General information system management: Amazon Case - Term Paper Example

? GENERAL INFORMATION SYSTEM MANAGEMENT by goes here] Presented to [your goes here] [your goes here] [your university’s name] [due date of the paper] TABLE OF CONTENTS CONTENTS PAGE # 1. Introduction 1 2. Name of the company 1 2.1 Description of the Company 1 3. Management Information System 2 3.1 Working of an Information System 4 3.2 What Factors drive the Use of IS in Amazon Company? 5 3.2.1 Need of Information Management 5 3.2.2 Details of Customers’ Orders 6 3.2.3 Need of Information Retrieval on Demand 6 3.2.4 Need to Ensure System Consistency 7 3.3 What are those Benefits that MIS provides to the Amazon Company? 7 3.3.1 Accuracy 8 3.3.2 Timeliness 8 3.3.3 Completeness and Relevance 8 3.3.4 Consistency 9 3.4. Applications of Management Information System 9 3.4.1 Assists in Developing Strategies 9 3.4.2 Data processing 10 3.5 Limitations of Information System 10 4. Conclusion 11 References 12 1. Introduction Before going into the discussion regarding use of information technology in a company, let us first describe information technology in order to get a better understanding of how use of information technology can prove to be beneficial for a company. Schneider (2010) states, “Information technology is the use of computers and software to manage information”. Information technology department of a company performs various functions related to the management of information. Some of the core functions of information technology department include storing, protecting, processing, and retrieving required information. Computers, servers, and data management systems are some of the key components of an IT department. These components perform various complex functions related to management of information. IT department of a company plays a critical role in the success of the company in the 21st century. Today, there is hardly any company or organization, which does not make use of information technology for managing data and information in an organized way. 2. Name of the company The name of the company, which I have selected for analysis, is Amazon. Let us discuss how this company makes us of information technology tools, such as, management information system for carrying out the business tasks in an efficient manner. 2.1 Description of the Company Amazon is one of the leading global internet companies of the world. It is a platform for the sale of different kinds of products such as books, toys, furniture, and music CDs. Amazon holds the pride of being the largest retailer of America. Amazon Company was launched online by Jeff Bezos in 1995. Amazon S3 and Amazon EC2 are those products, which have contributed significantly to the success of the company. Farmer (2008) asserts, “Their core competency is their ability to develop and leverage their technology stack, including SimpleDB, EC2, and S3, towards making retail ultra-efficient”. Amazon Company has many competitors who are trying to snatch the market domination from Amazon but none of the competing companies has been successful in the purpose yet. Some of the major competitors of Amazon include Elastra, eMusic, and Alice.com. It is due to the implementation of an effective and efficient management information system that the company has achieved market domination in a very short span of time leaving behind all of its competitors. At present, Amazon is recognized as one of the largest online shopping companies of the world. In the later part of this report, we will discuss those factors that are driving use of the information system in the company. We will also analyze the impact of information system on the company in terms of benefits and limitations. Let us first get to know what management information system actually is in order to get a better understanding of the use of information system in Amazon Company. 3. Management Information System Oz (2009, p. 9) states, “Information is the lifeblood of any organization”. Management information system means management of collected information, which is required to administer different business activities. According to Abel (2008), management information system deals with the use of information technology tools to help employees carry out their job responsibilities regarding information processing and management. A management information system is a part of internal business control system that manages company’s documents, people, procedures, and information technology (Martin 2010). Stahl (2008, p. 1) found that information systems promote efficiency and optimal control of business processes. Lauderdale (n.d.) states, “MIS allows managers to create reports about the company activities”. A company or organization can never be successful without implementation of a management information system because MIS keeps proper record of all information that is needed to run the business activities effectively. Dhillon (2010), in an article, found that the main task of a management information system is to ensure delivery of correct information to the intended receivers of the information. Management information system differs from information system in a sense that information system is only concerned with the collection of data but management information system not only collects and organizes the required data but also assists the management of the organization in effectively carrying out various activities related to decision-making processes. If we talk about the key tasks of a MIS, we can say that a MIS is capable of performing various tasks related to the management of information. Some of those tasks include documentation of the collected information, storing the information in appropriate locations, keeping track of the information, and assisting the concerned departments in processing of information. Lucey (2005, p. 4) found that the main purposes of a management information system are to process the data into information and to communicate the processed information to the concerned people. LaRose (n.d.) asserts, “Management information systems are used to manage the data created within the structure of a particular business”. Management information system not only stores data in the form of information, rather it also helps management staff in processing, analyzing, and disseminating collected information or data for carrying out various business operations of the organization. The data is presented to the concerned department in the form of a well-documented report consisting of those activities that are needed to be executed by the management of any specific department. MIS helps an organization in setting and achieving long-term strategic goals and objectives. MIS is also used in financial organizations in order to keep a complete and accurate record of various financial activities. One of the most important aspects of management information system is that it keeps the information up to date, which is essential for the success of any organization. Therefore, we can say that business information system is a very important process that every company or organization should implement. 