Zara: IT for Fast Fashion

Problem/Issue Statement

The problem in this case is Zara, which is owned by Inidtex, is currently using an unsupported DOS based operating system at all of its point of sales (POS). The company is looking to expand, but currently updating their POS operating systems do not seem to be a top priority as a focus on high-fashion and focus on the customer are the top priority. Also, their providers of hardware have not made any assurances that they will continue to support DOS with their new machines.  

The symptoms of the problem that Zara faces is no support for their DOS operating system because it is unsupported, updating equipment will not be compatible with the OS, stores are unable to have an instant look at inventory and must rely on hand-counting, and an inability to provide internet shopping while having problems processing mail-order returns.

The scope of the problem reaches all 531 Zara locations. Zara makes up over a third of all Inditex stores and its focus is on high fashion that meets their specific customer’s needs. The company is looking to expand its business and they are uncertain if their current IT systems and OS will be able to provide them the growth they need.

Situation Assessment

Zara is currently using a tried-and-true method of processing all of their sales. With very minimal software and little hard ware, the Zara locations are able process their transactions at a terminal, store the information on a floppy disk and transmit that information over to corporate. This system works very well for Zara as they have no issues with having to call IT to help trouble shoot any issues. Also, when starting up a new location, terminal setup is just as easy as interesting two floppy disks to get the terminal up and running to process sales. The problem that exists for Zara is the OS that they use has become unsupported, so that they are facing a very high risk of running into problems when looking to expand as their software and hardware may not be available. The system that they have in place also has problems with inventory tracking and processing returns.

The decision criteria are to see whether it is necessary to upgrade their system or not. Does leadership believe that with future expansion the company will not need to upgrade terminals or should they focus on changing them now so they will not run into problems down the road. Also, the company likes to spend it’s money on location and also inventory. We can see in their profit margins that very little is spent on overhead and this is evident with their technology. Management needs to see if it would be a wise investment to upgrade its machines or focus on what makes them profitable: fashion.

List of Plausible Alternative Courses of Action & Evaluation

1. The company can continue with its tried-and-true method of processing sales as this has worked very well for them in becoming a profitable and expanding company.

2. The company can upgrade its POS terminals and spend money on building a better IT infrastructure. The company can switch over to a supported OS such as Windows, Unix, or Linux.

For the first decision of continuing their method of processing sales and tracking inventory using the DOS operating system, it has very little imagination. It has been effective though for stores as they have been able to spend less time focusing on any IT problems, and more time focusing on the customer. They have very little issues, if any, and the system is very easy to set up at new locations. The problem that exists is the machines that they use that support the DOS OS may not be around as the hardware vendor has made no assurances that the hardware will continue to support DOS. The system is flawed with inventory at store levels as managers are not able to look at what is on stock, rather they estimate the amount or hand count.

The second option has more imagination as the company will be able to “refresh” its infrastructure and operating system. With having this new technology it will lead to better inventory control and can lead to opening the door to online sales and processing better returns. This may cause some headaches in its initial roll out as managers and associates were able to focus solely on their customers and not on the technology. The company has to be careful that any implementation of these products meets the amount of IT infrastructure they want to have without getting too “fancy”.

Recommendation

A quality and logical recommendation for Zara would be to upgrade their systems to a Window, Unix, or a Linux Operating System. This is necessary because the company already doubts if their current OS will be available in the future with current hardware. They cannot get assurance from their supplier that the future hardware will be compatible with the OS. If they are able to expand rapidly (which they anticipate) and then all of a sudden their hardware is no longer able to be provided, they will run into massive issues. The company has been able to claim a very high profit margin as well as a healthy net income. By increasing their assets to include the new equipment these numbers will be sure to drop, but they will be able to offset those numbers by increasing the sales they are losing from not tracking down inventory for a customer, having accurate and reliable inventory numbers, and as well as creating an internet option for shopping. By “biting the bullet” and just upgrading the system the company will be to make sure that in future expansion they will not need to overhaul the whole system which will cost the company millions and also lead to lost sales because of shut down operations in order to revamp their infrastructure. The company can revamp nor or later, I would advise doing now so they do not run into future problems.

