MIS Amazon is a strategy that the company uses for competitive advantage. This analysis studies Amazon information systems, the technology used to maintain them, and their benefits.
Globalization can be credited for causing significant alterations in the way business is conducted and the increasingly competitive and constantly changing business environment. In many large corporations, it is not easy to detect strategic issues that confront business operations. It is also difficult to develop sustainable programs that steer organizational success. However, the advent of computers and information technology makes it easy to prepare strategic plans that facilitate the growth and success of companies. An ‘MIS’ is a strategic system that aids in collecting, analyzing, disseminating, and storing organizational data in the mode of information required to implement management functions (McLeod & Schell, 2007).
Amazon.com has persisted in its innovation, especially in business strategy and information systems. In this research paper, I address how the company connects these two aspects of business and the huge investments it makes in information systems and data security. I conducted the research by consulting some peer-reviewed sources as well as interviewing two employees of Amazon.com (Schappell & Wilke).
Management Information Systems (MIS) are concerned with “planning for, development, management, and use of information technology tools to help people perform all tasks related to information processing and management” (Haag & Cummings, 2008, p. 29). MIS aids in planning by offering the necessary information that assists in firm decision-making, especially in large organizations where the managers cannot exert direct control over all operations. It also reduces data overload by changing the bulk of data in a condensed form. In doing this, MIS eliminates the confusion often associated with excessively detailed facts. MIS also encourages decentralization and coordination by providing a platform for monitoring work at the lower levels.
Case Analysis
An example of a company that utilizes MIS to steer growth and management is Amazon.com, a major e-commerce company based in Seattle. In 1995, Jeff Bezos, an investment banker by profession, saw an opportunity in the unexploited internet sphere. He established a site that sold directly to customers over the Internet. The company achieved a significant milestone by becoming one of the very first large-scale retail enterprises to make sales over the Internet. According to one of its employees, Jeff Wilke, the company made over $4 billion from its online revenues (Personal communication, January 10, 2014). Over the years, Amazon.com has metamorphosed into one of the most influential internet retailers by using MIS.
Amazon.com’s Exploitation of IT in Decision Making
With computers permeating all areas of human life, rarely any company or business franchise does not extensively depend on IT systems. However, there are certain fields that rely to a large extent on MIS. The kind of e-commerce carried out at Amazon.com is one such field. Information management is vital for effectively delivering several managerial operations at different organizational levels (O’Brien, 2009). Management processes that are facilitated by the application of information technology at Amazon.com include controlling, planning, and decision-making.
MIS aids in the decision-making process at Amazon.com by providing the required information in an updated and accurate form needed in an up-to-date and accurate system. The benefits of IT in decision-making, therefore, include the usability of the information provided and the timeliness of information delivery. It also includes the delivery of information to those who need it.
According to Schappell, Amazon.com offers its top-notch e-commerce programs to other dealers and private retailers (Personal communication, January 15, 2014). As a matter of fact, many established retail companies and private dealers boost their sales by leveraging the stage provided by Amazon.com’s e-commerce. By manipulating programs such as Marketplace and Advantage, Amazon.com has managed to stay on top of the online retail business and offer its customers a wide selection of items on the e-commerce platform.
Amazon.com manipulates MIS systems to convert data into information that aids decision-making. The company successfully implements an integrated system through the web by properly operating the information system and upholding its technical and application system. From the interview with Dave Schappell, one of Amazon.com’s employees, it is evident that IT is the core of business at Amazon.com (Personal communication, January 15, 2014). Proper manipulation of information technology results in increased profits (McLeod & Schell, 2007). The recent trend of profitability indicates that the management at Amazon.com has stayed on top regarding its leverage of information technology.
At Amazon.com, MIS systems are valuable as they use the raw data to administer simulations. These simulations help predict possibilities and ‘what if’ scenarios. One such use of MIS at Amazon.com is in projecting the impact of price change on merchandise sales. The Decision Support Systems (DSS) implemented at Amazon.com facilitate decision-making and cannot be achieved without MIS systems.
Amazon.com uses MIS systems to organize massive volumes of data into coherent reports. These organized data are easily understood by managers and make strategic planning easy. By examining the reports and statements, managers identify information patterns and financial patterns that can aid in strategic planning for growth (Gefen & Straub, 2000). Like most companies, Amazon.com faces its fair share of challenges in satisfying its customers’ needs and distribution channels. The company addresses these challenges using high-tech software that allows it to homogenize procedures on its back-end systems while still delivering quality and personalized services to its customers.
