Zara: IT for Fast Fashion: Please discuss if Zara should start upgrading its information technology at the time.

Zara, one of the largest global fashion retailers, was founded by Amancio Artega. Its headquarters were
located in La Coruna Spain, after Inditex- one of the most successful distribution chains in the retail
industry-was established as Zara’s holding company. Zara’s successful business model uses an optimum
combination of several aspects that work in tandem with each other to fulfill the company’s basic ideology
formulated by Inditex Ceo Castellano: “Link customer demand to manufacturing, and link manufacturing
to distribution”. However, this framework would only function in theory if not for the IT department of Zara
that designed a customized application which controls the company's operations. The IT department is
responsible for creating a robust IT infrastructure that seamlessly connects all the factors that build Zara’s
successful business model.
The backbone of the business model was its IT framework, however the framework was created The
business model consisted of various strategies that set Zara apart from its competitors. The company had
established its market leadership based on a high level of customer understanding and a prompt reaction
to those needs. Therefore, the strategy accounted for quick turnaround times, its capacity to maintain a
wide and exclusive range of products that adhered to the current market trends, and its ability to keep
inventory storage minimal or negligible. Branding, and advertising campaigns were kept minimal, instead
there was emphasis on creating a reliable and strong brand image through its successful products and
services. The company created a strong identifiable organizational framework that allowed employees to
contribute to business decision-making and use their unique knowledge, with clear boundaries to avoid
conflict. Zara’s clothes were made with a short shelf life, as they believed in offering new innovative
clothes to their consumers and this boosted sales as consumers believed styles or clothing would remain
in stores for a short period. For this reason, Zara’s IT department operated on a POS system which
effectively validated the business model. However, the challenge they were faced with was whether to
upgrade its IT system as its old POS system was no longer supported by its vendor, Microsoft.
The decision to upgrade can be tricky, because Zara’s current system has proved to be extremely
effective and conducive to Zara’s strategies. However, I believe Zara should upgrade its technology and
identify a way to integrate the new technology system into its already profitable business model. Zara
believes in Fast fashion which attempts to master trends and the rapidly changing clothing trends,
however this is synonymous with the IT trends. Technological changes are important for future growth,
and adapting to the trend can make Zara more profitable as its business model sets it apart from
competitors, while its IT adaptability ensures stability for the position of market leader in the industry.
Moreover, there is a big risk involved in not upgrading the system, if the terminal vendor decides to make
a drastic change then Zara might have a large technological failure, disintegrating the entire business
model. In a situation where this emergency might occur, it needs to be noted that a technological upgrade
involves several steps. The IT department wrote the program with the initial POS system therefore
another program will need to be constructed, then go through the phases of implementation into the
automation process. Employees will need to be trained to implement the new technology accurately.
Hence, I believe in order to support Zara’s profitable business model, upgrading to the new technology is
important especially in the world we live in today. Technology is growing with importance on the daily, it is
essentially the backbone of our lives and of a successful business.