Analysis of Amazon Australia's Human Activity System and Recommendations for a New Information System

This report analyzes Amazon Australia's existing Human Activity System and recommends a new Information System to improve consumer experiences. It includes an overall analysis of Amazon Australia's business, its organizational form, value chain, and competitive strategy. The report also identifies the problematic areas of the existing system, stakeholders involved, and a process model using BPM notation. The DeLone-McLean Model is used to describe the areas where the existing system is not successful.

Running head: Introduction to Information System
Introduction to Information System

Introduction to Information System 1
Executive Summary
Amazon.com Inc . is conducting its business under the name of Amazon. It is an e-commerce
and cloud computing company based in Seattle, Washington. It was founded by Jeff Bezos on 5th
July 1994. It has separated its retail websites for the U.S.A., U.K. and Ireland, Canada, France,
Spain, Brazil, Italy, Australia, India, China and Mexico.
Initially, Amazon Australia dealt in online books and later on it diversified its business to video
and MP3 downloads, audiobooks downloads software, video games, apparels, food, toys and
jewelry. It also produces the electronics for its consumers- Kindle e-readers, Fire TV and tablets
and Echoes. It has also been the largest service provider of cloud infrastructure in the world. It
deals with low-end products under Amazon Basics –its in-house brand.
Amazon adopts a Human Activity System (HAS) explains the conceptual model of the human
activity. It transforms the input into output so that the stakeholder needs can be fulfilled. The
explanation of the activity can be documented in Root Definition. So, in this report, the various
aspects of the existing human activity system adopted by Amazon Australia will be explained
along with exploring its issues faced by various stakeholders. A new Information system will be
recommended along with explaining the steps to avoid future failure.

Introduction to Information System 2
Contents
Introduction.................................................................................................................................................4
Part 1) An overall analysis of the business of Amazon Australia................................................................4
a) Provide information about Amazon Australia and locate relevant information about its strategy,
how it competes in the market, and its operations...................................................................................4
b) Describe the organizational form of Amazon Australia using Mintzberg’s classification...................5
c) Present the value chain of Amazon Australia using Porter’s Value Chain Model. List and describe
the primary and support activities of Amazon Australia..........................................................................5
d) Analyze the competitive strategy of Amazon Australia using Porter’s competitive forces model.......8
Part 2) Analyzing an existing human activity system that is problematic....................................................9
a) Identification of an existing human activity system by stakeholders that is problematic along with
the analysis of the role of stakeholders in the system..............................................................................9
b) Draw a rich picture showing the issues and the concerns of the stakeholders you have identified.10
d)Use of DeLone-McLean Model of Information System Success to describe the areas in which the
existing human activity system is not successful...................................................................................11
e) Describing measures of success for the existing human activity system identified and explaining the
usage of measures where the HAS falls short.......................................................................................13
Part 3) Suggesting a new Information System support the HAS................................................................14
a) Identification of a new information system which can add value to the business of Amazon
Australia and the stakeholders involved in it.........................................................................................14
b) Description of the data and information that the new system involves and types of knowledge
which it can create and inform decision-making...................................................................................15
c)Draw a process model using the BPM notation for the newly identified information system............16
d) Classification of new information system within Amazon Australia as either: front-end, back-end,
customer-facing, or supplier-facing along with defining its reasons......................................................16
e)Description of the impact and identification of its effects of new information system within Amazon
Australia for all stakeholders.................................................................................................................17
f) Description of the measures of success for the proposed new information system............................17
Part 4) Recommendations and reflection...................................................................................................18
a)Series of recommendations to Amazon Australia’s management.......................................................18
c) Use of new information system in order to provide better service to customers and to ensure the
success of the information system.........................................................................................................18

Introduction to Information System 3
Conclusion.................................................................................................................................................18
Referencing...............................................................................................................................................19

Introduction to Information System 4
Introduction
A Human Activity System is a hypothetical mechanism which explains the purposeful human
activity which could be instituted in the real world. Such systems are notional i.e. they do not
describe the activities of the real world rather they are intellectual constructs. So, Amazon
Australia shall adopt the Human Activity Systems (HAS) which covers the aspects such as
accomplishing the vision of the business and its requirements (Sila, 2013).
So, in this report, the various aspects of the business operations of Amazon Australia in the light
of existing human activity systems shall be discussed. Also, recommendations would be given to
installing new information systems so that consumers can be served in a better way.
Part 1) An overall analysis of the business of Amazon Australia
a) Provide information about Amazon Australia and locate relevant information about
its strategy, how it competes in the market, and its operations
Amazon has launched its marketplace in Australia and it comprises of 23 categories of goods
comprising of books, computers, accessories, music, electronics, home improvement, kitchen
goods and baby care products. It has entered $300 Billions of retail market in Australia. It has
also launched its Prime subscription service in the country (Chalmers, 2018).
Technological innovation has been a part of the market strategy of Amazon. Its market strategy
and operations have been focused upon investing in technology and increasing its applications in
the sector of logistics, M& A strategy, R & D activities, AWS segments and improvement in
web services by fulfillment capacity and experimenting with Fintech (Connellan, 2017).

