Information resources are traditionally viewed as information technology (IT) assets and capabilities that are available for businesses to help them perform processes, complete tasks, achieve strategic goals and improve competitive advantage. Such resources include technology, data, IT infrastructure, devices, IT knowledge, hardware and software among other available tools and skills (Pearlson et al. 36-38).
The purpose of information resources is to contribute to businesses’ efficient processes and the operations associated with producing and promoting services and goods. In this context, it is important to examine how information resources can influence the business strategies and operations of a leader in e-commerce such as Amazon based on IT advancements. The purpose of this paper is to provide background information about Amazon, discuss the organization’s strategic framework and use of information resources, determine possible issues, identify organisational opportunities and challenges and propose an improved business process.
Amazon.com is a leading e-commerce company in the United States. It was established by Jeff Bezos in 1994 and became known as Amazon in 1995. The company quickly won the highest positions in the online retailing industry following the business-to-business (B2B) and business-to-customer (B2C) models (Al Imran 3-4). Books comprised the primary product sold through the website platform in the 1990s, but later, Amazon refocused on selling not only books but also video and audio resources, electronics, furniture, apparel and even food (Al Imran 3-4; Pearlson et al. 2). The business expanded to producing consumer electronics, including Kindle readers for electronic books and Fire tablets.
Currently, Amazon’s annual revenue is more than $175 billion, and it holds the second position in the world in terms of international sales while supporting customers all over the globe with the help of separate retail websites in different languages (Amazon 18). The firm’s business success highly depends on its effective strategic framework and use of information resources.
The strategic framework of any company is based on balancing the development of a business strategy, an organisational strategy and an information strategy. The foundation of Amazon’s business strategy is its mission to develop as a primarily customer-centric company to provide people with opportunities to find and buy anything they want online (Amazon 3-4). As a result, the key focus is on making Amazon.com the most customer-friendly website possible, developing this online platform to be suitable not only for consumers but also for sellers and partners and applying the latest information technologies for improving processes.
To achieve these purposes, Amazon has applied the one-click system, Amazon Web Services (AWS) and modern secure systems (Amazon 3-4). The company follows an innovation-oriented strategy centred on discovering new approaches to doing business, producing and offering innovative products and services and improving business processes using unique techniques.
The use of innovative technologies and the sphere of business have also influenced the company’s approach to its organisational strategy. Thus, communication between departments and all processes are realised and regulated with the help of systems that facilitate the inside sharing of data (Al Imran 5). Such innovative approaches are important in contributing to the company’s development as a leader in the competitive e-commerce industry.
Amazon’s information strategy as a component of its strategic framework is based on the effective use of hardware, software, networking and data viewed as key information resources (Al Imran 3-5). From this perspective, it is possible to state that information resources and the development of information systems influence each component of the company’s strategy.
Strategic Use of Information Resources
Amazon strategically uses available information resources that influence the competitive advantage of the firm in the market. To guarantee the effective work of the company’s websites all over the globe, much attention is paid to using only the most innovative hardware, software, networks, website platforms and data as IT assets. It is important to ensure that all software and applications involved are regularly updated and the technological support for the websites and their servers is provided at all times.
These activities are important to make sure that customers have access to Amazon’s one-click system for buying products and all filter technologies on websites work appropriately (Al Imran 4-5). To build its information repository, Amazon captures data on visited pages, searches, time spent searching, clicked-on products, IP addresses and other data. All information regarding a customer’s financial data is stored to enhance further transactions and payments (Prescott 92-93). As a result, customers can buy products with one click, and other appropriate products are offered through a system of collaborative filters and analysed preferences.
To manage a wide range of products and cooperate with retailers, suppliers and customers, Amazon launched AWS to compute and store data, using databases and analytics that apply cloud computing principles. Amazon uses AWS for its own purposes and proposes this platform to customers. The company’s virtual servers are characterised by a high capacity, and they guarantee the efficacy of the entire information system. Amazon also relies on service-oriented architecture that allows for managing data effectively through a system of decentralised services and platforms while making the process quick and independent (Al Imran 4-6). The application of these systems requires focusing on developing IT capabilities incuding hiring high-quality specialists and training employees in the use of information resources.
Issues Surrounding the Information Resources and Impact
In spite of the fact that Amazon efficiently applies all available information resources, other issues also need to be addressed in focusing on IT infrastructure and IT management skills. The problem is that every second, thousands of customers use the company’s website in their country while affecting the speed and quality of operations related to Amazon’s customer-relationship management (CRM) system (Al Imran 3-4). Using available servers, applications and the high-quality technical skills of the support team members, this system should guarantee fast and secure searching, data mining, data processing and storage.