Customers gain access to the company’s systems using their client of choice, such as a mobile device, a web browser, or a procurement system. This level of interaction is referred to as the presentation layer. On the next layer (application layer), Amazon.com’s commerce logic is controlled by a company resource planning system. The demanding data collection and management that takes place during the procurement process is governed by a tier of databases called the data layer. Data at Amazon.com is retrieved and analyzed without the hustle of lengthy manipulation and processing. All three tiers and systems are reinforced by several technological applications that ensure the effectiveness of the systems and teamwork on the part of employees.
MIS For Data Analysis and Strategic Direction at Amazon.com
Amazon.com uses MIS systems to organize massive volumes of data into coherent reports. These organized data are easily understood by managers and make strategic planning easy. Managers identify information patterns and financial patterns that can aid in strategic planning for growth by examining the reports and statements (Gefen & Straub, 2000). Like most companies, Amazon.com faces its fair share of challenges in satisfying the needs of its customers, and its distribution channels. The company addresses these challenges using high-tech software that allow the company to homogenize procedures on its back-end systems while still delivering quality and personalized services to its customers.
Customers gain access to the company’s systems using their client of choice, such as a mobile device, a web browser, or a procurement system. This level of interaction is referred to as the presentation layer. On the next layer (application layer), Amazon.com’s commerce logic is controlled by a company resource planning system. The demanding data collection and management that takes place during the procurement process is governed by a tier of databases called the data layer. Data at Amazon.com is retrieved and analyzed without the hustle of lengthy manipulation and processing. All the three tiers and systems are reinforced by several technological applications that ensure effectiveness of the systems and teamwork on the part of employees.
Technology Used at Amazon.com
The company design at Amazon.com is done in such a way that the growth of the business is driven by technological innovation. The technology used allows the company to offer a variety of products at relatively low prices. One of Amazon.com’s notable technological innovations includes Search Inside the Book, which allows clients to have a personalized experience while shopping for books. Another innovation is 1-Click Shopping, which allows customers to purchase online goods using one mouse click based on the information generated from the customers’ previous entries. The customers are saved from buying items using the shopping cart. Other innovations provided by Amazon.com include Wish List and Listmania, which help customers to identify new items and make advised choices.
One advantage that Amazon.com has in the e-commerce market is its ability to manage its information systems efficiently. According to Wilke, Amazon.com develops its information systems to solve management challenges that arise during business (Personal communication, January 10, 2014). The company has built its core framework founded on a Service Oriented Architecture (SOA). This system supports sustained growth while not compromising performance. The SOA enables the company to construct several software components. It is a complete, systematically distributed, devolved service program that operates several applications (Bhattacherjee, 2001).
How Amazon.com Responds to Competition
Competition brings out the best in any business franchise. Amazon.com faces strong competition in its online market from other e-commerce companies such as eBay and Yahoo! who have honed their use of information systems and are constantly churning out new products and services. Another company that poses the greatest competition to Amazon.com is Google. The threat from Google is mainly because many online consumers manipulate its search engine. Google has also expanded to other e-commerce services.
Every strong company must possess at least one core competency. This competency is the service that the company excels at offering. By constructing a robust management information system, Amazon.com can obtain an edge over its competitors. MIS systems can offer Amazon.com the tools to understand the e-commerce market better than its competitors.
To stay ahead of the competition, Amazon.com offers new products such as digital mapping, online short stories, and other services to improve the client experience. In addition, the company constantly enhances the design, content, and usability of its website. It endeavors to establish a digital relationship with all its customers, employees, and suppliers. It is important to note that the changes made at Amazon.com to improve sales and marketing experience are made deliberately by the company’s management.
Amazon.com has managed to manipulate the power of the Internet and balance the models of interaction and hyperlinking to come up with a wide range of data for its customers and management. The virtual system created at Amazon.com offers a broader selection of book titles than can be found in any bookstore. Customers can browse book titles, synopses, and reviews, which help make informed choices.
Information gathered from Wilke establishes that Amazon.com has set up two key systems that run its business systems (Personal communication, January 10, 2014). Amazon Web Services (AWS), announced in 2002, gives developers unlimited access to the company’s advanced technological platform. The developers build applications based on AWS, which helps run the company’s internet operations. The other business system at Amazon.com is the Amazon Simple Storage Service (S3). This system is constructed to enable easy web-scale processing. The S3 is also useful since it provides Amazon.com with dependable, fast, scalable, and cheap data storage. The S3 enables unlimited information storage and recovery using a distinctive developer-assigned key.
