Knowledge Management Assignment: Implementation Of Information Technology In The Operation of ZARA
Create an individual knowledge management assignment report that explores Knowledge Management and Information Technology in today’s organisations, focusing on the influence and impact of the contemporary landscape.
In your report, you will identify, discuss and analyse one current event (something that has occurred in the last two years) linked to or has impacted an organisation. Then, you are to explore its implications for the organisation’s use of Knowledge Management and Information Technology.
You will need to demonstrate the critical link between the internal and external organisational environments and discuss problems and challenges that the current event may case for the organisation in their use of Knowledge Management and Information Technology.
As seen with the present discussion on knowledge management assignment, with the increasing advancements in information technology (IT), there have been various changes in the global economic system that have stressed on the importance of knowledge. It has portrayed the vital role that information is playing in today’s digital age for ensuring organizational success. Knowledge being one of the most valuable types of information, it is essential for the firms to organize knowledge in an appropriate order for gaining sustainable competitive advantage (Akhavan, et al., 2014). This knowledge management helps in enhancing the performance of employees and develop such competitive advantage in the environment. The report aims to analyse the use of this knowledge management for helping fashion companies like Zara to operate in the changing landscape of the fashion industry.
Analysis of Current Event
The fashion industry has already been experiencing rapid changes in the recent years with the rapid developments in internet and technology (Morgan, 2020). The outbreak of the COVID-19 pandemic has pushed innovation and changes into this industry through new technology, consumer trends and demands. Some of the major changes occurring in this fashion industry that are expected to change the future include data-driven, sustainable, digital and simplified. Fashion industry is expected to become data-driven by using consumer trends data for creating products that customers are likely to purchase (Morgan, 2020). Furthermore, brands are inclining towards sustainable fabrics and methods because of consumers preferring environment-friendly products and moving away from fast fashion. Besides, customers are now preferring online shopping for buying clothes that sellers like Zara will have to adjust. In addition, fashion has also become simplified in design and delivery, which the brands need to consider for catering to the ongoing trends and demands (Morgan, 2020). Zara has been impacted by various changes taking place with the pandemic outbreak in the year 2020. Along with shifting from retail outlets to online stores, customers’ preference towards clothing styles have also changed because of the lockdowns (Cartner-Morley, 2020). The demand of formalwear and partywear has reduced dramatically alongside the consequent increasing demand in loungewear, outdoor clothing and home exercise wear. The sales of formal shoes have been replaced by that of slippers. Moreover, customers are preferring more sustainable version of fashion that Zara needs to address as it is mainly a fast-fashion brand. The habitual consumers of fast fashion are also shifting towards more sustainable product choices, which can be beneficial for Zara to introduce these items in its product ranges (Cartner-Morley, 2020). The female workforce of this industry has also been suffering with the sudden changes brought in by the pandemic. Thus, various changes have made it essential for brands like Zara to respond with changes in their operations, activities, business model and products.
Use of Knowledge Management and Information Technology
Zara can introduce knowledge management in its organization for responding to the changes taking place in the fashion industry. In this regard, the managers and employees focus on gathering both internal and external knowledge for converting them into new ideas, strategies or products. The fashion brand can make use of knowledge management by systematically and explicitly applying knowledge to maximize its effectiveness and returns from the knowledge assets (Xue, 2017). Here, Zara needs to focus on four fundamental elements of knowledge management, namely, knowledge creation or acquisition, storage of knowledge, disseminating or transferring knowledge and applying the knowledge. Furthermore, the brand further has to address the critical success factors for the effective application of knowledge management for responding to the environmental changes in the fashion industry. These include proper management support and leadership, effective human resource management, training and education and information technology (Nawab, et al., 2015). Information technology (IT) has become one of the most essential elements in the application of knowledge management with the rapid development in technology in this industry. It can be used in the organization of Zara for reducing the time of knowledge transfer, maintaining new knowledge, achieving higher efficiency and storing knowledge for responding to external challenges.
With the proper use of IT technologies like databases, clients’ information and competitors’ information, Zara can gain easy access to specialized knowledge and use it to its advantage (Nawab, et al., 2015). Besides, Zara might face difficulties in capturing and storing relevant knowledge like product development, past projects, work-related practices and employee knowledge without proper IT support. Such lack of effective IT support towards both codification and knowledge transfer can ultimately lead to knowledge loss and increased costs for the organization (Venkitachalam and Ambrosini, 2017). In a fashion brand like Zara, moderate investment can be made in IT infrastructure for supporting the personalization approach required through communication tools like video conferencing, email applications, online discussions and others. This is because such enhanced and coordinated communication can be beneficial for sharing experiences of knowledge experts and consultants within the organization. Moreover, information technologies like databases, decision support systems, intranets, search engines, data warehouses and others can be used in Zara for supporting its knowledge management system (Chuang, Liao and Lin, 2013). In this regard, document management is of great significance as it helps in gathering knowledge, supporting storage, disseminating knowledge through expert systems and other technologies for communication and collaboration.
