Description
This is documentation is describing about the case study of ZARA.
ZARA: IT for Fast Fashion
Problem To change the operating system of Zara’s POS terminals from the older DOS to the new operating systems like Windows, Linux, Or UNIX. This may be needed as Microsoft had stopped support of DOS operating system. Also, the hardware vendor of POS terminals may change the machine in such a way that they could no longer use DOS as operating system. The hardware vendor had clearly told Zara that they were its only customer that was using DOS. The old system did not provide them with freedom of using the new networking tools and techniques. At the other end switching to a new system and developing the new software can make them unstable, as the existing system was stable and functioning properly. This instability will give them additional headache and problems. Analysis The total investment of upgrading to new system is as given below:
In Euro POS terminals Total POS termnials per store Total cost of POS per store Wireless router wireless ethernet card high speed internet connection Sub-total No of POS Overall Programming time required No of days required Cost per day Install new POS Establish wireless Train staff Total Hours 5000 2 10000 180 50 240 10470 1558 19000 2375 450 16 8 8 32
16312260
1068750
No of days Cost per day No of stores Operating system cost No of POS
4 2000 8,000 1558 12,464,000 170 3116
529720
Total Cost
30,374,730
The total investment for upgrading is Euro 30 million. This is very negligible compared to their net operating revenues per year which is approximately euro 4000 million. Considering this they can go ahead with the investment without affecting their financial performance in the coming year. Also, they can amortize the cost for at least 5 years to decrease the expenses per year. The new system will help them in managing the inventory better and they will be able to use the new feature of the system like interacting directly with the nearby store rather than through the phone.
doc_611373815.docx
This is documentation is describing about the case study of ZARA.
ZARA: IT for Fast Fashion
Problem To change the operating system of Zara’s POS terminals from the older DOS to the new operating systems like Windows, Linux, Or UNIX. This may be needed as Microsoft had stopped support of DOS operating system. Also, the hardware vendor of POS terminals may change the machine in such a way that they could no longer use DOS as operating system. The hardware vendor had clearly told Zara that they were its only customer that was using DOS. The old system did not provide them with freedom of using the new networking tools and techniques. At the other end switching to a new system and developing the new software can make them unstable, as the existing system was stable and functioning properly. This instability will give them additional headache and problems. Analysis The total investment of upgrading to new system is as given below:
In Euro POS terminals Total POS termnials per store Total cost of POS per store Wireless router wireless ethernet card high speed internet connection Sub-total No of POS Overall Programming time required No of days required Cost per day Install new POS Establish wireless Train staff Total Hours 5000 2 10000 180 50 240 10470 1558 19000 2375 450 16 8 8 32
16312260
1068750
No of days Cost per day No of stores Operating system cost No of POS
4 2000 8,000 1558 12,464,000 170 3116
529720
Total Cost
30,374,730
The total investment for upgrading is Euro 30 million. This is very negligible compared to their net operating revenues per year which is approximately euro 4000 million. Considering this they can go ahead with the investment without affecting their financial performance in the coming year. Also, they can amortize the cost for at least 5 years to decrease the expenses per year. The new system will help them in managing the inventory better and they will be able to use the new feature of the system like interacting directly with the nearby store rather than through the phone.
doc_611373815.docx