Information System in Zara

INFORMATION SYSTEM: ZARA CASE STUDY
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Information System: Zara Case Study
Introduction
Zara has remained a leader in the fast fashion sector due to its ability to frequently update its designs and speedily deliver them to the end-users. In addition, Zara’s competitive advantage has been derived from its vertical integration in manufacturing and its quick response to changing, unpredictable consumer needs (McAfee et al. 2007, p.7). These have been its core competencies. Although not very defined, its information system (IS) has also given Zara this competitive advantage. Zara’s IS is internally developed to cater to its unique operation, and this has been Zara's critical core competency. However, its current IS lacks certain functional capabilities that could further enhance its competitiveness and is a bit outdated. According to Porter and Millar (1985, p.13), companies that respond to changes in the information technology revolution will have a competitive advantage, while those that fail to respond will always be at a competitive disadvantage. While Zara uses a functional IS infrastructure, it has failed to exploit all the potential benefits of information technology and IS that can be derived from using current technology. To address this issue, Zara needs to upgrade its IS infrastructure and, more specifically, its Point of Sale (POS) to ensure it is using the current operating system and avoid the possibility of having obsolete technology in the future.
Key Issue
The information system is customized to meet Zara’s unique operations. This core competency of Zara’s IS facilitates the company’s operational efficiency, allowing it to meet the fast-changing needs of its clientele. According to Aydiner et al. (2019, p.170), IS competencies include delivering solutions and enhancing operational efficiency to give a firm superior performance compared to competitors. Zara’s IS facilitates ordering, fulfillment, and manufacturing to ensure speedy delivery of clothes to the end consumer. Personal Digital Assistants (PDAs) are regularly upgraded to increase ordering efficiency. Further, the POS terminals and applications are easy to use and install, respectively (McAfee et al. 2007, p.10). This increases operational efficiency among managers and employees because they hardly need IT support to use the POS infrastructure.
However, Zara’s POS terminals are not current because they rely on the DOS operating system, which faces the risk of becoming obsolete (McAfee et al. 2007, p.10). The problem with these POS terminals and the DOS operating system is that it can put Zara at a competitive disadvantage. According to Saeidi et al. (2019, p.11), outdated technology poses more challenges than benefits to organizations, mainly because organizations now operate in a highly competitive environment. They must strategically utilize resources, such as an improved IS, to gain a greater competitive advantage. Therefore, Zara can upgrade its current IS to increase its competitive advantage. A newly upgraded POS infrastructure will allow Zara to utilize IT in different areas of operations, especially in the store. As Saeidi et al. (2019, p.4) reveal, firms gain a competitive advantage when their IS infrastructure allows them to create, transfer, and use data for effective and timely decision-making. In addition, Chan (2002, p.103) indicates that the IS infrastructure should be flexible and adaptive to the changing needs of the business. In the absence of this flexibility, the firm faces IT alignment issues. Maintaining an outdated IS, which Zara has done, can hinder the company from responding to changing needs of the business. For instance, store managers want a system that allows them to check inventory balances, yet the current infrastructure is not flexible enough to accommodate this functionality.
In addition, Zara still faces other business IT alignment challenges. For instance, the current IS infrastructure does not facilitate in-store networking between the PDAs/POS, nor does it allow stores ...