BUS362: Assuming that Zara Intends to Upgrade its IT Infrastructure Before Investing in a New AI Based CRM System: IT-ENABLED BUSINESS TRANSFORMATION Assignment, SUSS, Singapore

Question 4

(a) Assuming that Zara intends to upgrade its IT infrastructure before investing in a new AI based CRM system. Zara’s management is mulling over valuing the IT investments. They are planning to commit to a five years (long term) loan for the project. Given this long period of time, the time-value of money is an important consideration. They are able to project the benefits (increased revenue, cost savings) as well as the expenses over the same period. Discuss the IT investment by explaining the six (6) financial valuation methods and then selecting the most appropriate one (1) of the six (6) together with your justification.

(b) Given Zara’s vast overseas operations and diversified IT assets, an effective process for making decisions concerning IT in a given situation is vital. Such decision making needs to be guided by both IT and business leaders.

It would also require inputs from key stakeholders and experts. Discuss the three (3) decision-making mechanisms by explaining each of them to Zara’s management. From these three (3) decision-making mechanisms, recommend the most suitable one (1) and provide your justification.