This report aims to explain the importance of information system in order to fulfill the information requirements of the business as it explains the role of computer and information system to achieve operational excellence in business functions, competitive advantage and business expansion. It emphasizes that the tools of information system like intranets and extranets can be used as measures of information. This report also presents an analysis of Zara as an international retailer that follows a simple and unique business strategy as Zara internally develop their operation software based on a operating system to write the more complex and specialized programs. COMPANY BACKGROUND
Zara, one of the world’s largest fashion companies, was founded by Amancio Ortega. The first Zara store was opened in 1975 in La Coruna, Spain. In 1985, a holding company named, Inditex was formed over Zara. The main product lines of Zara are Women’s, Men’s and Children’s clothing. Zara stores are located in prime shopping districts and are known for bringing the latest fashion trends from the runway to store shelves within weeks (Mcafee, Dessain, & Sjoman, 2007).
Zara’s business model is simple and focuses on linking customer demand to manufacturing, and in turn linking manufacturing to distribution. Their primary issue relates to the current information technology platform that they use to operate their chain of retail stores. Zara’s current information technology system is based on a Microsoft - Disk Operating System (MS-DOS), which is no longer supported by Microsoft. In the case presented, executives Xan Salgado Badas, head of IT for Inditex, and Bruno Sanchez Ocampo, who worked for Salgado, are at odds over whether or not Zara should consider upgrading their operating system from MS-DOS to a current operation system that is fully supported in the IT marketplace (Mcafee, Dessain, & Sjoman, 2007).
The reasons in support of the upgrade are that if Zara’s hardware vendor chose to upgrade their machines, the point of sale terminals used by Zara’s stores would no longer be compatible. This would prevent any more new stores from opening until the IT department implemented a solution to solve the compatibility issue between the old software and the new upgraded hardware. A second reason to support the upgrade is that upgraded POS software will enhance functionality and network capabilities. On the other hand, the primary reason against the upgrade is that Zara’s current system works almost flawlessly. There is currently no IT intervention required to open a new store and the IT department seldom receives call for IT support and issues (Mcafee, Dessain, & Sjoman, 2007). Upgrading the system is a major project, with potentially large ramifications that could be costly and detrimental to Zara’s current way of doing business. (http//:papercamp.com/essay/36901/zara)
DEFINITION OF INFORMATION TECHNOLOGY
An Information Technology System (ITS) refers to the collection of methods, practices, problem solving operations and methodologies that transforms data into information and knowledge desired by, and useful for individual, group users in organizations and other entities. On the other hands, Information Technology System refers to the combination of hardware, software, infrastructures and trained personnel organized to facilitate planning, control, ordination and decision making in an organization. This system can involve a combination of work practices, information, people, and technologies organized to accomplish goals in an organization. TYPES OF INFORMATION TECHNOLOGY SYSTEM (ITS)
The following are the types of information technology system available to managers for effective and efficient control of business activities which can also assist in making decision for an organization to be successful; TRANSACTION PROCESSING SYSTEM (TPS): This is required to meet the data collection, storage, processing and outputting...
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