Zara for Fast Fashion
In analyzing the case we find that Ezra did not appoint a CIO; had no formal process for setting an IT budget; did not have policies in place to select specific technology investments; required no formal Justification for IT efforts; and did not conduct cost/ benefit analysis for IT projects. All of these elements are critical components to the success of IT and business overall. These shortcomings advocate the fact that Ezra completely belittled the role of IT within the organization and merely used IT as a support function for business.
With a completely decentralized decision making strategy and lack of IT [business integration, Ezra created the platform for eventual failure. Because all of the above mentioned are responsibilities of both positioned executives and IT leaders, I am inclined to assert that poor integration is in fact the central dilemma to the case. Because the lack of IT and business alignment sets the groundwork for the additional issues to cultivate, it is significantly more critical than all other noted issues including: updating hardware and software systems; creating internal networks; and the lack of formal IT investment strategies.
All of the above identified issues can be derived from the central issue of poor IT and business integration, and therefore makes this issue critical and more significant than the aforementioned.
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B. ) The individuals and groups who are most directly impacted by the lack of functional business and IT integration include: Inedited/Ezra Owners and Shareholders Sara’s executives, store management, and all employees Ezra customers All of the above mentioned stakeholders are directly affected by the poor business and IT integration within Ezra.
If Ezra continues to fail to respond to the needs of its store managers the impacts will spread and multiply. In the case Sara’s managers ask Slogan for the present systems to include more capability and dexterity. Slogan and the IT department cannot reach a general consensus. As the IT steering committee discusses the theoretical possibilities nothing gets done and time is lost. If time progresses and store management is disregarded, ignored, neglected and unaccommodating to, the result will include Job dissatisfaction, passive aggression to service employees, spikes in turnover and ultimately unhappy customers.
Because store managers possess such significant levels of responsibility including: ordering merchandise; replenishing stock; handling personnel; and coordinating store needs, the quality and level of in store experiences heavily depend on the competencies and commitment of store management. With stores being the first and last point of contact for customers at Ezra, the customer experience; level of service; availability of goods and employee interaction is vital for Sara’s success.
If store managers do not feel equipped to provide exceptional service, the customers will suffer via in store service levels. Customers will be directly affected by Sara’s failing leadership by experiencing unpleasant employees, long waits for inventory assistance, and inconsistent information between store locations. As service levels drop, so does reputation, loyalty and sales. If sales go down shareholders and owners loose revenue. Lost revenue creates the beginning of an unhealthy business which directly hurts owners and shareholders.
C. ) So what causes lead to the absence of successful business and IT integration? There are several factors which collectively generated the abovementioned central problem. Those which are most important are outlined as follows: Organizational: The “speed and decentralized decision making approach applied to IT was Sara’s first and most fatal mistake. Using this approach Ezra failed to realize the importance of appointing a CIO and subsequently had no formal erection for IT decision making.
The authors of our text on page 35 site the “Global trends affecting the CIO role”. These trends include: Coo’s expecting IT managers to manage people, finances and materials not Just technology; Coo’s expect IT to contribute to a firms flexibility and ability to absorb change; and that Coo’s are called on to take a broader role in corporate leadership. These noted expectations given by the texts authors perfectly contradict every aspect of Sara’s current executive and IT relationship.
Castellated (CEO) does not have any real expectations of Slogan. Slogan the current IT leader has little or no say in setting budgets; contributing to flexibility; is not solely authorized to select technology; and fears acting for organizational change. With little or no influence in the big picture business strategy Sara’s IT department is again classified as an operational support group. Because of this decentralization, business and IT units are “soloed”, separate and far from integrated.
I believe that these factors expose and point to one of the major causes for poor business and IT integration within Ezra. Managerial: The problems at Ezra essentially surface from the top down. Starting with the CEO, the company is blinded by what they do right which helps them ignore what is going wrong. The article “Mastering the Three Worlds of IT” states on page 142 that executives do not know when, where, or how to get involved and the reason is, because they operate without a comprehensive vision of what IT does for the company. MacAfee, 2006) This statement defends my assertion that Ezra executives are currently looking at IT as an operational support function and fail to integrate and strategically place IT within the company. The central problem in this case exists not because “things weren’t broken”, but because no one (CEO or Head of IT) stepped up to the challenge of managing organizational change. Although Slogan was not officially appointed CIO, he was the head of IT, and with this responsibility comes the need to be business intelligent.
