Amazon Business Information Systems. Data Acquisition and Management in its Value Chain


Term Paper

19 Pages


Excerpt

Table of Contents

Introduction

System Description

Business Process Analysis

Customer attraction and retention

Decentralization of Decision-making Processes

Opportunities that Result for Implementation of Information System

Risks in the Deployment of Information Systems

Compliance with the Legal Requirements

Bibliography

Introduction

Amazon is one of the leading E-commerce multinational with a vast clientele and customer base. Amazon utilizes specialized information systems in its business processes to attain competitive advantage through improved efficiency in the collection, storage, and analytics of their customers’ personal information. This study seeks to assess the management information systems implemented by Amazon and how they influence its business process analysis through data acquisition and management in its value chain. A detailed description of the information systems in terms of interoperability with different devices, analysis of how it improves business processes to promote competitive advantage, the opportunities and risks of implementing the business information systems, and the issues in the general implementation of the systems in decentralizing the decision-making processes will be the key focus of this paper.

System Description

Implementation of advanced information systems has been one of the greatest success factors for Amazon. Integration of the information systems into business process analysis has play a key role in the decentralization of decision-making processes thus increasing the efficiency of key business processes. Amazon operates a two-piece information management software that comprises of the Simple Storage Service that is connected to its integrated database and the Amazon Web Service that promotes access to the E-commerce platform. The web service allows customers to creation of user accounts and personalize their profiles for improved efficiency in the processing of transactions. Amazon Web Service is made up of different systems with different functionalities to promote efficiency in information management and delivery of business processes (Al Imran, 2014). The system is highly advanced to promote high levels of interoperability with any kind of internet-enabled device for effective communication between buyers, sellers, and the Amazon staff. The robust web service combines distinct features such as reliability, scalability, security, and efficiency to make it highly effective in delivering business processes through a Customer Relation Management (CRM) system. An integrated Smart Analysis Search system operates to provide optimal security for user information and also to promote personalized customer service based on the customer profile (Al Imran, 2014). Moreover, the system is built on a Service Oriented Architecture (SOA) to promote service decentralization for improved scalability of the system.

The Amazon transaction processing system is a key component of the Business Information System, which allows customers to make purchases securely and efficiently. Distinct features such as 1-click purchase and secure, encrypted, credit card payment make this information management system highly reliable and easy. The Amazon information management systems are also integrated with special functionalities such as the intelligent recommendation system that analyzes the previous search queries of a customer to make a recommendation for similar items through a process known as data mining (Adaji and Vassileva, 2017). This makes the system highly interactive thus resulting in increased customer satisfaction. The information on customer orders is processed by the supply chain management system that is integrated into the payment system and the web service (Al Imran, 2014).

All information collected through the web service is directed to the Enterprise Resource Management system that runs on the Oracle database management system. This system automates the ordering process with high levels of accuracy in order scheduling and delivery tracking. Customer Relation Management system is another critical element of the Amazon information system that has significantly contributed to company growth over the years. It collects customer data such as the credit card information, transaction history, and order records through the use of specialized sorting algorithms that stores the information in the customer profile (Catelli et al., 2017). It encrypts sensitive information regarding credit card data and redirects the customer order details to the delivery system for shipment (Al Imran, 2014). The Customer Relation Management system also collects information on customer feedback, queries, and product reviews to improve scalability and efficiency.

Business Process Analysis

Effectiveness of the Amazon information systems is determined by its efficiency in delivery key business processes such as ordering, transaction processing, order delivery, and customer relations management. Amazon has successfully integrated different components of its information system with its database and customer relationship management system to improve business process analysis. This is achieved through decentralization of the decision making processes thus increasing information transparency. This has made it possible for the company to utilize business intelligence analytics to understand the market environment and inform the formulation of improvement strategies to ensure that the systems are able to process more orders in a unit time. Amazon information management system creates a virtual copy of the physical marketplace to enhance the understanding of variations in demand and supply (Hajli, 2012). Integration of communication structures with the information system allows for business process automation and faster resolution of customer queries. Moreover, the order processing and delivery systems are streamlined with the ordering process to enhance the real-time resolution of customer queries for a smooth flow of business processes.

