How Does Amazon Use Information Systems and Information Technologies to Improve Efficiency - Coursework Example

How does Amazon use information systems and information technologies to improve efficiency and achieve success? Introduction Information technology has brought a revolution in the business world today. It is noteworthy to say that information technology has brought tremendous improvement in the operation of businesses. The use of this technology makes the world economy interdependent. The competition in businesses is now global. Amazon.com is a leading online retailing business. Amazon’s success is largely attributable to the organization’s use of information systems and technologies. This study aims at determining how Amazon.com uses management information systems and technologies to achieve success and improve efficiency. In addition, it will consider the impact of using management information systems and technologies on knowledge management. Improving efficiency to achieve success E-commerce has grown in the recent past. Businesses are shifting to the traditional trade that limits itself within the geographical and physical boundaries of the region. The competition for consumers has become immense. Innovation and technological advancement have brought about a boost in production of goods and services thus the saturation of the market (Gottschalk, 2007). In this business environment, the use of information technologies on business is crucial for survival. Amazon is a business established to trade books online. The founders’ fascination with the internet inspired them to start an online bookstore. The success of this idea led to the widening of the commodities and services through the internet. Embracing the technology saw this business grow to operate internationally. The organization has developed e-business models that help in selling of goods and collaboration with other likeminded businesses (Tait & Richardson, 2010). Management information system is the gathering of information, storing, processing, and using that information in making of sound decisions. Amazon.com, a multinational e-commerce company is an online market leader in the United States. The organization has an ability to utilize management information system (Montano, 2004). The companies’ internet sales are almost three times higher than those of its closest competitor. The margin results from Amazon being able to utilize information management systems. The management of this organization does an analysis of this data and makes business decisions that lead to organization growth and expansion. Further, the organization can have a comprehensive profile about their consumers. The collection of information is critical in the development of consumer goods. It also helps the organization to anticipate the needs of their consumers. This makes the provision of services to the consumer efficient (Gottschalk, 2007). Amazon manages to be competitive by having a strategy of utilizing information to its advantage. The consumer and market information is usable in the control of logistics. The organization employs a variety of strategies, which include personalization technologies, market differentiation, and system enterprise and focus strategies. These strategies are usable in different situation; the management is put to task in making decisions regarding what mode to use where. To be efficient in the managing the large number of consumers and consumer product, Amazon has two major information systems. The two systems are Amazon Web Services and Simple Storage Service. The two systems form the e-platform where Amazon rents out space. Other interested parties can make use of Amazons web to market their goods. These systems are reliable, low cost and assist in data collection. These web services provide Amazon.com with the necessary information for making e-business design. Amazon.com as an organization is aware that managing vast amounts of consumer and consumer products can be a challenge. To overcome this challenge, it has an information system namely; Service Oriented Architecture. This system enables the organization software’s components to be fast, independent and efficient (Tait & Richardson, 2010). It also enhances the capacity of Amazon’s information systems making them mega scalable. The system reinforces the online site making the consumers find what they need without hitches. Further, it utilizes information in multiple areas depending on the requirement. Amazon uses consumer-relationship management systems to increase its efficacy. It has various call centres located in different regions. These call centres act as part of the organization’s support system to build relationships with the consumer and attend to complaints. The use of information systems enables Amazon to have a transaction processing system that creates user’s conveniences. The system has what is called One Click. This refers to a system where consumer fills in their detail only on their first visit to Amazon. The system stores this information securely. Subsequently, the consumer proceeds to make dispatch without entering their details. The payment system for commodities in Amazon is simple. The consumer gives their debit card for confirmation; however, the actual payment of goods is done after the consumer receives the goods. This system if called the honour system. Amazon management information system enables an organization to offer personalized attention to its consumers irrespective of their numbers (Roger et al, 1998). It is through using information system that the organization remains the market leader on internet sales. Amazon has a management information system designed to make the consumers shopping easy. This is the Recommenders system. The system looks at a consumers’ past browsing, shopping behaviour, and correlates this information with that of other consumers. It analyses this information and links it to available products. Given that consumers have a personal account, the system can display suggestions that might appeal to the consumer. The shoppers get a wide pool of items to select. Additionally, it increases the sale of the organization. The use of information system by Amazon enables the organization to offer its services twenty-four hour a day. Thus, a shopper can log into the organizations web at any time of the day and order for what they require. Moreover, one can access the organization’s web from anywhere. Consumers, therefore, enjoy the privilege of shopping from the comfort wherever they desire. The use of management information system by Amazon makes the organizations go beyond the confines of physical boundaries and serve consumers globally (Harman & Brelade, 2000). The use of management information system makes the company increase its sales. This is because there are better communication at all levels. The sellers efficiently communicate with the suppliers and the consumers. The consumers can access online catalogues and make orders from where they are. Information systems are accurate at delivery of information. Thus, the organization collects