An information system

An information system Introduction: An information system is a set of interrelated components that collect or retrieve, process, store and distribute information to support organisational decision-making and control. One of the key issues with ‘information systems’ (IS) (these days) is that companies cannot measure if they are becoming more profitable or efficient by using the systems that they purchase. In a study done by KPMG on 200 UK firms, around seventeen billion GBP is lost each year due to the mismanagement and misalignment of information technology (IT). One way to evaluate a firms’ IS usefulness is to use the resource-based view â€Å"inside-out approach,† which means that a company should identify its core business values and in turn, align these goals with a suitable information system that will fulfil these needs. Often times, however, large multinational firms implement new technology, regardless of whether it benefits the company or not and there is no way to mea sure results. Therefore, it is beneficial to look at a firm who has implemented a successful IS, for which it receives its competitive advantage. Inditex is a major holding company based in La Coruà ±a, Spain, which maintains controls over popular clothing stores such as Zara, Massimo Dutti and Bershka amongst others. For the purpose of this report, we will look at Zara in more detail, a store known for its high fashion for reasonable prices, with many clothing stores in prime locations in metropolitan cities around the world. It competes with other clothing stores such as H&M and Gap but it sets itself apart from them using its savvy information system and rapid production schedule. For the purpose of this report, we will examine Zara’s Technological and Socio-Economic Environment along with Zara’s knowledge chain management to evaluate its alignment of information technology as a function of Zara’s business strategy. IT in alignment with Business Strategy: Zara’s business strategyis to provide fast fashion for low prices. Based on this principle, one of Zara’s developed core competencies is its effective and minimalistic approach to utilizing IT for the purpose of timely knowledge transfer, fast production turnaround and employee empowerment. Aspects beyond which are not directly connected to Zara’s core competencies, the company prefers to outsource, such as its logistics. In order to understand the effects of IT on Zara’s business model, we must take into consideration the technological and socio-economic factors affecting Zara, such as its management process, employee skills, technology, structure and strategy. The management process: The management processof Zara is supported by its holding company Inditex, who manages other popular European brands such as Massimo Dutti, Pull and Bear, etc. however, each clothing store is distinct because Inditex supports organisational learning, as opposed to maintain ing firm control on these stores. Not only is each entity separate, but management encourages employee empowerment at Zara by allowing its employees the flexibility to choose new clothing designs for its store on a bi-weekly basis. Therefore, in just one city alone, one Zara store may have significantly different inventory than another Zara store up the road. Despite these differences, Inditex is still able to create economies of scale and scope based on the learning curve between its inter-related brands.