Impact of Knowledge Management on Amazons Use of Information Systems to Improve Their Efficiency - Coursework Example

Impact of Knowledge Management on Amazon’s use of information systems and technologies to improve their efficiency and achieve success Introduction To remain competitive, an organization needs data, information and knowledge. Although these three are closely inter-related, yet they are quite different from one another. While data is raw facts and figures, it transforms into information when data is specific in nature, organized and meaningful. Besides that, knowledge is meaningfully accumulated information combined with experience. Knowledge is a broader concept and proves to be more valuable. In order to illustrate, Theirauf (2001) defines the three components as follows: data is the lowest point, an unstructured collection of facts and figures; information is the next level and is regarded as structured data; finally, knowledge is defined as "information about information". Experts believe that wealth of knowledge that an organization accumulates over years - business ideas, management concepts, internal processes, functional expertise, client and prospect information, and industry trends - is often left underutilized. The creation of knowledge management provides a channel to make appropriate use of the existing knowledge (Theirauf, 2001). The following sections will involve an in-depth study about knowledge management along with its impact on information systems and technologies. Thereafter, implication of information system and technologies at Amazon.com will be explained. Following that, knowledge management employed in Amazon.com will be evaluated. Knowledge Management Knowledge management is an approach of acquiring, assembling, upgrading and sharing knowledge base of an organization. Bounfour (2003) defines knowledge management as a set of procedures, infrastructures and technical and managerial tools that is designed to create, share and leverage information and knowledge within and around organizations. Existence of knowledge management has a long history, which include several practices such as, apprenticeship, corporate libraries and professional training programs. Increase in use of computers and changes in technologies have led to creation of online knowledge repositories, databases, expert systems, decision support systems, intranet and more of the same. According to Wright (2005), knowledge management was first introduced as personal knowledge management in 1999. In the contemporary business world, implications of Knowledge Management are uncountable. From marketing to information technology, every field is enjoying the benefits of knowledge management. Knowledge management plays a crucial role in an organization as it helps in improving performance through continuous flow of upgraded information and shared experience while adding a competitive advantage (Bounfour, 2003). Impact of knowledge management on information systems and technologies Knowledge management (KM) is an integrated approach of people, process and technology involved in gathering, developing, allocating and updating information structure of an organization. It is a human oriented approach that tries to demonstrate ways in which information system functions in a large organizational setup with overlapping relationships among people, process and technology (Sher and Lee, 2004). In the knowledge management initiative, people are the one who retrieve, organize, share and apply available knowledge. Processes based on KM framework uses knowledge to create value for the organization, whereas knowledge based technologies are flexible, up-to-date and more productive. Hence, KM is not only concerns availability of knowledge, but also utilizes it for the purpose of profit making. This is why demand for KM-based software has been on the rise in recent years (Sher and Lee, 2004). Knowledge management system (KMS) comprises a part of knowledge management initiatives. It is referred to as an information technology based system for organizing, upgrading, managing and disseminating information (Tiwana, 2000). In short, knowledge management when merged with information system forms knowledge management systems. KMS enables employees to access readily available information online from organization’s database, as and when required. This empowers employees to share their past or present knowledge and skills that act as value addition to the company. KMS creates an integrated solution that leads to operational excellence, efficiency and effectiveness in organizational functioning. In the recent times, the market has been flooded with several KMS-base tools like, Customer relationship management, business process management, data management and so on and so forth (Petrides, 2004). Amazon.com The recent acceptance of virtualization in the business world has increased reliability of information technology. Founded in 1994, Amazon.com is the largest online retailer in the world. It is an e-commerce company based in America that started off as an online bookstore and eventually, diversified into retailing in different sectors. Currently, amazon.com has separate retail websites for nearly all countries worldwide. It