Amazon Case Study Help
Importance of IS Tools for Amazon
Amazon Inc. has been serving worldwide customers for the past few decades; under the dynamic leadership of Jazz Bezos, the virtual shopping website helps all people to search for the products and services online (Mooers, J., 2020). Since its establishment in 1995, Amazon had a policy of using website system to fulfill their orders and improved its security gradually. Amazon has built a website service using MIS tools that has become a successful global platform for retailers to sell their products. For the purpose of ordering products, Amazon had to make sure that the systems had to be fast and reliable. The company uses a robust Customers Relationship Management System (CRM) that takes customers data through searching using data mining techniques. Amazon’s MIS systems are smart enough to analyze the customer’s information and provide the best services in the world. Therefore, Amazon’s official website is a Service Oriented Architecture (SOA) that is a centralized system with robust scaling.
Amazon opened its doors to the global audience on the World Wide Web in July 1995 and became a customer-oriented organization in the later decades. There is a vital impact of management information systems (MIS) in the successful operations of Amazon.com that allow millions of unique products on their website to be sold to millions of people. Customers are able to access their needed products using the online website, mobile phones and gadgets, and Alexa (Vaughan, 2020). In 2015, Amazon sold 1938 million products online and the web 2.0 system takes the orders of thousands of customers every single day. The MIS system allows Amazon website to operate in a time-efficient manner. Due to rapid development of telecommunication systems today, effective management of MIS systems is possible; therefore, the developed MIS system is key to success for an organization like Amazon.
Because every customers has a profile on Amazon’s website, Amazon offers several features to personalize their profile. The Transaction Processing System (TPS) allows 1 click purchase personalized shopping services and enables email communication with consumers. Amazon completes all the secure credit and debit card operations and saves customers personal information securely. An intelligent recommendation system was also developed by Amazon. Amazon offers its prime users a wife dashboard that links with their home alliances to make online orders automatically. Using the Internet of Things (IoT), Amazon was able to link the smart devices with the online services of the company to generate unprecedented big data on customer behavior and performance of sales. Sensors and RFID tags became a vital element of secure and safe online transactions and data processing. Amazon also uses big data analytics tools such as Tableau and cloud computing for enhancement of database (Vaughan,2020). Moreover, IoT revolutionized things for Amazon and its customers by connecting them over the wired and wireless internet.
Challenges Faced by Amazon in Maintaining Its information systems
There is no doubt that the implementation of advanced technology brings several challenges to organizations such as Amazon (Murrell, 2014). The widespread use of IoT applications in the company requires devices and infrastructure for reliable and secure information processing. According to Cisco experts, the number of IoT machines would increase due to smart adoption of IoT technology in Amazon. It helps Amazon to connect all supply chain elements; therefore, Amazon had to follow the international standards to connect all the devices to expand their MIS systems. That brings issues of customer’s privacy, trust among the manufacturers and Amazon, and generated moral and legal issues that could negatively impact the expansion of Amazon based on IoT systems. The impact of the environment was also a bit negative on customers because it took a lot more energy in maintaining constant connection and transferring data with high speed. Some researchers also warned that a widespread adoption of IoT systems and technologies would require replacement of old offline devices that would generate more waste. That would cause an environmental problem and raise pollution; which is why, Amazon has to rethink its environmentally friendly policy for becoming a sustainable business in the future.
Because e-commence transactions require all electronic sources and means, due to increasing competition in the e-commerce marketplace, the online selling companies need to dramatically improve their information flow inside various departments; Amazon’s employees also need to have a better idea of changing technological environment and customer’s needs. Amazon needs to create a strategy to use technology for managing information and knowledge to promote a sustainable competitive advantage. EBay is another fast-growing competitor of Amazon, therefore, the importance of strategic information systems is vital for the use of CRM to avoid any ethical issues of information systems. This is the reason Amazon is not successful with many categories of products such as clothing items. Moreover, technological changes are emerging out of IoT systems and new cloud-based technologies; the company faces challenges to use the Internet effectively for increasing its customers reach while reducing its integration costs. Amazon is also facing challenges related to security and privacy issues that generate legal wars with stakeholders (Mooers, 2020). The company needs to use the current technology and make sure that they keep adhering to the legal and privacy laws. Moreover, promotional pricing system can be used temporarily to price the products that fail to build the excitement of the customers. Managing customer’s relationships with CRM also pose some risks because the employees need to have a full understanding of buying behaviors and trends to satisfy customers. Therefore, many challenges are faced by Amazon executives in pursuit of using the latest MIS systems and tools including channels expansion, optimization of data fulfillment, and government regulations in addition to security and privacy issues.
The Role of Information System in Building and monitoring the communications
The purpose of information systems tools and MIS is to create and strengthen the relationships with internal and external stakeholders of Amazon such as customers, employees, suppliers, retailers, and manufacturers. Facilitated by the modern IoT infrastructure, the e-commerce revolution of Amazon is supped to go far beyond online shopping platform. Connecting the things with MIS and Internet technologies would build sophisticated relationships and increase customer’s trust. As a trusted e-commerce operator, customers will be able to share the right information with the company and trust its website for their personal data (Lee, J., Yoon, D., 2020). There is a huge need for Amazon to understand its customers and their trends to help the company provide the right products and services to the global consumers to enhance the quality of their lives. The IoT limitations can inhibit the wider implementation of technology in the company; which are why, some customers may be reluctant to share their information with Amazon due to such issues.