When a customer places an order, through the web service, the information system sends a query to the data warehouse and avails the product details to the customer’s consol. Once the customer is satisfied with the product and adds it to the cart, the payment processing system redirects them to the payment form where the customer adds location and makes electronic payment. The customer receives a payment notification and the product details through email or short message service. The transaction system automatically records the payment details and sends them to the supply chain system, where the order is prepared for shipping. The supply chain system notifies the customer that the product has been shipped through mail service or sms.

Customer attraction and retention

Despite the increased competition by other e-commerce websites, Amazon has been able to attract and retain more customers due to improved business process analysis. The information management is automated such that it analyzes the customer personality and interests to make a recommendation on their favorite products through a customer relations management strategy for customer acquisition and retention. The chart below shows the business process analysis at

Amazon.

Process automation and sophisticated communication structures result in value creation for its customers. The amazon information systems have resulted in value addition for the customers in the following ways;

1. Enhanced customer care – Scalability, efficiency, and security of the Amazon information systems have significantly improved communication with its staff and users. This gives the customers a rich user experience with the system since they are able to get a solution to various issues in real-time. Satisfied customers spread the word to other people thus attract more people to the website.
2. Limitless inventory – Initially, Amazon was created with the sole purpose of selling books to its customers. However, the service diversified over time to include movies, video games, music, electrical appliances, clothing, and many other products due to increased demand.
3. High margin, low prices – This strategy has played a key role in attracting and retaining more customers to Amazon through increased competitive advantage. By selling at low prices, the company is able to sell more products within a short time thus making more profit in the long-term (Claus, 2013).

Decentralization of Decision-making Processes

One of the key benefits of an integrated information system is that it allows for the decentralization of decision-making processes to reduce the managerial diseconomies, especially for an organization with a vast customer base. Amazon information system is managed such as the individual sub-systems the autonomous decision-making functionality for differentiated resolution of customer queries and order processing. This creates a smooth flow of core business processes as each functional unit operates independently. Different components of the Amazon information system collect data from key business processes and stores it to the central database in the appropriate format for analytics in the decision-making processes (Zhu et al., 2017). The information system promotes decision-making processes in the following ways;

Providing secure access to information – Amazon managers require fast access to reliable information regarding the marketing, financial, inventory, and employee performance of the company. This information is important in identifying the areas of weakness, strengths, and opportunities to inform strategic-decision making to improve the business processes. The information management system promotes access to the information through automation of the collection, sorting, and centralized storage of information such that it is easily accessible for retrieval and analytics.

Interpretation – Specialized data analytics algorithms are embedded in the architecture of the Amazon information management system to facilitate data interpretation. This is important in helping managers to understand how their decisions influence key business processes. Basically, the raw data collected from customer profiles, ordering, delivery, and payment processes are collated into specially formatted reports for easier identification of trends and patterns (Papathanasiou and Kenward, 2014). This enables the decision-makers to coordinate action within different levels of management and also understand how key decisions influence the change of business processes.

Decision support System – In addition to allowing information access and interpretation, Amazon information plays a key role in central decision support. The information system also acts as a decision-support system through its use in the context of structured and unstructured decision making processes through. The decision support system creates effective frameworks and models for the analysis of underlying data through interactive decision aid (Papathanasiou and Kenward, 2014). Amazon information decision support system is classified into the following categories;

Communication driven decision support – The information system allows for multiple teams to work on a common task to develop a series of actionable decisions to improve certain business process. In this case, the decision processes mainly involve client-server interactions through audio, video, and groupware channels.

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Excerpt out of 19 pages

Details

Title
Amazon Business Information Systems. Data Acquisition and Management in its Value Chain
Author
Pages
19
Catalog Number
V538135
ISBN (eBook)
9783346154682
ISBN (Book)
9783346154699
Language
English
Tags
acquisition, amazon, business, chain, data, information, management, systems, value
Quote paper
Washington Mutwiri (Author), Amazon Business Information Systems. Data Acquisition and Management in its Value Chain, Munich, GRIN Verlag, https://www.grin.com/document/538135

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