Presentation

When presenting this case I would illustrate how much money is being lost because of their current operating system. Yes the company is profitable because of its current system, but they are losing out on dollars because of inventory and also not being able to provide internet sales. Their current system does not allow this. By being able to provide a dollar value for these elements we can see how much the company can gain and also what it would cost to implement this overhaul of equipment. 

iPad's for Success

Mr. Armstrong,

I am aware of your conversation with Mr. Wolfson regarding a potential switch to iPads for our sales staff. I believe that this switch is important moving forward as it will provide better engagement, increased functionality, and overall a better look for our company. Currently, we are using bulky laptops which can be quite cumbersome for our sales staff.  These laptops were purchased two years ago and they will be reaching a point of obsolescence in the near future. In order to prepare for that and also to keep our organization up-to-date on technology, I suggest we invest in iPads for the future success of our operations.

                  When we have face time with medical doctors our sales staff has a very limited time to engage them. It is important to capitalize on that 3-5 minutes that we have with the doctors and we can do that by “wowing” them with the visual presentation that an iPad can offer. Currently, the laptops are doing a fine job with capturing the attention of the doctors, but moving forward we need to embrace the technology the iPad has to offer with its visual display and also its maneuverability. We are seeing some of our competition in the sales office with tablets and the engagement they have being spent on the presentation rather than setting up a laptop to show our presentation. We need to make the most of every minute that we have, and I know the iPad can achieve that.

                As mentioned before, our sales team is able to maneuver better with an iPad because of its sleek design and it is not clunky like our current laptops. Not only will we be able to have a better visual representation we will also be able to increase their productivity with different applications that will improve their efficiency when making a sales pitch. They will be able to plan their locations better and provide different notes about locations within that application. We will also be able to store that information in cloud applications so they can be accessed by any member of our sales team. Having these applications will help improve their efficiency and also increase their engagement with knowledge of the medical professionals and also office personnel.  

                Our sales staff appearance is very important in closing a deal. We always make sure they are dressed well and also present well, but are we paying attention to what the new technologies are and what that means in our staff’s appearance. When our staff is competing with other sales staff and also showing up to conferences it is important that we are up-to-date with technologies and not seen as the company that is lagging behind. When all the other sales staffs are pulling out tablets or other portable devices and we are left with pulling out clunky laptops, it will set the wrong impression for the company. We will look like we do not invest in our sales staff and also that we are out of touch. It is important to upgrade to this new technology in order to improve our brand image.

                The cost of iPads for our staff of 2,500 will cost us  $1.5 million. While this may be looked at as not the best use of our sort term capital it will pay off in the future are more sales organizations are migrating over to this technology and away from laptops. The cost that we spent on laptops two years ago was $3.75 million. We will be able to get much more use out of the iPads than out of the laptops because of its functionality and this would be at over half the cost of laptops. It is important for the image of our company to do this because we have a short amount of time to enagage with medical professionals and we need to take advantage of every second and I believe that an iPad will help us achieve that. 

P&G Reflection

We here at P&G were presented with some very interesting and intriguing options for reducing time in data collection during our clinical trials. The options that we were presented were to increase our human capital, digital imaging with faxing, or use Web-Enabled EDC system.  Going into the presentation I had conflicting ideas of how we should move forward, but after the presentation I am sure that I have come to my decision.

One of the most important questions that I needed answered going into the presentation was if a reduced time a drug spent in clinical trial really resulted in increased sales. There were many pros and cons to the different options we were presented, but we were able to see that a drug that spends less time in clinical trial using the Web-Enabled EDC. Using Web-Enabled EDC we can see that a drug does not have a long “data-lock” time, meaning the work that goes into filing the trial is reduced. With the reduced time we are able to capture the full value of the drug. We can also see other expenses being cut with reduced paper and staffing level.

Going into the presentation I felt an investment in human capital would be a logical recommendation as the staff that we currently have is familiar with the program. In trials they were used to the paper format and were comfortable with it. Why fix something that was not broken? I was not thinking of the potential future costs of what we at P&G could be receiving. Looking into the future it is necessary to be innovative and this Web-Enabled EDC system will do just that. It will provide us a good opportunity to increase our fast growing pharmaceutical business while also helping to keep future costs down. In my opinion, the Web-enabled EDC is the best solution for P&G.  