is one of the first few companies to start online retailing business. It is a major provider of cloud computing services (Amazon, 2014). Amazon.com and information technology services Cloud computing has become one of the most discussed IT paradigms in recent years. The cloud has been defined in the area of cloud computing as computation, software, data access, and storage services that do not require end-user knowledge of physical location and configuration of the system delivering the services. Clouds are widely applied in many areas of IT infrastructure solutions. Cloud computing covers major changes and advances occurring in IT industry and offers significant opportunities to organizations by reducing cost and consumption of time (Hayes, 2008). Cloud computing enables organizations to obtain a flexible, secure and cost effective IT infrastructure as well as liberates the organization from employing manpower and budget for activities that has no direct contribution. These IT capabilities comprise databases, storage, messaging and other building block services that run various business applications (Hayes, 2008). Cloud computing delivers an enterprise-grade IT infrastructure in a reliable and cost-effective manner. To understand the impact of cloud computing on amazon.com, it is important to study the significance of business outsourcing. As cloud computing to a certain extent resembles trends of business outsourcing by providing benefits of leveraging the expertise and being cost efficient (Hayes, 2008). Amazon has a long history of using a decentralized IT infrastructure. This has enabled development team of the enterprise to access, compute and store resources on demand and has increased overall productivity and agility. Amazon has spent millions of dollars over a decade to build and maintain the large-scale IT infrastructure, which powered one of world’s largest online retail platforms. Amazon Web Services (AWS) were launched by Amazon so that other organizations could benefit from Amazon’s experience and invest in running the large-scale IT infrastructure. AWS has been operating since 2006 and presently, it serves thousands of customers worldwide. Amazon.com runs a global web platform serving millions of customers and managing billions of dollars’ worth of commerce every year. These are a few examples of ways in which organizations, ranging from large enterprises to research firms, use AWS: 1. A large enterprise can conveniently and economically deploy new applications, such as, HR solutions, payroll applications and inventory management, to its distributed workforce. 2. An e-commerce website can easily meet sudden demand of a specific product without upgrading its infrastructure. 3. Media companies offer unlimited video, images and music to their worldwide customer base using cloud computing (T. Velte, A. Velte and Elsenpeter, 2009). Amazon Web Services is readily distinguished from other vendors in the traditional IT industry because of certain reasons: 1. Flexible: Flexibility is the first key difference between AWS and other IT models. The reasons being traditional IT models require large investments in order to deliver new programming languages, architectures and operating systems. Therefore, when opportunity to innovate arises, it proves difficult to switch suddenly. Another major factor is the fact that adopting a new technology is often quite time-consuming, whereas AWS allows organizations to adhere to programming models, languages, and operating systems that they are familiar with or to choose alternatives that are better suited for his/her project. In addition, this flexibility helps organizations mix and match architectures in order to serve diverse business needs (Leavitt, 2009). 2. Cost-effective: One of the most complex elements of delivering contemporary IT services is cost. For example, development and deployment of an e-commerce application can be a low-cost affair, but with successful deployment, need for hardware and bandwidth rises and so does the cost. In contrast, cloud computing provides an on-demand IT infrastructure that consumes only the amount of resources that is needed. As a result, AWS requires no up-front investment, long-term commitment or minimum spend (Leavitt, 2009). 3. Elastic: In traditional IT organization, scalability and elasticity are often equated with infrastructure and investment. On the contrary, at AWS, cloud scalability and elasticity provide opportunity for saving and improved ROI (return on investment). Unlike traditional IT organizations, AWS scales computing resources up and down easily with minimal friction (Leavitt, 2009). 4. Secure: AWS delivers a cloud-computing platform that provides customers with end-to-end security and end-to-end privacy. This builds security into its services in accordance with best security practices and documents ways to use security features. Ensuring confidentiality and integrity of client’s data is of utmost importance to AWS. 4.1. Physical security: Amazon has many years of experience in designing, constructing and operating large-scale database. The knowledge of such database is limited to only those within Amazon, who have a legitimate business reason to access this information. Thus, these database and data centres are physically secured from unauthorized access. 