Amazon.com has achieved significant milestones in trying to conform to international laws regarding e-commerce. To make the company relevant to the Chinese market, the company has rolled out an official Chinese website called Joyo. It is an attempt to stay ahead of its competition, especially in the Asian market.
Amazon.com implements a flat and lean structure that enables it to be flexible and to achieve strategic planning. The company’s structure allows it to avoid the managerial dilemma often accompanying branches or outlets. It also helps in reducing operational costs and decision-making.
The company uses a Web-based Information System (WIS), which allows customers to access reasonable information while using the company website. The company gathers information from customers and other operations, then processes this information. The information must be made available to users for the company to make its revenue.
How Amazon.com Handles Security Risks Created by IT
In e-commerce, security can be viewed from two different standpoints. With regard to software development, security is connected to the features of a program or system (McLeod & Schell, 2007). One security feature is to certify that confidential data is encrypted and that passwords contain over six characters. For users, protection is more against attacks from fraudsters and not particular aspects of the software system. A secure platform should allow confidentiality of information, availability of data, and integrity of the information.
Doing business over the Internet exposes a company to many risks, especially concerning data security and fraud. To deal with internet insecurity, Amazon.com has devised authentication mechanisms that guarantee data security from illegal access (Saunders, 2009). To make items public or private requires the permission of specific users. This measure ensures that fraudsters and identity thieves are kept at bay.
The Smart Analytic Search (SAS) system used at Amazon.com is designed to detect and eliminate or minimize fraud cases. Since the system acts as a warehouse for vast amounts of data, it is built to gauge the personalization of each customer. It also assesses the efficiency of Amazon.com’s services. The Smart Analytic Search is designed to detect internet fraud, which often involves credit card fraud. Amazon.com exploits SAS to study the behavioral trends of fraud. From these trends, the company can predict the probability of fraud and the likely targets.
Recommendations
Amazon.com should seek ways of improving its Web-based Information System since this is the portion of its structure with which customers interact. Such an improvement can take the company a step ahead of its main competitors in e-commerce and improve its revenue basket. The survival of Amazon.com and its continued profitability depends on its ability to create a sustainable and flexible MIS that can adapt to the constantly changing e-commerce market. It is safe to say that Amazon.com’s success lies in its procedure of collecting and storing customer information and making informed decisions based on the analysis of such data. Though there is definitely room for improvement, especially regarding the company’s WIS, Amazon.com has devised mechanisms to ensure customer safety and continued relevance. The company constantly updates its information systems, which have been the core of its business success. The staff and management at Amazon.com believe that by constantly updating the information systems, the company is safely on the route to financial success and sustainable business growth. The security measures in place for detecting internet fraud and protecting customers from fraudsters are also important to the company’s image and repute in the face of a highly competitive market.
Conclusion
It is safe to say that Amazon.com’s success lies in its procedure of collecting and storing information from customers and making informed decisions based on the analysis of such data. Though there is definitely room for improvement, especially regarding the company’s WIS, Amazon.com has devised mechanisms to ensure customer safety and continued relevance. The company constantly updates its information systems, which have been the core of its business success. The staff and management at Amazon.com believes that by constantly updating the information systems, the company is safely on the route to financial success and sustainable business growth. The security measures in place for the detection of internet fraud and protection of customers from fraudsters are also important to the company’s image and repute in the face of a highly competitive market.
References
Bhattacherjee, A. (2001). Understanding information systems continuance: an expectation-confirmation model. MIS Quarterly, 25(3), 351-370. Web.
Gefen, D. & Straub, D. (2000). The relative importance of perceived ease of use in is adoption: A study of e-commerce adoption. Journal of the Association for Information Systems, 1(8), 1-28. Web.
Haag, S. & Cummings, M. (2008). Management information systems for the information age (Laureate Education, Inc., custom ed.). Boston: McGraw-Hill/Irwin. Web.
McLeod, R. & Schell, G. P. (2007). Management information systems. New York, NY: Pearson Education. Web.
O’Brien, J. A. (2009). Management information systems- managing information technology in the internetworked enterprise. New York, NY: Irwin McGraw-Hill. Web.
Saunders, R. (2009). Business the Amazon.com way: Secrets of the world’s most astonishing web business. New York, NY: John Willey and Sons. Web.