Waterloo Regional Police Services: The CIMS Project

Background:

The fashion industry that Zara plays in are intensively competing in fast market response and wide market coverage. Basically, since the target customers' tastes in fashion change rapidly, it is hard for industry players to not only accurately predict the trends but also put effective influences onto customers. As a result, industry players are trying their best to quickly sense the popularity and then deliver their quality products at the right moments to the right places. Additionally, players especially those large chain brands are expanding their business globally. With more and more new stores opening all over the world, the top players are facing huge chanllenges in creating their business infrastructurs that are capable of supporting faster market growing as well as continuously bring better styles in a timely and cost effective way.

Situation:

Zara has achieved great success in the fashion industry to be one of the top players since the early 2000s. The unique Zara business model including how they manage production, delivering, retailing, marketing and even decision making truly allows this company to quickly and accurately react to the global market and then delivery exceptional values to customers. Regarding the role IT plays in the Zara model, it is so critical that it ensures the core business functions flow smoothly and reliably. This is quite easy to tell as IT is integrated into every business unit of Zara. For example, the customized administrative software is able to deal with the inconsistent tax policies across countries. Moreover, the PDAs used in stores are used by store managers to ensure the critical ordering, fulfillment and etc. More generally speaking, no martter the upper or lower stream of the business logic or the corporate responsive and decentralized strategy are built bases on the existence of effective IT solutions.

Problem:

The major problem for Zara can be easily concluded as the organization is experiencing huge active inertia from its constant success and growth which makes the executive team unable to decide if they should move forward to upgrade their POS system. At the same time, the secondary problem is that they are also struggling at which will be the most effective path to move towards to keep the success.

Analysis:

We can conclude the major problem from the huge argument between Salgado and Sanchez. As the head of the IT department, Salgado was really worried about the recent obsolete of DOS operating system because all of the applications used for Zara became vulnerable and unsupported. It could become even worse if the POS vendor decided to move away from DOS. If that is the case, Zara could suddenly fall into a situation that everything could go side ways. Furthermore, there were increasing amount of voices from store managers that the current POS system was lacking of some key features which can help them run the stores better. However, Sanchez, the manager or the technical owner of the POS system, argued that everything for the POS worked seemlessly and there is no need to upgrade the POS. He also pointed that the ease and reliability of the DOS based POS system helped the fast roll out of new stores without any IT expertise involvement. Although Sanchez was also aware of the DOS issue, he still could not justify the benefits of upgrading the POS system as hugh amount of cost, labour, training and etc would be involved for the purpose of getting rid of the potential risks overlooked by Salgado. The above is not the only problem bothered them. No matter they decided to upgrade the POS system or not, they always need to find out the best way to reduce the risk level if they stay with the current POS system. If they do decide to move forward for upgrading, how they rollout their changes to stores around world as well as migrating all applications to newer level drew further concerns to the executive team.

Decision Criteria:

The criteria for making decision is clear. The winning action must be inline with corporate strategy to support healthy operation and continuous growth. Also, the action should only bring controllable impacts to every business unit across the corporate.

Options:

Option 1:
Stay with the current DOS and possess enough extra POS systems to deal with contingencies. At the same time, management will work with the vendor to guarantee the long term POS system support and enact corresponding items in the contracts. The benefit of doing this is it does support the company strategy in the way it has been done for years and is approved to be effective. Additionally, doing this only requires minimum costs to acquire extra backup POS systems and efforts for management make contracts more favorable to Zara. There are also disadvantages for this option. First, although Zara is the only big customer for the POS vendor, it could still be highly possible for vendor to move away from DOS and leave Zara unsupported. Secondly, the technology trend towards internet and large data amount will force Zara to upgrade from DOS to newer and better OS sometime in the future anyway. It is good to upgrade as early as problem before risk gets too high to avoid. Thus, simply giving up the chance to upgrade now also means Zara will miss the best timing for moving forward. Thirdly, the DOS POS is not capable of adding features such as real time inventory checking and information sharing. Lacking such features will make Zara hard to impove and further lean its business model.

Option 2:
Move forward to upgrade the POS system to windows operating system and then start migrating other applications to Windows compatitable. This option has instant benefit of avoiding all the risks from the sunset of DOS. Also, the windows is the most user friendly operating system which will bring the best improvements in performance to stores with little user impacts. IT resources may need in a short period for new store set ups, however, the cost of training current and new store members to get use to the new Windows based POS can be minimized. What is more, the real time inventory and information sharing features will be enabled based on Internet. As a result, Zara will be able to react even faster to the market as well as further lean its business model. This option also brings some chanllenges. Clearly, cost is the topissue. Other than that, developing and testing new POS system require very long time thus final production of the new system will be years in the future. Lastly, rolling out new system globally is an headache if Zara is not able to work out a easy migration solution.

Option 3:
This is a hybrid version of option 1 and 2. Since both option 1 and 2 have unfavorable disadvantages, focusing on option 1 in a short term and moving towards option 2 in a long term could best fit Zara. I would go for this option and will explain how to achieve in the next section.

Plan:

Short term: 1-2 years
Zara managers will push hard the vendor to have an extended support for DOS POS in a term of 5 years. Simultaneously, dedicated R&D team will start to study Windows solutions for entire Zara business with early focus on the POS upgrade and rolling out.

Mid term: 3-5 years
In this period, Zara will focus on developing and testing the new Windows solutions. An initial product prototype should be created as early as possible. Then, product tests should be created to all business cases with involvements from representatives from all business unit. After final solution and prototype are determined, a new pilot group can be formed and conduct comprehensive test. If the test shows positive result, Zara can go forward to use the new system in the headquarter pilot store. With test going on, Zara will further refine the new Windows system and achieve the final production version.

Long term: 6 - 10 years
Achieve complete rolling out to stores all over the globe. Also, Zara should try to simplify processes for new store set ups. With the new applications configured in all business unit, the ultimate goal for Zara will be JIT production and Lean processes.