and delivers information with ease. Having management information system in itself does not guarantee success in an organization. The handling and use of the information are critical. Amazon achievement of success is due to knowledge management of the organization. Information design is for use at all levels (Roger et al, 1998). The management at Amazon encourages the development of information system, giving of a direction on the utilization of information. Information system covers all functional area of the business. This is necessary as it helps to create harmony in the business. In management information system, it is important to secure information. Amazon has been able to achieve success through protection of their information. The organization has a system that checks for fraudster. To tighten its security data processing and checking is done as it occurs. The organization safeguards its data against corruption. The system development is through a stringent standardization that complies with the goals of the organization. Knowledge management Amazon has information management system that helps in getting of raw data that concerns consumer and consumer product that it deals with. The success of the company in using of this information is through knowledge management tool (Harman & Brelade, 2000). It is through refining of information that Amazon has been able to stimulate positive action in the organization. The objective of every business organization is to optimize on profits. The application of knowledge management by Amazon in its operation will lead to an improvement in efficiency. The use of knowledge management will help Amazon create an edge in the market through provision of superior quality products. The information they have in store can be usable in coming up with simpler methods of production. The organization reduces the overhead costs that an organization incurs in production. The access to information enables the company to be at par with the current production models, thus, avoid reinventing of the wheel. Amazon will be able to information on the demand of customer in the developing of product and services. The use of knowledge management system aids in improving design and precision of products and services (Becerra-Fernandez & Leidner, 2008). Further, the organization will be able to identify realistic targets to achieve. These generate room for growth and expansion of the organization. It, therefore, becomes possible for an organization to operate within global scales. Increase in demand of products from the company because of their endearing to the consumer will generate more revenues. Additionally, the organization will raise it production levels. The organization benefits from mass production meaning that the organization will enjoy economies of scale (Mao et al, 2012). As Amazon enjoys economies of scale, the cost of production will be low. The reduction in the cost of production gives the organization a competitive advantage. This is because its products will be able to reach the consumer at relatively low prices. Efficiency in knowledge management by Amazon can see the organization reach the heights of innovation and have up-to-the-minute ways of operating and doing business. New products are developed. Increasingly, the organization will be able to keep up with the ever changing trends of the business world. The competences of people within the organization improve hence increasing the efficiency of an organization. The human capacity of the organization will be able to respond to the market demands with ease. The uses of information management systems enable Amazon have sufficient information to guide the making of business alliances. Embodying knowledge management will ease the linking of people and resources in a virtual company (Blecker et al, 2005). The organization benefits as it shares risks with the partners in the alliances. Therefore, there is an increase in the market coverage of the company. The organization maintains its financial management at the central office; however, other functions such as production and marketing are decentralized. The knowledge that the organization has forms part of it intangible assets. Effective utilization of this information can help increase consumer value, reduce product development cost, and enhance consumer value. In these respect organizations’ success has to rely on knowledge management tools (Becerra-Fernandez & Leidner, 2008). The competition in the modern business is stiff, thus, Amazon as an organization has to put its information to the best of use. The company has to engage in selling of products as well as solutions. Using of knowledge management systems catalyses achievements within an organization. Amazon holds a vast amount of data, this data using knowledge management system can be usable enhancing competitive advantage. Amazon using knowledge management can effectively create market differentiation for their product and services. The information the organization has will efficiently help in the creation of a niche market and ensuring its sustenance. The business environment is constantly changing. In this respect, the survival of any business depends on its ability to adapt. The use of knowledge management by Amazon is paramount to its coping with the swift changes of the universal market. The organization can work with a lean number of employees. This reduces the organization’s operation cost and the company can employ bottom-line strategies (Blecker et al, 2005). Amazon operates internationally, It, therefore, has to comply with international laws. The use of knowledge management system helps the organization to prepare on cultural changes. Further, the organization remains abreast on the different business regulations in different regions. This impact positively on Amazons’ business practices. To remain as a market leader, the organization has to improve on it information technologies and the use of knowledge management (Becerra-Fernandez & Leidner, 2008). Conclusion Amazon faces tough completion from other organizations. To be able to survive, the company has a system that reliably handles millions of information. The organization also requires building the capacity of their staff about to handling of knowledge and information. Enormous information is crucial for the different functions within the organization. Additionally, long-term plans on information management system are fundamental to the organization. Amazon will continue to improve its efficiency and enjoy success by embedding of knowledge management in its operation. This is because the business landscape is shifting to a knowledge economy. The knowledge economy is sustainable as it allows organizations to sense the market changes as they occur and apply knowledge in response to changes. Amazon stands to benefit and leave their competitor behind if the use knowledge management. Bibliography Becerra-Fernandez, I., & Leidner, D. E. 2008, Knowledge management an evolutionary view, Armonk, N.Y., M.E. Sharpe, Inc. . 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