Internal and External Environments
Various internal and external environmental factors affect the operations and activities of Zara, which consequently influences its response to the current events. Zara has a strong financial position and brand popularity in the global fashion industry. With its highly fashionable and trendy clothes, the brand has been able to build a strong customer base in the business environment (Zara, 2022). It focuses on building and strengthening relationships with its customers and review the competitors’ offerings for staying ahead of them in the market. The brand also consists of an effective business model comprising of design, production, distribution and sales spread across its entire retail network. This has enabled the brand to emerge as one of the largest international fashion companies catering to the changing tastes and preferences of the consumers (Zara, 2022). It consists of both intangible and tangible resources and capabilities for responding to the current changes occurring in the fashion industry with the outbreak of the coronavirus pandemic. The pandemic outbreak caused catastrophic effects for the fashion retailers including Zara as customers could not shop from the brick-and-mortar stores (Kim and Woo, 2021). This has shifted their preference towards online shopping and further changed their shopping habits from formal or party wear to more causal apparel. It is essential for Zara to use both knowledge management and information technology for addressing their changing shopping behaviour and tastes of the consumers to introduce new products and services. Moreover, the pandemic has also caused financial troubles for the consumers by reducing their disposable income and motivated them to purchase more sustainable products (Kim and Woo, 2021). This further makes it essential for Zara to cater to this changing affordability of its consumers in the market.
Problems and Challenges
There are several problems that are faced by corporate leaders while implementing KM and IT in the core activities of the organization. The primary challenge is employees working in ZARA might find it difficult to cope with the constant changes and ever-evolving IT. As mentioned earlier, knowledge management has been implemented in the core operation of ZARA to find out the exact needs and demands of the customers. Therefore, it can be said that fashion industry is currently shifting from mass production to mass customization (Jain, Bruniaux, Zeng and Bruniaux, 2017). Thus, rapid customization of products with the use of technology on large-scale can become a major challenge for the employees of ZARA.
Furthermore, digital transformation within the company can also be marked as another major challenges for the employees working in ZARA. Implementation of IT in various activities of the organization can be also marked as digital transformation. Digital transformation brings major changes in the core culture of the organisation (Lay, 2018). Employees often find it difficult to keep the brand image among several challenges in the workplace. Companies like ZARA serve customers in unique way and they also have unique brand value. Thus, employees and other senior managers find it challenging to work in the changing organization culture and keeping the exact brand value of the firm. This is also known as reputation risks.
In addition to this, the objective of using knowledge management strategies is to store relevant information that can further help organizations to perform better in the industry. Organizations like ZARA focus on monitoring the evolving needs of the customers. To monitor these needs personal information of customers and their tastes and preferences are generally stored by the firm in the form of survey, feedback and other forms of communication. In such scenario, maintaining security and privacy of data stored has also become one of the major challenges that are faced by employees within the workplace. Using information without permission from designated authorities, violation of privacy are various types of cyber-crimes that can have major impact on the goodwill and reputation of organizations operating in various sectors (Setiawan, et.al., 2018). Cyber criminals have the tendency to steal confidential data and leak them. This can have major negative impact on ZARA and the firm can also lose competitive advantage, market share and corporate reputation drastically. Thus, it can be said that handling large number of data or knowledge within the workplace is one of the major challenges that can be faced by ZARA.
In the above section of the report, various challenges that can be encountered by ZARA while implementing knowledge management and IT strategies have been discussed. The following part focus on providing few recommendations that can help these employees overcome challenges.
- It is highly recommended to the organizational leaders of ZARA to focus on implementing Block-chained knowledge management model. Blocks of knowledge are reliable and trust-worthy (Akhavan, Philsoophian, Rajabion and Namvar, 2018). This can help corporate leaders of ZARA protect information from any kind of cyber theft.
- It is also recommended to the corporate leaders of ZARA to initiate change in organizational culture that aligns well with the brand value and the goals of the organization. The main mission of ZARA is to give customers what they want. Therefore, initiating social media monitoring and social media communications can help the work towards accomplishing their well-developed mission.
The main aim of this report was to discuss about benefits of knowledge management and IT in the core operation of ZARA. The report concludes that ZARA is a renowned-organization operating in the fast-fashion industry and the organization always aims at strengthening its relationship with the customers of the firm. Therefore, implementation of knowledge management strategies can help the firm understand the evolving needs and demands of the customers. This can further help them serve customers as per their needs and desires. It is also recommended to the corporate leaders of ZARA to focus on implementation of block-chain technology that can make the entire process of data and knowledge storage secure and reliable.
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