Zara - Reflection

             I would still recommend my third alternative to upgrade the Point of Sale-POS terminals with the Microsoft OS-Operating System. There are too many pros to upgrading that it shouldn’t be a low priority: Increase revenue, better visibility with inventory and sales and better form of communication between stores.   Also, I would still recommend implementing purchases on the Internet. The Internet is an undiscovered resource for Zara and the upgrades will only increase revenue and boost employee morale.

The POS and OS IT upgrade can be a major financial investment for Zara’s business as well. As I mentioned in the earlier memo, you have an opportunity to increase your net profits by 11.8 million Euros in the 2003 year (15 million Euros in additional profits – 3.2 million Euros in additional expenses = 11.8 million Euros Gain)! The cost of hardware, software, and installation goes on your balance sheet financials as fixed assets.

Also, I would still recommend creating a new IT department. I believe the IT department would add value to Zara’s organization. There is a 1.2 million Euros  salary expense to go with this new department but you will see a substantial increase in your revenues. In my opinion, if there is no investment in staff and technology, there is going to be a lack of IT creativity. The lack of IT creativity will allow competition to take away business.       

Overall, the POS hardware and OS software upgrade accompanied with the Internet will only drive your business to grow efficiently and effectively. The set up time won’t require a significant amount of time to implement and the upgrade transition is not difficult. As it was indicated to me, Zara managers want to look up inventory balances in all stores in a timely way and the IT upgrade project would be an excellent idea to implement POS OS in their day-to-day operations.