Zara: IT for Fast Fashion

By:
Jared Altmann
Michelle Clark
Daniel Hinrichs
Kristen Rapp
Michael Wilson
 Preview
 Introduction of the problems & decision
 Company background
 Analysis
 Company Strengths
 Company Weaknesses
 Opportunities
 Threats
 Our recommendations
 Conclusion
 Issues & Decision
 Technology is an increasingly important
aspect of business
 Companies are faced with the challenge of
making the right decisions about what
procedures will benefit their business

 Zara has practiced many of the same

strategies since they were developed
 Small IT department
 Using same computer applications they wrote
years ago
 Not many resources into technology systems
 Decision: Upgrade IT systems or don’t
change what is not broken????
 Zara Background

 Fashion retailer
 Founded by
Amancio Ortega
 First store opened in
La Coruna, Spain in 1975
 Believe retailing and manufacturing
need to be closely linked

 “Link the customer demand to manufacturing, and

link manufacturing to distribution.” ~ Zara business
Model
 Major Events of 1985
Inditex
 Worked as an IT manager
 Holding company formed atop Zara & other retail chains
 Multinational clothing retailer & manufacturer
 Zara is Inditex’s largest chain of retail stores

Jose Maria Castellano Rios joined company

 Worked as an IT manager
 Shared Ortega’s beliefs in the importance
of technology
 Became CEO of Inditex 1997
 Zara Strengths
 Local Manufacturing
 Fast Production
 Distribution Centers
 Basic IT
 Zara Weaknesses
 No CIO
 No formal process to
allocating IT budget
 Point-of Sales units over a 10
years old
 DOS-based operating system
 Physical inventory count
 Can’t communicate in real-
time with other stores
 Zara Opportunities
 Communication
with potential buyers
 Online Sales

 Expand Store Locations

 Italy
 Zara Threats

 POS vendors
 Only company using “ancient
operating system”
 Would not sign contract promising
compatibility
 PDA vendors
 Zara is not updating operating
systems
 Probably not DOS-compatible
 Other retail chains have real-time
communication
 May lose market share to competitors
 Our Recommendations
 Upgrade PoS, then worry about
upgrading the network
 Set up a wireless network
 Appoint an innovative CIO
 Set a budget according to needs,
not off of industry standards
 Share inventory information via
network
 Keep PDA’s for backup use
 Use the demo store to test new
systems, then integrate them into
the other stores
 Network, PoS terminals, etc.
 Make a decision now!
 Conclusion
 By upgrading IT systems,
Zara will keep up with
competition
 Direction, leadership,
prioritizing
 Global networks and global
markets are changing &
upgrading very quickly
 Zara can’t be left in the stone
age!!!!