The organization has grown in size tremendously since its establishment in the mid 1990s; it has employed a diverse workforce and has adopted structures with complicated hierarchy. In the modern business environment, the technical executives are facing a problem of managing diverse workforce or remote team. In a highly competitive e-commerce environment, managers cannot afford communication bottlenecks arising from the differences of culture and technology for the long term success. Rapid advancement in technology has made the goal of effective communication possible for Amazon. Jeff Bezos understand that effective communication can overcome the challenges of employee’s resistance at the workplace Lee, J., Yoon, D., 2020). Therefore, CRM is a widely acknowledged tool used by Amazon due to its user-friendliness to improve the effectiveness of technical communications and documentations.
The communication tools and MIS systems tremendously help Amazon to improve the creative aspects of communication to help the company become a well-managed organization. The company has stakeholders such as employees, suppliers, government investors, shareholders, media personalities, and customers to form a large community vital for company’s rapid growth. The successful operations of the organizations are dependent on these stakeholders, which is why the company needs communication channels to open with these stakeholders to ensure that their needs and pain points are stressed promptly. The MIS systems allow Amazon managers to provide timely information to all the stakeholders so they could jug the organization’s performance in terms of fulfilling its social obligations.
The company uses instant messaging, emailing, and videoconferencing for effective and constant communication with the customers. Podcasting is also effective means for Amazon managers to highlight the latest innovative products and services for global customers. Podcasts allow the company managers to record voice in audio files and provide access to stakeholders for better communication and understanding of company’s offerings. Moreover, the use of webcams and electronic recording media helps Amazon executives to conduct online video meetings that virtually help employees in another geographical location to communicate effectively (DeVries, 2019). The company also uses on-demand videos so that subscribers can talk to each others through videos. The use of cell phones is a good way to exchange brief information with the stakeholders and customers. Therefore, all the electronic communication channels used by the company allow managers to effectively communicate with the audiences.
Information systems’ Competitive Advantage for Amazon
The main purpose of management information systems MIS is to enhance the company’s ability to provide users with the right information needed to do any task efficiently and effectively. The information is stored electronically using MIS databases instead of using the old traditional manual records or worksheets; Amazon uses customers information databases and use custom formats to enhance the efficiency of data collection and processing for enhance decision making (). For example, the MIS systems help the company to increase its sustainable competitive advantage over rivals such as eBay. It helps the managers to provide each customer the information they need to make the purchase decisions or actions. It helps to increase the loyalty of customers because they know Amazon cares for them and their data. A sales manager can look into the sales data using MIS tools and get a better overall picture of department’s performance and efficiency (DeVries, 2019). Therefore, Amazon is benefitting from the MIS tools significantly in terms of increased profitability and customer’s value.
The MIS systems are benefitting both managers and sales teams using the same databases. The records are easily available to find out which customers have been contacted; in case of paper-based systems, Amazon would never be able to dig the in-depth information regarding customers and would take much longer time to complete its transactions. Moreover, custom formats make information systems more effective because the data is easier to use. A sales manager can easily see the week’s activity and performance of his subordinates on the screen. A complete list of orders weekly is available from the database to measure the targets achieved by the company. Based on the same data, the sales managers can build a bar graph or see vital analytics to understand the volume of sales success. Therefore, the information systems at Amazon help decision makers to get the real time information and make the best decisions.
In addition, if the production line is slow in the company, the real time information available to managers can quickly help them determine the reason for the slowdown. The benefits of using MIS data help to convert it into useful information for facilitating the managers to act upon it. Information systems are also flexible and can be enhanced in features as the company’s needs grow (Datta, 2010). Often, the company is able to grow the technical parts of the systems without disturbing the entire system or workflow. Therefore, MIS systems help to create the value proposition for Amazon to help its customers gain the best products and services using technology.
Conclusion
In a highly competitive global e-commerce environment, Amazon is aiming to enhance its customer’s loyalty and technology infrastructure using the robust MIS and IoT tools for long term competitive advantage. To expand the business across the globe, international challenges are forcing the company to improve and secure its technological infrastructure. The company uses robust MIS, CRM. And IoT tools to move towards better customer’s satisfaction and help to define its value proposition to global audiences. The company in a challenging political and economic environment can have better understanding of customers needs using MIS systems.
References
Datta, P. (2010). A preliminary study of ecommerce adoption in developing countries. Information Systems Journal, 21(1), 3-32. doi: 10.1111/j.1365-2575.2009.00344.x
DeVries, D. (2019). Contemplative vision. New York, NY: Church Publishing Inc.
Lee, J., Yoon, D., & Boivie, S. (2020). Founder CEO Succession: The Role of CEO Organizational Identification. Academy Of Management Journal, 63(1), 224-245. doi: 10.5465/amj.2017.0091
Mooers, J. (2020). Review and Analysis of All Shareholder Letters from Warren Buffett and Jeff Bezos. SSRN Electronic Journal. doi: 10.2139/ssrn.3584336
Murrell, M. (2014). Book Review: Brad Stone. The Everything Store: Jeff Bezos and the Age of Amazon. The Journal Of Electronic Publishing, 17(2). doi: 10.3998/3336451.0017.209
The New York Times Versus Amazon: Is Jeff Bezos’ head still in the clouds?. (2018). Journal Of Organizational Psychology, 18(3). doi: 10.33423/jop.v18i3.1290
Vaughan, A. (2020). Shrinking Amazon. New Scientist, 245(3274), 14. doi: 10.1016/s0262-4079(20)30574-1
