In his article "Do You Have Too Much IT?" Andrew McAfee recounts the IT perspective of Inditex Group's Zara stores, which beat out their competition using minimal technology. McAfee (2004, p. 18) argues that most companies buy too much IT for fear of not having enough in the rapidly changing technological environment and that they have ended up, according to Morgan Stanley, just throwing away $130 billion of it. McAfee's assertion is based on the fact that despite their substantial investment in IT, major clothing manufacturers cannot keep up with Inditex's rapid production operations.
IT is arguably an area in which it is extremely easy to over invest. A task that can be performed with an adding machine can be done with pencil and paper plus calculator, or even just pencil and paper. Lacking pencil and paper, one can use an abacus. Furthermore, too much IT just gets in the way, much as too much of anything can do. Too much IT can slow down the process rather than facilitating it.
On the other hand, chucking IT to manage sales on dumb terminals and file reports with no access to inventory figures is a stretch. Discount giant Wal-Mart uses substantial amounts of technology, and it achieves excellent efficiency, while using virtually no employee power to do it. The products order themselves by virtue of RFID tags, and suppliers ship new ones as soon as Wal-Mart starts to run low. If Wal-Mart tried to operate using Zara's procedures, it would sink.
While Inditex is to be commended for stripping away unneeded IT, which is certainly a good move, any attempt to expand the company's approach across the board is ill-conceived. Floppy disks can become lost or damaged, while information sent electronically can be retrieved more easily through network backups. Yes, inventory can be kept on index cards by hand, but if the business's size warrants it, RFID technology does a better job with no human...