Zara operates a highly efficient, low-cost IT infrastructure.  They spend little on IT in comparison with their competitors, adhering to the principle ‘less is more’ IT to support business processes whilst going against trend of using IT for decision making and instead relying on the judgement of their people. In fact Zaraʼs IT expenditure is less than one-fourth the fashion industry average”. Zara excels by targeting technology investment at the points in its value chain where it will have the most significant impact, making sure that every penny spent on technology adds value.

Contrast this with the high-end fashion house Prada who hired an award-winning architect to design their flagship Manhattan location with cutting edge technology:

• When a customer walked into the glass dressing room the walls would automatically turn opaque and transform into a mirror.
• Garments all had RFID tags so dressing rooms computers would know what the customer was trying on and make recommendations of complimentary or alternative products.
• Using PDAs customers and staff could check real time inventory.
• Dressing room cameras would allow customers to view their front and back views side-by-side on a monitor as they tried on clothes.

From the outside the technology in the Prada store sounded amazing but the results were disastrous:

• Some customers undressed in full view thinking the walls had gone opaque when they hadn’t.
• Others got stuck in dressing rooms when doors failed to work, unable to withstand the demands of the high-traffic tourist location.
• The inventory database was often inaccurate, regularly reporting items out of stock even when they weren’t.
• When interviewed staff said they didn’t use the PDAs as they were cumbersome and the customers kept playing with them.
• The huge capital investment for in-store technology was not reflected in increased sales or brand affinity.

The Prada example offers critical lessons for managers; itʼs all too easy to be seduced by technology. An information system is much more than hardware and software, it is the data used or created by the system, as well as the procedures and the people who interact with the system.Getting the right mix of these is critical to executing an information system roll-out. Financial considerations should forecast the return-on-investment of any such effort (i.e. what will we get for our money and how long will it take to receive payback?).

Spend your technology budget on the key information and processes within your value chain, because Prada showed that it is all too easy to choose technology because it is fashionable rather than functional.