern OS, upgrade the hardware and enhance
the POS application. Although this would be one of the priciest decisions, it
seems to be the best alternative for Zara and their long-term expanding possibilities.
Even though their current legacy IT system has been working until now its
future is just not promising. Innovation and creativity are very important in the
fashion world and the opportunity of being able to respond quickly to any new
trends is very significant and results in high revenue. Knowing that there are no guarantees and that
the hardware vendor will continue to support Zara’s current legacy system, upgrading
it would be the most logical decision.