P&G Case

What is the Problem?
The problem that Proctor and Gamble faces is the amount of time it takes for them to have a prescription drug go through the clinical trials because of the elapsed time between the collection of the last piece of data on the final patient in the study and the locking of the database, which is known as Data Lock. The more time that a prescription drug goes through a clinical trial period because of long data lock times, the company loses out on potential sales and also loses on time that a patent protects their drug from hitting the open market to have it only be manufactured by a generic drug company. There is a value to the amount of time that a drug spends in a clinical trial, and P&G is looking to capture the most amount of value as their prescription drug business was a major driver of the significant growth in P&G’s Health Care Segment.

What is the Distinction between the problems and the symptoms?

The problem that P&G is facing is the amount of time that is needed during a clinical trial for the patient’s information to hit the Data Lock stage. The symptoms of this problem are the need for double-entry of data under the paper-based system in order to verify consistency, the need of a third person to resolve any discrepancies, the lag time it would take a CRA to resolve any violation queries, and the bulkiness of binders used for the hundreds of patients used in a clinical trial.

What is the Scope of the Problem?

The scope of the problem for P&G is for them to find out what is causing extended lag times which prevents information from reaching the Data Lock stage quicker. While it is important to be thorough in completion of the data being entered, Ray D’Alonzo is looking for a way to shorten this time which will help expedite the Clinical Trial period while also increasing accuracy of the data.

What is the context of the Problem?

The context of the problem that D’Alonzo and his staff face is whether to overhaul the current paper-based system in order to implement a new and assumed to be quicker method of data entry. D’Alonzo sees the paper-based entry system as cumbersome and often there are a lot of discrepancies which causes a lag time. Every extra day that a prescription drug spends in clinical trial, the company is losing out on lost sales. D’Alonzo has options to overhaul the system, but those methods involve new, untested methods.

What are the decision criteria?

The decision criteria for choosing a method for data entry should include what will create the most value for the organization. The current method that they utilize is slow, but it works for them. The company is generating money with its current system. Is it worth upsetting the apple cart in order to potentially drive more value with a new technology? The value that can be created is based off of decreased data lock times which will help expedite the clinical trial periods.

What are the alternative courses of action?

1. P&G can continue with improvements to their paper based methods but increase the size of their staff and also use express shipping methods onsite.

2. P&G can utilize a digital imagining system that would allow for digital transmission of data back to P&G from the medical centers.

 3. P&G can implement a Web-enabled Electronic Data Capture (EDC) system to input data.

How does each of these address the key problem?

1. With increasing the size of the staff in order to take care of the data entry using the paper based system it will help cut down on times and speed up the process. The staff is familiar with this system so there will be no need to re-train the entire staff and lose out on any productivity. By using express mail, they would also be able to quicken the delivery process which will allow for more paperwork to be completed by the increased staff.

2. Digital Imagining was a way to fax over information which cut down on delivery times of data from a medical site to the company in order to input the data. This system also allowed for familiarity from the staff so again there would be no need to retrain staff.

3. Web-Enabled EDC addressed the key problems of lag time as data was able to be inputted directly from the investigative site. It was also able to identify any problems in the data so that they can be corrected immediately instead of reconciled during the second entry stage using the paper-based system. No double-entry was required and the information would be made available immediately to all parties involved.  

Through what theoretical concepts should one’s evaluation of the alternatives?
The theoretical concept P&G must use in order to evaluate the alternatives is the value lost in their product in the time it takes for the prescription drug to go through the clinical trial period due to the increased times it takes to get to the Data Lock Stage.

How does the evaluation relate to the decision criteria developed?
The evaluation relates directly to the decision criteria developed as P&G is looking for ways to capture the value of any potential lost sales. It is a very expensive venture to develop and market prescription drugs. By having the drug tied up due to antiquated methods, the company is only losing out on lost sales because the drug is not available to consumers.

How imaginative should the evaluation be?

The evaluation should be very imaginative as P&G should look to create innovation and also invest in a method that is a viable long-term option. At the time of P&G’s decision it was a very interesting time in the world of computers and the internet. The internet was supposed to be the future and it was still working out some of its growing pains. A few years before this decision, a dot-com bubble burst and a lot of companies were left for dead. P&G needed to be careful of making this decision but it realized that the paper method was becoming antiquated and there had to be a more innovative way.

What is a quality recommendation?

A quality recommendation for P&G would be for them to invest into the Web-Enabled EDC as the internet appeared to be the future and P&G would be an innovative company in going in this direction. The problem that P&G was facing was the amount of time it took for the information to hit the data lock stage. This method of data input directly related to this issue. It was shown that Web-enabled EDC cut down on the time and also the errors in the data input.