Regular updates of the system are required to protect customers’ personal data, collect information about consumers and ensure their searching will be as fast and reliable as possible. To address issues associated with fraudsters’ activities, Amazon uses the Smart Analysis Search tool that can interpret behavioural patterns in order to prevent fraud and protect customers (Al Imran 3-4; Pearlson et al. 39). From this perspective, the effective use of available information resources with a focus on adopting those that are most innovative provides Amazon with opportunities to address all possible issues related to managing and securing its online platforms all over the globe.
Organisational Opportunities and Challenges
The key organisational opportunities for Amazon that are associated with information resources are the further improvement and promotion of computing clouds, security systems, AWS and storage services. These resources not only contribute to the company’s data management, but they are also popular among customers. For example, further investments in developing Elastic Compute Cloud, Elastic Load Balancing, a virtual private cloud and Simple Storage Service among other services can significantly contribute to improving the company’s management of high workloads, a high volume of data, analytics and storage (Amazon 61). These services also work to expand the market opportunities for the company while attracting more customers interested in purchasing innovative IT tools and resources.
However, challenges are also involved in using information resources in terms of IT assets and capabilities. Amazon professionals need to effectively manage thousands of customer orders and inventory exchanges daily through their transaction-processing systems (Al Imran 3-5). Any technical problem associated with accepting an order, authorising a transaction or shipping a product can lead to customer dissatisfaction (Pearlson et al. 39).
Therefore, Amazon is constantly challenged to update its information systems and resources with a focus on providing more automation and orientation towards customers and their preferences that are carefully recorded by the system (Amazon 61-62). Much attention should be paid to standardising and improving the work of these information-sharing systems in the company on a daily basis in order to enhance the advertising and promotion of products and services.
Improved Business Process
Amazon’s use of information resources can be viewed as efficient, but it is still possible to propose an improved business process for advancing its operations with an emphasis on applying these resources. The first step in this process is to enhance the functioning of Amazon’s departments in terms of implementing advancements to the system for exchanging data on customers’ requests, complaints, discounts and shipping.
It is possible to improve the CRM system while adding new applications for managing customers’ personal and order-related data (Al Imran 3-8). Improvements are also required for managing shipping operations worldwide because the number of customers and orders is constantly increasing, necessitating the most advanced system for coordinating the work of distribution centres. It is also possible to use information resources to improve online support for customers with an eye to attracting more consumers.
Other specific processes that may be affected due to improved use of information resources are associated with analysing and managing data regarding customers’ activities on websites and related to promotion. In order to effectively address the target audience, Amazon should constantly work on using software for storing and analysing information about consumers’ searches, reviews, product rating, choice of prices, regular transactions and available discounts through improved website filtering and data storage systems (Pearlson et al. 2, 39).
Amazon needs to focus on applying more innovative technologies for gathering and interpreting information about sales, trends, newly introduced products, customers’ preferences, economic and investment trends, daily transactions and competitors’ propositions (Prescott 92-93). These data will directly influence the development of a business and marketing strategy.
The next step is to implement innovative applications for managing employees’ work with an emphasis on developing IT technical and management skills. Information on employees’ performance and recruited and retired staff should also be easily collected and shared within the internal information system. More attention should be paid to using information technologies and online platforms in developing employees’ IT skills with the help of different training modes while addressing specific learning curves that usually vary for the novice and experienced staff in terms of working with IT (Pearlson et al. 160-163). The efficient use of information resources will contribute to Amazon’s sustainability, and IT will allow managers of the company to monitor how employees apply their technical skills, evaluate customers’ activities online, forecast changes in demands, refer to suppliers’ and customers’ feedback and control all business processes.
Discussion and Conclusion
The reviewed data on the use of information resources by Amazon indicate that the company is effectively using all available opportunities for making its websites and services as innovative as possible. The company can be discussed as a perfect example of applying IT in supporting not only organisational and information strategies but also business strategy because of operating in the competitive sphere of e-commerce. Thus, Amazon efficiently uses the most innovative IT infrastructure while developing its own systems and technologies for improving business processes and operations, for example, AWS (Al Imran 3-8).
In addition, the company has succeeded in storing and managing customer and supplier information with the help of developing independent systems, the core of business development in the retail industry. Moreover, Amazon attracts only high-class specialists to work in the areas of web design, network design, systems and data analysis and programming (Pearlson et al. 39). Company managers are oriented towards the constant evaluation of employed and available technologies in order to apply only the most effective technologies.
This successful approach to managing information resources has allowed Amazon to develop as a leader in e-commerce and to offer the most innovative IT solutions for its own use and for that of customers. Although some issues may be associated with applying IT management skills and processing thousands of requests and operations each day, Amazon’s systems for working with customer, employee, supplier and stakeholder data appear efficient enough to address the company’s needs. Thus, Amazon has developed the most appropriate system for using information resources in the sphere of e-commerce.
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Prescott, Michael E. “Big Data: Innovation and Competitive Advantage in an Information Media Analytics Company.” Journal of Innovation Management, vol. 4, no. 1, 2016, pp. 92-113.