Zara is a retailer of mostly women’s fashion based in Spain which has found a new competitive advantage- using process to give customers the fashion and styles they want, rather than trying to sell them what was produced. Zara’s produced goods after they knew where customer demand lies. Early computer systems assisted with this endeavor. In 2003 the information technology infrastructure of Zara stores was outdated; on the other hand, there were currently no risks as the existing system continued to work very well. The question is what should drive the decision making regarding information systems for that company at that time?

Decision criteria
Three decision criteria are important to ensuring that the best choice is made. These are meeting expectations of expansion, increasing efficiency and agility and whether the process aligns with the longstanding successful philosophy of Zara.

Any decision to change or to maintain the status quo must be considered in light of the expectations of considerable international expansion. There are many places where Zara can increase its store density and new international markets where Zara can expand. On a large scale it does not make sense to implement a solution that will not work with expansion, meaning that it would affect viability or costs.

A second requirement is that the decision must further the goals of fast fashion, ensuring agility in responding to market demands. This would be met by new functionality that enables business intelligence relating to distribution or trends, and it would fail to be met if it interfered with or lowered current automated support. A particular area for improvement is inventory control.

A third requirement is that the approach itself must be aligned with the original strategy of agility in meeting the challenge of fast fashion. Examples of this can be seen in the sharing of decision making and responsibility as well as ensuring the advantage of efficiently producing what the customer wants, when they want it.

Alternatives
The first option is to maintain the current system. This would require minimal resources, and it would not involve any change to processes. A variation on this option would be to make small changes to the existing system to increase functionality.

A second option is to begin designing a new system. While in the early days of the company it was difficult to find off the shelf IT solutions, today there are many that could be customized to meet their specific needs. The existing IS team in La Coruna might consider contracting for some of the development activities where this activity creates a new demand on their time, but also to keep costs low and perspectives broad by outsourcing some of the analysis and development work.

Analysis
Maintaining the current system might be a nightmare, given the lack of compatibility to the decision making requirements. It might not be viable to order and install outdated technology during expansion. Data technology had improved automated inventory control, and maintaining the current system would not allow Zara to take advantage of that. Third, given that it was possible to increase the competitive advantage of agility and speed to market with a decentralized approach to decision making in the design of the system, failing to do that is an opportunity cost.

Designing a new system would capitalize on the advantage created by the fact that the current system continues to perform well as the basis for determining new functionality and capacity. It takes considerable time to map old systems and new systems and then determine how that translates into new business requirements. By starting now to develop a new system that is compliant with modern technology there is an opportunity to continue the practice of competitive agility that led to Zara’s success in the first place.

The Zara story indicates that its success has been driven by taking a different perspective with regard to fashion which prioritizes selling people what they want rather than trying to persuade people to want what they have to sell. Just in time distribution was a critical part of this philosophy. Both of these ideas can be better supported through new automated processes. In particular the current inventory practice of walking around the store to determine an order can be vastly improved on. Not only is it necessary, for efficiency, to know exactly the level of inventory at one’s own story, it is good to be able to check inventory at another story when one store is short. Headquarters and the Commercials could use this information in new ways, such as flagging when certain sales criteria are met that would flag an item as trending.

Recommendations
In order to meet the decision making criteria of appropriateness for expansion, supporting fast fashion agility and aligning with the longstanding philosophy, the best choice of action is to begin designing software and processes to replace the current POS system.

Now may not be the time to make the change, however the design and testing process requires considerable lead time, particularly if there is new functionality. For that reason the process should start immediately.

Another important approach that will build on the long held philosophy of leveraging the knowledge in the stores would be to fully consult with all internal stakeholders regarding the expected functionality. The right point of view would be to see a new point of sales network much in the way that fashion is viewed- give them what they want, instead of delivering a product and persuading them it has value.

Conclusion
At the beginning of the case study Badas and Ocampo debated the merits of upgrading the 2003 POS system. Their discussion did not seem to take into account the length of time required to design and test a new system. Rather than implementing changes to the existing system and the waiting to see if they work, as assumed in that discussion, it is better to have significantly lead time for design and testing, so that the best possible system is created and it works.