What is a logical recommendation?
A Logical recommendation for P&G would be to invest in more human capital in the paper-based data entry method. The system that they had in place was working for them. Their prescription drug business was a sales driver and they were able to use the paper-based method all the while. The problem with the paper-based method was the amount of time it took to get to the data lock stage. By investing in more people to come in to help the problem and also looking into express shipping, they would be able to get more done at a quicker rate using the current system. It would require no re-training as the system would not be overhauled and everyone involved in the process would be familiar with the program.

If I were presenting, how would I sum up the case?

I would sum up the case by stating that the data lock times are causing tremendous delays in prescription drugs from going through clinical trials. The time is from the paper entry method which has flaws in it that include the need for data to be entered twice and the need to go through the information again to correct any mistakes. Also, there is a cumbersome amount of binders and paper work for any given trial. The technology exists that we can be able to expedite this process, and by doing so we can get the prescription drugs out of the clinical trial periods and into the market place. By doing so, we can capture the value of lost sales from days that it is not on the market and also buy more time with our patent protection.

What key visual aids would I present?

I would use charts and diagrams that illustrate the amount of time used for each alternative. I would also model a way to show the value of lost sales because of the time delays we are facing. It is important to show a business what they are missing out on. The current method they are using is a time-intensive method, and by looking at key alternatives we can expedite the process and gain sales on those lost days.

How would I “sell” the recommendation?

I would inform the P&G staff that the internet is a world of opportunity. They have the ability to venture into something that is innovative and also proven that it has the potential to work. They would be one of the first organizations to get into this and it would have substantial impacts on their future. They could have the ability to outperform some of their major competitors and become a big player I the market place.

What other delivery considerations should I keep in mind?

It is important to inform the company of all the risks associated with any venture. While the positives are the money, a time line would need to be created in order for them to understand there might be interruptions in productivity. At the beginning of implementing this technology, it may not move as quickly as previous methods, but over time it can make a substantial impact. Also, any security risks would need to be dispelled in order ease the minds of those concerned with information being exposed. Other than cost of software, information would need to be made for all costs that could be potentially involved. Informing them that the availability of computer and internet access is not there yet as the infrastructure is slowing being made. In order to make a “wowing” presentation, all aspects need to be considered as it shows understanding of what is involved and how it can positively impact the business. It is my belief that Web-enabled EDC is the way that P&G should go into as the innovation is there and also they have shown its success in trial runs with the program. 

Visio Blog

I just got out of a meeting with our Operations Department and we have found that there has been some communication break downs from our Corporate Offices to our Stores. What we are seeing and hearing from our field managers is that our recently opened stores are not executing the processes that Kohl’s has in place properly. We are seeing in each new location that local management teams are executing the programs that we have in place improperly and doing these processes their own way. With Local Store Management doing this, we have seen our metrics in Customer Service Scores, Items Not on Sales Floor, and Inventory Performance slip at these individual locations; this is a huge problem that must be corrected before they start affecting our Bottom Line.

This problem is isolated to our most recently opened stores. Our “Legacy” stores have continued to stick to the processes that we have set out in place, but as we began our expansion that message seems to have been lost. In order to correct this problem and also prevent this from happening in any future expansion, our Operations Team has suggested that we create a Best Practices for each of our processes that we do at Kohl’s and create illustrated flow charts and diagrams so that they can be easily expressed and distributed to all of our staff. By having this system in place, we can visualize our concepts to all current and future employees so that we can ensure that each of our processes is executed seamlessly across all stores in our company. We feel strongly that the programs that we have studied and put in place are effective and this shows as our “Legacy” stores are outperforming those stores that deviate away from our processes and practices.  The deviation that has occurred at our recently opened stores has been due to the hiring of external candidates that are not familiar with our Kohl’s way. By each location management having different perspectives and experiences, they have implemented their own philosophies that do not mesh with our standards and procedures. This has the potential to be devastating as the customer is not receiving the correct Kohl’s Experience and will most likely be averse to shopping in an environment that does not meet our standards and expectations.

