ISY205 Report on Zara Enterprise System: Assessment one Answer
ISY205 Enterprise Systems
This report is in reference to Zara, there is a brief of the principal drivers because of which the enterprise system of Zara has adopted the business. All the key factors were mentioned in the first part of the report. Further, there is a discussion on the ways in which the enterprise systems of Zara contributed to the performance of the organisation and further mentioned that how such contributions can be measured and just to know whether those contributions are working or not. Then towards the end, there is a discussion on changes which the organisation considers necessary for the success of the firm.
There is a report on the Zara Enterprise system covering details in three parts regarding the firm. There are all the factors which are behind the expansion of the firm like why the business adopted to continue this enterprise firm. Also, there is a brief discussion on the contribution of enterprise system of Zara towards the performance of the organisation along with the steps that how these contributions can be measured. Also, there are some considerations mentioned which according to the management are necessary to adopt in order to achieve success of the enterprise firm. This report has reflected the key understanding on the business process of Zara international company and it has been compared with its domestic and international rivals in the clothing fashion industry.
Discuss the principal drivers behind business adopting Enterprise systems.
Zara is the international well-known fast-fashion company, which is owned by Spanish fashion group Inditex. The first store of Zara was established by Amancio Ortega in the year 1975 in La Coruña. Since then, Zara is growing with a really good pace. Now, with the help strategies of pioneering technology, Zara is the leader in the market. By acclimating with new tools including big data, the company has outpaced its competitors. Zara is the last firm in this field to adopt e-commerce, but still, it has achieved the best universal experience of shopping which encompassed both the locations i.e. online stored and brick-and-mortar locations (Freedman, 2016). Other companies are also trying to get such success and such experience, but they never got the same results. The principle drivers behind the business adopting the enterprises system in Zara business is related to setting up automation in the process. It was done to strengthen the business process functioning and increasing the client’s satisfaction from the undertaken business activities.
By the end of the year 1990, Zara has expanded a lot and its stores were seen in France, Paris, USA, New York, Portugal, Oporto. Utilizing its strong image, the fashion company came up with housewares as well in 2003, and the store’s very first online store was launched in 2007 to sell all the home products of Zara. The main principle behind the increasing expansion of this fashion firm was its success and response from people. Till now, there are around 1,830 stores of Zara in 82 countries. The internationalisation of Zara followed the classic stage model, firstly the firm entered the culturally or geographically closed markets, and after exploring those markets and establishing there, then they explored the distinct markets. This worldwide expansion of the firm was triggered by both the factors of push and pull (Chai, et. al, 2016).
As compared to the competition with its international rivals, named H&M, and Uniqlo the following are the three distinctions of Zara helped it achieving success at a bigger level.
- Its vertical integration, with the help of which faster turnaround time is achieved.
- Its best way to use joint ventures and franchise for expanding rapidly.
- Using store as the main promotional tool, while spending less on advertising.
How do Enterprise Systems contribute to organisational performance and how do we measure such contributions?
Zara’s culture is a sort of entrepreneurial type and it mainly focuses on employing mostly young talents as they can quickly climb through the company’s ranks. Within Zara, it promotes almost 90% of the store managers and experiences quite low turnover generally. The brand fearlessly gives its responsibilities to the young and fresh talents and with the help of this, they get fast implementation. The top management of the store gives the store managers control and full liberty over the operations (Whysall, et. al, 2019). This enterprises system in Zara set up automation in the process and eliminate several manual works in process s system which lower down the business costing and ease the procedural work of the organization. By using the enterprises system, Zara could easily create core competency in the product differentiation strategy while offering highly advance services to its clients which will distinguish its business as compared to its rivals H&M and Uniqlo in market.
Also, the firm has a system, that if an employee is selected for a promotion, then her/his outlet develops a proper comprehensive training program for that employee with the Department of Human resources, which will be followed up by the supplemental training. This reflects the commitment of Zara towards the development of talent. Even the organisational structure of the firm is quite flat with very few managerial layers (Whysall, 2018).
Zara’s most important informational source is Customers, but as the various other brands of fashion, Zara also employs analysts of the trend, experts of consumer insights and have some of the best fashions. Zara’s creative team comprises of more than 200 professionals. They always work with a simple motivation that the word ‘Impossible’ doesn’t exist.
In order to measure these contributions, various meetings are held by all the business functions gathers and sit together at the headquarters and share the statistics, further discussing which factors or zone of the firm still needs the enhancement, and make plans to work on those techniques which are already giving very good results. The contributions made by the Enterprise system are measured by the response of the customers. Customers are the key factor in the success of such firms, and with their response towards the store is the only factor which contributes majorly (Viardot & Nylund, 2017).
What are the organisational change management considerations necessary for successful adoption of an Enterprise System?
In order to adopt the Enterprise System successfully, Zara made some organisational changes in the management part. Like they understood the need of how to respond to the distribution of rapid market; they planned their strategic decisions according to the new innovations in technology; they properly followed the concept of divestments, acquisitions and mergers; within a constant period of time, they keep on reconstructing and renovating the stores and keeps on rotating their leadership qualities; keeps check on the regulatory environment and make required changes; keeps on bringing new culture and innovative way of working; keep on introducing new performance indicators in the stores, and due to which, the employees work enthusiastically; they keep regular check on the innovation and development of the product; and proper check on ‘value chain’s’ geographical dispersal or physical relocations (Tidd & Bessant, 2018). The main consideration for adopting the enterprises system would be hiring employees and developing proper training and development department in the process. This newly adopted training and development program will be helpful in strengthen the business process and helps employees to adapt with the adopted changes in the process. There may be requirement of making changes in the inbound and outbound activities of the process which would be more useful in adapting towards the installation of the enterprises system in the business process of ZARA.
The changes were made on the basis of three categories i.e. Incremental, Episodic and Transformational. The incremental changes mainly consist of the improvement or upgrading the system and the change support of this system is mainly focused on the user's experience and the adoption part. The Episodic changes are quite infrequent and usually short-termed. It mainly comprises of the changes in the projects or the scheduled programs or the introduction of some new organisational design. And finally the transformational changes, the transformational changes comprises of a strategic and holistic view of changes which are required at the time of avoiding the risks. Also in this, change expertise is needed at the levels of facilitators. There are various types of impacts of changes like business models, the location of the store, customers, store functions and processes, operating models, cultures et cetera. These all are the organisational changes which according to the management of Zara are considered very essential for successfully adopting the Enterprise system (Stanford, 2018). However, company might face procedural complexities and issues while adopting the enterprises system in its business process. Therefore, it may require re-engineering process strategy to strengthen the overall outcomes which will be helpful in increasing the overall outcomes. This will also be helpful in mitigating the complex business challenges and issues in the process while adopting the enterprises system in the business process.
Zara is one of the top most leading brands in the industry of fashion. Its achievement and success are all because of its strategic planning and its management part. Today the best talents in the field of fashion are working with Zara because the approach of the firm is very strategic. Because the firms deal properly with the needs of clients and it always prefers the best suitable location of the store, it is achieving quite a good success in the market. Even the online stores of Zara are also going great. Zara’s strategic planning towards the organisation exposed the firm to great success.