3.1 Working of an Information System There are some tools required for the implementation of a management information system. Computer is the main component of any information system. All information about the companies is stored in the computers. In case of trading companies, information about the customers’ orders such as customer name, product name, product specification, order delivery time, and payment information is stored in the computers for further processing. While talking about MIS, let us get some information about website, which is also one of the integral parts of any trading company’s management information system. “One of the easiest ways to help your business gain more exposure and potential customers is to have a professionally developed website” (Holub 2005). Website is an effective platform for communication between the companies and their customers. Amazon Company runs its business online. In today’s world, almost every business needs to have an online presence to attract customers. Website is the most popular platform for internet marketing. Our company, Amazon also makes use of a website for marketing purposes. The request, which is made by the customers regarding any product, is stored in the computer of the company along with details of the order. When a customer’s request is stored in the company’s database, the concerned department makes use of the order related information it in order to deliver the requested product to the customer. Therefore, we can say that a website is not only an essential part of a trading company but also it is a key component of the information system of the company. Operating a management information system is not an easy task to be performed because it has to deal with all business operations, processes and people of any specific organization. It requires an efficient and highly qualified team of professionals to carry out the tasks related to management information system. The tasks related to management information system include maintenance of existing systems, analyzing the effectiveness and efficiency of existing systems, taking steps to eradicate bugs from the existing systems, and implementing new systems and technologies when required. Management information system is always considered one of the most important systems of any organization because it not only helps the management in taking appropriate decisions through analyzing the information provided by the management information system but also in expanding the business in other markets. 3.2 What Factors drive the Use of IS in Amazon Company? Having discussed management information system (MIS) in detail, let us now describe those factors, which have forced Amazon to implement a management information system. Amazon Company has implemented an efficient information system in order to keep up to date record of information. The MIS helps the company in many areas, such as, storage of customer related information, processing of customers’ requests, and keeping payment details. Let us discuss some of the factors in detail in order to know the impact of those factors on the success of Amazon Company. 3.2.1 Need of Information Management Need of information management mechanism is the first factor which has driven Amazon Company to implement an information system in the company. Almost every company, which has some sort of online presence, needs to manage the customers’ details and other information in the database in order to carry out the business processes effectively. Amazon Company would have been a failure without the implementation of the management information system because it is a customer-oriented company, which needs to be efficient in managing the customer related information accurately. Therefore, need of information management was the primary force behind implementation of the information system in the Amazon Company. 3.2.2 Details of Customers’ Orders Another factor, which played a major role in the implementation of information system in Amazon Company, was management of the details of the customers’ orders. Amazon Company runs its business through its website where customers place their orders and the company provides the customers with their desired products. This is the reason why it was important for the company to keep track of the customers’ details in an efficient way. The management information system keeps detailed information about the orders, which include, order number, customer number, customer name, order specification, delivery date of the order, and payment details. 3.2.3 Need of Information Retrieval on Demand Information retrieval on demand is also an important factor behind the implementation of information system in an organization. In case of Amazon Company, information needs to be retrieved consistently for processing. Therefore, it was important for the company to implement an effective management information system (MIS) in order to facilitate the company’s employees in carrying out the business activities in an appropriate manner. The MIS of the company not only helps managers store customers’ requests in the system properly but also helps them retrieve the information when needed. In an online company, information retrieval should be very accurate and speedy because there is a number of orders present in the queue. Therefore, managers need to process information in a very short time while ensuring information reliability. 3.2.4 Need to Ensure System Consistency Another important factor, which made the company implement information system, was need of system consistency. It is important for a management information system to show consistency in collecting the data from reliable sources and processing the collected data in required locations. The users of information system do not find any difficulty in using the information if the data is processed consistently. Data consistency is extremely important for the implementation of an effective information system. A company needs to apply those procedures and techniques regarding data management that should be able to bring necessary changes to the business processes. Therefore, it was important for Amazon to implement information system in the company because of need to bring consistency in information management. 3.3 What are those Benefits that MIS provides to the Amazon Company? As mentioned earlier in the report, success of a company without the implementation of a management information system is impossible in the today’s world. It is because there is a lot of competition between companies these days and only those companies can get competitive advantage which keep up to date information about different issues related to the internal and external environments of the businesses. MIS provides the companies with various benefits related to the information management. Amazon Company also makes use of an efficient management information system that has driven the company to the heights of success in a short span of time. Some of the core benefits for the Amazon Company due to the implementation of the management information system include accuracy, completeness, timeliness, and relevance. Let us discuss those benefits in some detail. 