What we are suggesting is to invest into Microsoft’s Visual Drawing Tool called Visio. What Visio does is it lets us create visually appealing diagrams, flowcharts, and instructions that can be dispersed to our staff so that they can clearly grasp our ideas and processes. By having this tool and utilizing it to express our Best Practices, we can help ensure that each individual store and any future stores are adhering to our guidelines and doing things the Kohl’s Way. Since these diagrams and charts are so pleasantly appealing and easy to understand, it will make training for our Management Team and Associate base fun and easy. Every detail of any process can be visually represented so that it makes learning a breeze for anyone. Also, it can clear up any confusion as every step is detailed and represented.

The cost to purchase this program is $589 per subscription. We will need to have the subscription for each of our staff in the Training and Development Segment of our Operations Department. With a staff of 30, the initial investment of the software will cost us $17,700. We will need to train our staff and have them test out the software before we go live with its rollout. The Training and Development staff will be required to become very knowledgeable of the program and they will require more training on this than with a normal program. We will need to solicit the expertise from the Microsoft Staff to come in to train our employees. The time line we are expecting for all training is three weeks. We will break down our associate base into three-groups of ten and give them one week of training each. By doing so, we will be able to mitigate any lost productivity by taking our staff away from their normal assignments in order to train on this new software. The option to do the three-week training program with Microsoft is on the expensive side with a cost of $150,000, but this schedule will prevent us from losing value in lost productivity by doing the training in one bulk session. The cost allocated to each associate is $5,000 for a week’s long intensive training session.

After our Training and Development staff has gone through the proper training, we will have them spend one-to-two weeks on developing and converting our Best Practices into the Visio Program so that we are able to distribute the images to our staff. Instead of incurring cost with printing and shipping these images to our stores, we will be able to host them electronically on our Store-side website so that they can be easily accessed and printed locally at each store.  Once they have been hosted, we will allocate funding to all of our stores so that they can properly train and refresh our staff with our Best Practices. Funding for this refresh will cost $10,000 for our 100 stores. In order to ensure the proper training and steps have been taken, we will require that our current Store Auditors are observing Local Store Management and Associates of Best Practices and they will pass or fail a store based on their execution of Best Practices.

With an investment of close to $180,000 for the software program and all necessary training and completion of the diagrams and charts, we are optimistic that it will directly translate into increased sales at our “Legacy”, recently opened stores, and any future expansion of stores. As was mentioned before, we have been seeing drops in key metrics at are recently opened stores. These drops have been attributed to Local Stores not complying with the Best Practices that we have in place. This lack of execution has caused our Customer Service Scores, Items Not on Sales Floor, and Inventory Performance numbers to all decrease. All of these numbers are paramount in ensuring that our customers are getting the right Kohl’s Experience. Quite the opposite has occurred in our recent markets and we are concerned that if the ship is not righted now, it will lead to potential disasters and customers in these new markets will be turned off by our Brand. Doing so, will directly decrease sales and it will make it difficult to branch out and survive in these new markets.

The investment of $180,000 will be a one-time investment as the Best Practices will be standard for all current and future stores. Having these plans in place will ensure that proper execution is followed. By correcting the issues now in our current recently opened stores we expect a sales turnaround of 15% by year’s end. This amounts to a recapture of $50,000. In one year, we also expect that our Inventory Performances will increase and it will save each of our 100 stores an average $10,000 in lost goods. By ensuring that our Items Not on Sales Floor report trends downward and more goods hit the floor, we can expect in one year that we see all of our stores increase sales a total of $50,000. With recapturing the value totaled for all stores, in one year we expect a return of $200,000. The investment will pay itself off in one year and by having these programs and visual learning guides in place we can help ensure that all current stores will continue to grow at a healthy rate each year with our programs and it will also help future expansion as any future locations will be able to function seamlessly with the Best Practices that we have implemented.

Business Impact of Ubuntu

We here in the Finance Department are always looking for expense reducing activities that will positively impact our business. One of those activities came up in our Quarterly Meetings with our I.T. Staff where we laid out a timeline of events that are on the horizon. At the end of the year, our lease will be expiring on our Dell Desktop Computers which are bundled with the licenses for the Microsoft Office Suites. Instead of renewing our lease and purchasing another license for bulky software which we do not use to its full potential, we should as an organization look into Thin Client Computing with Desktop Virtualization. Making this migration, we have the potential to save this organization close to $150,000 in one year.

            As mentioned earlier, our lease with our Dell Desktops, which we use in all of our offices, is set to expire at the end of the year. The cost per desktop is $533. Not factored into that cost are the software programs which we run (Microsoft Office) which amount to over $250 per work station. Per work station, we are spending close to $800. In years past, we have looked into cost-cutting options of reducing the amount of work stations or reducing the amount of licenses but we have found in all of our research that these moves only reduce productivity of our staff.

