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Zara Case Group 2 - Coggle Diagram
Zara Case Group 2
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Relevant Facts
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Sanchez was the technical lead for the POS system, which is why he is so against changing it. [KOME]
Castellano joined as an IT manager in 1985, then became Inditex's CEO in 1997.
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Salgado and his colleagues preferred writing needed applications instead of purchasing commercially available ones
Salgado was unable to attain assurance with their contract with the terminal maker over potentially losing DOS support
Key Problems
Zara has very unorganized IT structure. The company has no CIO and no formal process for setting an IT budget.
Current POS system is not future proof, Zara has received assurances from vendors that there are not any plans to stop supporting DOS (Zara is the only contract that uses DOS) but there is no guarantee the terminal makers will stop supporting the outdated operating system.
[PROBLEM 1, KOME] Salgado and Sanchez are struggling to decide if they should upgrade the POS system at Zara.
[HOW IT HAPPENED, KOME] Zara has been using an old POS system that also uses DOS. This has caused Salgado to believe that they need to upgrade their POS system because it is falling behind in technology. Sanchez however is against this idea; believing that they shouldn’t upgrade their POS software. He thinks this because the current software still does what it needs to do and he thinks that upgrading it will cause problems in all of the stores.
[WHAT IS THE CAUSE?, KOME] They are arguing about this because Salgado believes that their hardware vendor for POS terminals could upgrade their machines to not be DOS-compatible anymore.
[WHY DOES THE PROBLEM EXIST?, KOME] This problem exists because Sanchez believes there is no use in upgrading a system that already works and thinks that it is unlikely for their hardware vendor to upgrade their machines to not be DOS-compatible.
[WHAT IS THE CONSEQUENCE?, KOME] The consequence of not upgrading their POS is that their technology will be behind greatly compared to their competitors. The software and hardware are very outdated and this will cause problems for the managers who use the systems at the stores.
[HOW DID IT IMPACT THE IT GROUP?, KOME] Without upgrading the POS software, this didn’t affect the IT group significantly because store managers did not need IT involvement. However, upgrading the POS is more likely to increase IT involvement due to there possibly being more new features installed.
Possible Solutions
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[SOLUTION 2 TO PROBLEM 1, KOME] Do not upgrade the POS software. Instead, purchase enough of the current POS terminals now to cover themselves.
[PROS, KOME] Their outdated system is fine and works as intended. If they lose support from their vendor, they will be covered with the current POS terminals. There is also less IT involvement.
[CONS, KOME] Current system runs DOS which is not supported by Microsoft anymore. Current system is also far behind in technology and is time consuming for the store managers. It doesn’t involve any high quality features that can help improve their jobs.
[CONS, PHILIP] Poor quality of life functionality on the old systems would still exist and cause issues. For example, store manangers were complaining about PDAs being time consuming to use with their small screens and styluses to accomplish returns.
[SOLUTION 1 TO PROBLEM 1, KOME] Upgrade the software and add additional features.
[PROS, KOME] This removes the fear of the vendors upgrading their machines to not be DOS-compatible anymore. Additional features will also help the store managers significantly.
[CONS, KOME] This could ruin their entire process, the new software is more likely to be buggy, and will include more IT involvement.
[CONS, PHILIP] Entails a number of follow-on decisions that could create more harmful implications and questions that would need to be dealt with in the future. Could be the incorrect time for the company to switch and upgrade with their current IT infrastructure.
Timeline
What Happens First?
Salgado (head of IT) and Sanchez (his subordinate) have an argument about whether or not to upgrade the POS system at Zara. [KOME]
Jose Maria Castellano Rios joined the company in 1985, becoming CEO of Inditex by 1997.
In 1985, a holding company, Inditex, was formed atop Zara and other chains.
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