4.2. Secure services: In AWS cloud, each service is designed to be protected. They contain a number of capabilities that restrict unauthorized access or usage. 4.3. Data privacy: In the AWS cloud, it is possible for clients to encrypt personal and business data as well as publish back-up. There are also measures to avoid redundant procedures (Leavitt, 2009). 5. Experience: AWS cloud ensures level of scale, security, reliability and privacy that are often cost prohibitive for any organization. AWS has built an infrastructure with the help of experience gathered over more than a decade; this has helped to earn trust and confidence of clients. AWS has been operating since 2006 and presently serves numerous customers worldwide (Leavitt, 2009). Knowledge management employed in Amazon.com Knowledge management is fundamentally about making the right knowledge available to the right people at the right time. Knowledge sharing is, therefore, perhaps the single most important aspect in this process, given that majority of KM initiatives depend upon the same. At Amazon, unique integration of virtual environment systems (cloud) with traditional knowledge management system has prove to create a rich and engaging platform for conducting virtual team building activities that support team member interaction, reflection and collaboration. The blend of knowledge management and cloud computing technology gives a competitive edge to the organization. Cloud computing has enhanced efficiency of knowledge management system. With emergence of technological paradigms such as, cloud computing and service oriented architecture, it is presently quite convenient to acquire, share and use knowledge from different remote databases, thereby facilitating advancement in knowledge management area (Khoshnevis and Rabeifar, 2012). Current knowledge management systems aim at centralizing knowledge assets and information solutions. According to Delic and Riley (2009), Enterprise Knowledge Cloud (EKC) is a "collaborative, cooperative, competing mega-structure, providing computing, networking and storage services to various knowledge producers and consumers being devices, people and applications". Knowledge management plays a crucial role in enterprise intelligence including market intelligence, business intelligence, competitive intelligence and strategic intelligence. Hence, knowledge management is very effective in these areas, especially in a cloud environment. Conclusion To summarize, knowledge management is an integrated approach to acquire, develop, upgrade and share the available knowledge so that operational efficiency is achieved. Even though the concept of knowledge management is being used for a long time, it is only in recent years that KM has obtained a lot of recognition. Cloud computing as a trend is an inspiration for traditional KMS organizations. The impact of knowledge management on Amazon’s information and technology services has been profound as integration of KMS and cloud computing has led to creation of such a web platform, where knowledge can be accessed from any remote location without making fresh investment in any sort of infrastructure. In addition, knowledge base available at AWS cloud is secure and authentic in nature as Amazon Web Service is well-known for its excellent service. Cloud computing has presented Amazon with opportunity to be the largest ecommerce retailer with a large-scale, integrated and cost efficient web platform. Knowledge management system is very helpful in upgrading capabilities and vastness of knowledge utilizing opportunities offered by cloud computing paradigm, making it compliant with newest advances in technology. Reference list Amazon, 2014. About Amazon. [online] Available at: [accessed 23 April 2014] Bounfour, A., 2013. Management of Intangibles. London: Routledge. Delic, K. A., and Riley, J. A., 2009. Enterprise Knowledge Clouds: Next Generation KM Systems? [pdf] IEEE. Available at: [Accessed 23 April 2014] Hayes, B., 2008. Cloud computing. Communications of the ACM, 51(7), pp. 1-3. Khoshnevis, S. and Rabeifar, F. 2012. Toward Knowledge Management as a Service in Cloud-Based Environments. International Journal of Mechatronics, Electrical and Computer Technology, 2(4), pp. 88-110 Leavitt, N., 2009. Is cloud computing really ready for prime time. Growth, 27(5), pp.15-20. Petrides, L. A., 2004. Knowledge Management, Information Systems, and Organizations. Research Bulletin, 2004(20), pp. 1-12. Sher, P. J. and Lee, V. C., 2004. Information technology as a facilitator for enhancing dynamic capabilities through knowledge management. Information & management, 41(8), pp.933-945. Theirauf, R. J., 2001. Effective business intelligence systems. Connecticut: Greenwood Publishing Group. Tiwana, A., 2000. The knowledge management toolkit: practical techniques for building a knowledge management system. New Jersey: Prentice Hall PTR. Velte, T., Velte, A. and Elsenpeter, R. 2009. Cloud computing, a practical approach. New York: McGraw-Hill, Inc. Wright, K., 2005. Personal knowledge management: supporting individual knowledge worker performance. Knowledge Management Research & Practice, 3(3), pp. 156-165. Read More