In an expense reducing venture and as we look to become a more innovative organization, I believe it is in our best interest to look to invest in a Thin Client such as the Google Chromebook and utilize a Virtualization Program to run the open-sourced Ubuntu Operating System. While this may sound like gibberish, it is an exciting opportunity that is actually user-friendly and familiar looking to any computer user.

A Thin Client gives us the bare-bones of what we need. A Google Chromebook is an exciting Thin Client that does the basics and costs $250 per unit. It provides us the essentials of a graphic interface and an internet connection with just enough storage to run what we need. Instead of coming pre-loaded with our familiar Windows Operating System, we need to install a Virtualization Player, which is free, to operate the Ubuntu Operating System which again is free. The way it works is that the Thin Clients will become guests to a host server and we will be able to share and create documents just as we would now but at a reduced cost.  

The Ubuntu Operating System which I have been mentioning is a free Operating System. It is an open-sourced system which means that its coding was created publicly and it is a variation of the Linux software. Right off the bat, even though it is publicly created, modified, and studied, it is regarded as one of the most secure operating systems out there by the United Kingdom’s Security Branch of their Government. When the Operating System loads it gives the user a similar interface to that of a mix of Windows Operating System and Apple iOS. It comes with applications that look and feel the same as Microsoft Office Suite, known as Libre Office. Since these applications are pre-loaded, we do not need to pay the excessive costs of software licenses every time we get new computers. The familiar web-browser FireFox is also preloaded into Ubuntu allowing first-time users to not miss a beat when converting operating systems. Users are also able to add applications to the operating system which are free that can improve functionality of the operating system. By switching over to Ubuntu we will easily safe the costs for software licenses which we currently spend that amounts to $250 per work station.

In order to make a move to switch over we will need to create training videos and programs for our staff. We will also need to train our current IT staff on Ubuntu so that they are able to troubleshoot any issues that may arise. The great thing about Virtualization is that we can currently “beta-test” in our own office free of charge with our associates. We can load the Virtualization Player onto our current desktops and have it run the Ubuntu Operating System. We can do this right away and have users periodically test out the conversion before we go live with the switch when our lease on the computers is up. Our IT staff can come up with simple training exercises to do “normal” functions on the Ubuntu OS as they currently do now. By familiarizing the staff as soon as possible, it will make the conversion less stressful on our users. While this will take away from some of our associate’s current productivity, the investment in the long run of having this cost-saving operating system with a thin client will help save the company a lot of money. We anticipate all training and conversion costs to total $50,000.

We are currently spending $800 per work station here in our offices every three years with our lease. The technology that exists out there can help benefit us from a cost perspective and also productivity. By switching to a thin client and using the Ubuntu Operating System we can be paying $250 per work station and have the cost be constant instead of having to renew leases every three years as the Ubuntu Operating System is refreshed every day as the system is open-sourced. With the 200 work stations that we currently have and also with plans for future expansion to another 150 stations to support our growing work force we would be spending $280,000 on hard ware and software. By making the switch to Ubuntu and a thin Client we would be spending $87,500. Factoring in conversion costs we are looking on spending $137,000 in a one-time charge saving the company $147,000 in one year. Having to not renew leases and pay licensing fees for software will only help this company in the long run as we do not anticipate paying those fees with switching to Ubuntu.

I believe this exciting conversion will help company in the long run as it will be an expense reducing measure that will not interrupt the daily processes of our associates. In fact, its user-friendly nature will make creating and sharing reports just as easy as they are now at more than half the price. We can currently test out this conversion and I am sure the associates will adapt nicely to its inviting interface. The thought of having to buy expensive equipment and software are a thing of the past, and as we as an organization look to become more innovative, I believe we have found a good starting point which will drastically cut our computing costs and we can reallocate those funds into some much needed programs. 

Business Impacts of Blogs

The thought of blogging being one’s mindless ramblings has changed and evolved to a vehicle with which businesses use to attract new customers, convert leads, and engage current customers. In this digital age that we live in, we as a company need to embrace this content-rich and aesthetically-pleasing tool to improve customer engagement and promote brand awareness.   Blogs will enable us to do this by their ability to drive web traffic.  