Slogan clearly did not look beyond his operational role and failed to define the company’s IT needs as they applied to business strategy. Slogan failed to push Sara’s IT efforts to align with organizational needs and therefore failed as an IT leader which led to the major issues within Ezra. The authors of our text remark on page 36 that IT should be positioned as a strategic and competitive necessity; making sure IT plans, actions and capabilities are clearly linked to company objectives.
This simply is not occurring competently or proactively within the organization, as the conversations between Sanchez and Slogan only describe reactions to current concerns. Although Ezra is good at making IT work for them, they fail to see how IT can work with them in the future. I believe that Ezra executives misunderstand the role that IT should be playing within the company and this leads to Sara’s inability to arm a long term IT renewal plan tied to business strategy.
The fact that the executive and IT leadership teams within Ezra completely disregard the importance of proactive strategic planning and use decentralized brainstorming creates another major cause which leads to the central issue of poor business / IT integration. D. ) What are the possible solutions that should be considered? Solution 1: A more centralized executive decision making structure where IT decision making includes the CEO, COO, SCOFF and CIO Solution 2: Implementation of an IT leadership development program. Solution 3: Demoting Slogan and appointing a CIO with business management experience.
So the question is how do each of these solutions respond to Sara’s lack of Business and IT integration and alignment? Solution 1 addresses this primary issue on a multitude of different levels. By centralizing, formalizing and collaborating decision making there will be a better sense of understanding and transparency amongst the units. This executive IT cooperation will create uncluttered communication which will result in stronger organizational awareness, and allow for clear, concise, definite business strategy formation.
Once executives understand the essential business needs the technologies that are required come into play, consequently resulting in the desired business/ IT integration. This solution would be acceptable by Sara’s stakeholder because once implemented, a positive domino effect of would occur These IT applications will satisfy the needs of store managers, who will be better able to suit their employees. With the accommodation and satisfaction of employees comes improved customer service levels which equals success for all.
Solution 2 responds to the central issue with the implementation of a long term resolution. The incorporation of an IT leadership development program will ultimately cultivate and nourish IT focused individuals and gear them toward business management. The authors of our text remark on page 11 that the most useful thing any IT manager could possibly do is to push business smarts and tech smarts closer together. With the employment of a leadership development program Ezra will be investing in the growth of individual talents that will eventually be equivalent to executive and IT collaborations.
These future IT leaders will emerge with the IT/ Business integration mindset, thus saving he company time and money with ongoing integration efforts. This solution will be acceptable amongst stakeholders because it has potential to cut cost and increase productivity and fluidity of operations. As operations improve employees are more efficient and customers are better served. Solution 3 is a very direct approach of organization reformation. By demoting Slogan and appointing a new IT leader Ezra will gain fresh perspective regarding the role IT needs to play.
Since Slogan has a very technical background he hesitates on promoting organization change. The appointment of a CIO will deliver formal dictation and distribution of objectives for IT to pursue. Because the new CIO will lack personal relationships within the department, he or she will be quick to act and ambitious to achieve. The new CIO will bring general management experience which will reduce the tech / business integration gap and essentially create value for Ezra. Increasing value within Ezra would again satisfy the need of all stakeholders involved. E. ) What is the ideal solution?
The optimal solution to solving the absence of business and IT integration t Ezra is solution 2. Through the deployment and development of an IT leadership programs Ezra will ultimately build a continuous supply of IT leadership talent. This solution not only becomes part of the long term business strategy, but assists in the longevity and success of the organization. This solution makes more sense for Ezra because it develops a permanent solution to a variable problem. Solution 1 and 2 are respectable choices however these solutions only temporarily fix the major issues.
Solution 1 can easily be effected by executive social cohesion and lack thereof; while elution 2 is volatile due to the nature and fragility of organization reformation and changes in ownership. The implementation of solution 2 will be accomplished by (short term) mapping technologists and scouting talent; (midterm) comprehensively assessing, evaluating and analyzing employees who show promise and potential; and (long term) mentoring, planning, and training individuals to copiously understand the business the role of IT and the necessity of integration.
Some potential consequences to implementing solution 2 will include: the initial lead-time for the project to show exults may cost a few years; the necessity to rebuild IT credibility within the company and industry; new amongst seasoned technologist who aren’t geared toward leadership; and resistance to periodic shifts in IT leadership as innovative and talented leaders take on new projects or roles.
The result and outcome of an IT leadership development program will be the long term success and integration of business and IT functionalities within Ezra. By harnessing technologists and gearing personalities for management positions, Ezra will create huge value and sustainability for itself within the clothing retail manufacturing industry.