3.3.1 Accuracy Accuracy is a key benefit of the implementation of a management information system in a company. If we talk about Amazon, we can say that the information technology department of the company has enabled the managers keep precise and accurate information related to all aspects of the company’s business. All departments of the company make use of reports, which are generated by the information system. Management information system has also provided the company with accuracy of internal controls, which is extremely important for the proper functioning of an online company. 3.3.2 Timeliness Quick data processing is also one of the benefits provided to the Amazon Company. Timeliness is integral for an efficient information system because it results in improving performance of a company. It is due to the implementation of information system mechanism that the information is always ready to be retrieved by different departments of the company. The data collection and processing time has become very less which has resulted in saving time of the company’s employees and customers. 3.3.3 Completeness and Relevance Completeness and relevance are also two of the key benefits of implementation of information system in the Amazon Company. Only that information should be provided to the users, which is needed to carry out some specific business operation. Irrelevant or unrelated information is of no use and it leads to time wastage and ineffective decision-making. An efficient management information system is only that which provides complete but relevant and desired information to the users. With the implementation of the management information system in Amazon, the users are now provided with complete but the most relevant information related to any specific matter. Information is presented to the concerned users in the form of reports. The information system of the Amazon Company provides only relevant information to the concerned departments because irrelevant information leads towards the wastage of time of the users. So, these were some of the benefits provided to the Amazon Company due to the implementation of an efficient information system. 3.3.4 Consistency Data consistency is another key benefit provided to the Amazon Company. The management information system of Amazon always stores and processes collected data in a consistent manner. I have personally contacted one of the officials of the company to get some information about consistency and reliability of the working of the management information system. The official told me that the system has never provided the employees with incorrect data. It is due to this quality of the information system that the employees working for the company have never faced any kind of problem in managing customer related data. Provision of accurate data is the core aspect of an effective management information system. If the data will not be processed and compiled in a consistent manner, it will be very difficult for the users of MIS to effectively run the business operations of any organization. 3. 4 Applications of Management Information System 3.4.1 Assists in Developing Strategies Management information system helps Amazon in the development of business strategies. Although computers do not make strategies without human intervention but they assist the management of the company in developing strategies. Management information system involves the use of computer for the collection of data, processing of data, and generation of reports for decision-making purposes. Therefore, we can say that MIS provides great assistance to the employees and the managers by providing them with accurate and complete information for developing strategies regarding any specific matter. 3.4.2 Data Processing Data processing is also one of the greatest uses of management information system. Gone are the days when organizations used to organize the data in the shape of files and then process it manually for decision-making and record keeping purposes. Now management information systems are used for decision-making purposes because they perform all the tasks related to information management which include collection of data, editing of data, saving it in the computers, and generating reports for decision making purposes. Dawn (2009) asserts, “Management information systems are used by organizations to track, store, manipulate and distribute information to the appropriate people”. Automated data processing not only helps managers of Amazon Company in making quick decisions but also saves their time by automatically carrying out the data processing activities. 3.5 Limitations of Information System Some of the limitations regarding implementation of information system in the Amazon Company include cost of employee training and expense of the information system implementation. Managers of the company need to improve in these areas in order to make management information system successful for the company. Managers need to provide effective training to the employees in order to overcome the difficulties that they face while using the system. Although MIS is working well for the company already but training can make employees more skilled in the use of the newly implemented system. If we talk about cost of implementing the use of management information system in the company, we can say that the costs or expenses are not long-term. The company is facing the expenses because currently different functions and entity relationship features are being added by the software developers. Once all functions are added in the system, the operational and maintenance costs will definitely decrease for the company. 4. Conclusion Summing it up, information system is one of the integral parts of any online company as it keeps proper record of all information that is needed to run the business activities effectively. Amazon is one of those companies, which have implemented an efficient information system for the proper management of all information related to customers and their orders. The implementation of the management information system has played an effective role in making the company reach heights of success in a very short span of time. Therefore, we can say that management information system is a key towards success of a company in the 21st century. References Abel, O 2008, Knowledge Workers in the Information Age, viewed 08 December, 2011, . Dawn, S 2009, What is the Advantage of a Management Information System?, viewed 08 December, 2011, . Dhillon, T 2010, Data Management for Your Success, viewed 08 December, 2011, . Farmer, J 2008. Amazon, the Tech Company, viewed 08 December, 2011, . Holub, S 2005, Why Your Business Needs a Website, viewed 08 December, 2011, . LaRose, M n.d., An Introduction to Management Information Systems, viewed 08 December, 2011, . Lauderdale, C n.d., What are the Benefits of a management Information System?, viewed 08 December, 2011, . Lucey, T 2005, Management Information Systems, 9th edn, Thomson Learning, London. Martin, S 2010, An Introduction to Management Information Systems, viewed 08 December, 2011, . Oz, E 2009, Management Information Systems, 6th edn, Cengage Learning, Massachusetts. Schneider, L 2010, Information Technology – Definition and History, viewed 08 December, 2011, . Stahl, B 2008, Information Systems: Critical Perspectives, 6th edn, Routledge, Oxon. Read More