The way blogs work in driving web traffic is for every blog post created we index another page on our website. With blogs being created every week we can index multiple pages which would show activity on our website which would boost our rankings in a search engines like Google. Typically, our webpage gets updated every so often making its activity almost stagnant, with our users typically seeing the same images and messages during their visits. Without seeing much freshness, we are not converting the right percent of visits into sales. By creating a blog on our webpage we will be able to drive more web traffic from organic searches and links from social media sites which will convert into a higher volume of sales.

We here at Kohl’s are in the clothing business and our customers are able to purchase more when they are able to see more. When users are able to visualize how our clothing fits into their lifestyle or how our product looks in an entire outfit they are inclined to buy not just single items, but whole outfits and products. By creating a clothing and lifestyle blog on our website we can create more organic searches from Google and also have our users sharing our content on social media platforms from Pinterest, Twitter, Instagram, and even their own blogs. By showcasing new product lines and styles we create new forms of advertising, which are currently less expensive than our paid ad searches.  Not only are they less expensive but we have tracked some of our products shared on some of the most well-known fashion blogs and we have seen a 30% increase in their sell-thru within 2 weeks of the blog post.

In order for our venture into blogging to work we need to pursue a fashion blogger with a healthy following. This will not only bring their following with them, but we will also be able to introduce our customers who are not familiar with this blogger or blogs to this exciting platform. In our estimation to bring a blogger on would cost Kohl’s $100,000 a year. We currently have the infrastructure to create a blog page for the blogger and also the social media platforms to help expand its reach. While building up the blog we need to exit the paid search form of advertising as the creation of blogs will supplement this expenditure. We currently spend close to our competitors JC Penney in paid Google searches with $2.46 million a year. Our paid searches are no longer converting into sales as we hoped and we are encouraged by the initial conversion that blogs and social sharing have given us. We feel that creating blogs are our future in creating web-traffic and will help boost our revenue streams and reduce current advertising expenses.  

Business Impacts of Google Drive

Here at Kohl’s, we work in an environment where we need to collaborate, communicate, and operate in an efficient and seamless manner. As executive leaders in this organization, it is my belief that we are not currently utilizing the appropriate tools in order to achieve this. The current program with which we create and share reports is the Microsoft Office Suite. While the program has been used in our offices since we started, the program currently does not offer the options that we need in today’s business environment while also we continue to pay for features that we rarely use. After examining our current program with other options the I.T. Department and Operations Team have come to the agreement that we should exit our current subscriptions with Microsoft Office Suites and utilize Google Docs in order to create and share our reports.   

The standard in business reporting and document creation has always been Microsoft Office. In order to support the software on all 15,000 personal computer stations which are on a three year lease costs the company $300,000. We also have portable devices carried by our upper management staff which requires a subscription as well which adds another $100,000. In total we are spending $400,000 on antiquated document creation software that limits a user’s accessibility and collaborative efforts.

Google Drive presents us with an exciting opportunity which will allow us to work collaboratively and from anywhere on the Cloud for free.  Unlike Microsoft Office, we as Executives can access and create documents from anywhere and share with anyone using Google Drive. We can stay informed with sales, merchandising, and store reports while we are constantly on the move instead of having to rush to a work station in order to create, share, or edit documents. Just as portable devices brought us the ability to stay in constant contact with emails, Google Drive gives us the ability to stay informed and work together from anywhere.

As was mentioned before, using Google Drive is free for us to use, but there are costs associated with converting over from Microsoft Office. Since Microsoft Office has always been the standard, our users have become familiar with its interface and functions. Even though Google Drive acts in the same way as our current program, there will need to be a training period as well an understanding that there will be a dip in productivity in the roll out. In order to create a training video and carve out hours out of our staff’s day to complete the activity will cost the company $100,000. This will be a one-cost as opposed to the 3-year subscription cost on our leased work stations.

It is our belief that in the long run having this program will increase future productivity by our staff because of the ability to work seamlessly and with one another. The initial invest of $100,000 to convert over to Google Drive will figure to pay itself off within the next three years as our users become more familiar with its accessibility and functionality. While the current program is “not-broken”, it does not effectively meet the demands that our staff needs in order to have all information accessible to them from anywhere. Google Drive will be an exciting program for us here at Kohl’s as we will be able to work more cohesively while reducing expenses on expensive programs that do not keep up with our business needs.