Introduction to Information System 5
Amazon has been investing in robotics and drones technology and has acquired patents on them.
It has around 45000 robots in its warehouses. Additionally, it has been focusing on artificial
intelligence and machine learning to increase better experiences of its consumers (Grey B
Services, 2018).
b) Describe the organizational form of Amazon Australia using Mintzberg’s classification.
In this context, the organizational form of Amazon Australia using Mintzberg's classification can
be explained by bifurcating the various successful organizations as the machine organization,
entrepreneurial organization, divisional organization, innovative organization and professional
organization. The organizational form of Amazon Australia is divisional (diversified)
organization.
This type of organization has various product lines and business units. It has central headquarters
at Washington with a number of automated divisions located in various parts of the world which
make their own decisions and have their own unique structures (Irefin, Abdul-Azeez & Tijani,
2012).
c) Present the value chain of Amazon Australia using Porter’s Value Chain Model. List and
describe the primary and support activities of Amazon Australia.
Value chain analysis is an analytical framework which assists in identifying the activities of
business which help in competitive advantage and creation of value in the business. The value
chain analysis of Amazon Australia using Porter's Value Chain Model can be explained as:

Introduction to Information System 6
Primary activities of Amazon: Its activities include inbound logistics. Amazon does not enter
into long-term contracts with its vendors in order to assure the payment terms, in particular,
availability of merchandise or the extension of credit limits. The inbound logistics of Amazon
involves FBA (Fulfillment by Amazon) which is its important component. It also uses logistics
beyond its point to serve Amazon Marketplace along with offering its services to others as well
(Awa, Ojiabo & Emecheta, 2015).
Operations of Amazon: Its operations have been organized into three parts viz. International,
Australia and Amazon Web Services (AWS). The segment of Amazon Web Services deals with
the international sales of database, storage, computer and other offerings for agencies of the
government, academic institutions and startups.
Outbound Logistics of Amazon: The Company has initiated to start its own air delivery business.
The reason behind this investment is that it is gaining independence from third parties to
facilitate the logistics. It includes digital delivery systems, acquisition of physical stores, running
executive centers and co-sourced and outsourced arrangements.

Introduction to Information System 7
Marketing and sales: The marketing strategy of Amazon includes it is excessive investing in
marketing so that it can facilitate fast delivery of products and serve its consumers in a better
way( Slack, Brandon-Jones & Johnston,2013).
Amazon Services: The major source of value creation of the company is its excellent consumer
services. Amazon Marketplace and Prime has two variations of consumes viz. buyers and sellers
of Amazon platform. It offers ‘Selling Coach Programs ‘ to its sellers so that they can escape
from going out of stock or add the selection that is being sold and improve their prices in order to
be competitive. Its return process is also dealt with through the online accounts of the consumers,
thus making the process quick and efficient.
Support Activities of Amazon
Firm's Infrastructure: The Support activities of Amazon purport to the infrastructure of Amazon
which has led to a Web-scale business. Amazon Simple DB is a web service which assists in
running inquiries on structured data in real time.
Human Resources: Amazon Australia has trained its employees who have been a crucial element
of its success. Apart from hiring full-time employees, it uses the services of temporary persons
and independent contractors to supplement their workforces ( Ebrahimi & Sadeghi, 2013).
Technological Innovations: Amazon Australia uses its technological innovations in order to
differentiate itself for better experiences of its consumers. It has executed its innovative services
such as personalized recommendations, searches inside and one-click ordering. It has utilized its
technological expertise for improving the execution of the supply chain.

Introduction to Information System 8
Amazon's procurement: Amazon Australia has restocked its distribution centers through various
suppliers. For the product segments related to media , the suppliers are large book distributors,
CD, and DVD distributors and other wholesale partners.
It uses its Sales and Operations (S & OP) process of planning in order to determine the forecasts
of each product along with keeping a track of its inventory positioning in real time which is
based upon receipts and shipments of the warehouse.
d) Analyze the competitive strategy of Amazon Australia using Porter’s competitive forces
model.
The five forces of Porter’s Competitive Forces of Amazon Australia are as follows:
1. A threat of Substitution: There is a threat of substitution to Amazon Australia. While the
number of brands has entered into the online retail market, people can also buy from physical
retailers as well. This force is low because of its expertise in serving the consumers at its best.
2. A threat of new entrants: Various new brands have entered into the e-retail market. There
are several international e-retailers on the Australian market such as E-bay and Alibaba.
Development in digital technology has abridged the entry barriers. This force is low as it is very
problematic to create a brand like Amazon because of its use of highly advanced technology and
high financial investments.
3. Rivalry in the industry: This force is intense as the players in the e-retail market have
developed and there is intense rivalry from traditional brands of retail. Even insignificant brands
are struggling for market share and they are creating competitive pressure (Baihaqi & Sohal,
2013).

Introduction to Information System 9
4. Bargaining power of Suppliers: This force is of medium nature. The supply chain system
of Amazon Australia is advanced. The number of suppliers of Amazon is large and they have to
execute their business as per the rules of the company. The forward integration of supplier is
difficult and it is easy for the company to switch between the suppliers (Chaffey, 2015).
5. Bargaining power of buyers: The negotiating power of buyers is high. It focuses on the
contentment of consumers and the quality of a product. The switching cost is low and the
number of competitors is high. The consumers have sufficient information and they have the
option to make choices based on the give information.
Part 2) Analyzing an existing human activity system that is problematic
a) Identification of an existing human activity system by stakeholders that is
problematic along with the analysis of the role of stakeholders in the system
The basic problem confronted by the e-retail giant is of insufficient and inaccurate stock. When
the consumers are purchasing on line, they look for predictable time frames. They check the
stock levels and use the delivery calculator to analyze the timings of its delivery. Due to
inaccurate stock levels, the trust of the company can be destroyed. It is important for the stock
levels to be accurate and the company should not advertise the stock that the suppliers are not
supplying.
As per Lee, Corbitt & Kong (2018), the primary stakeholders in Business to Consumer
Electronic Commerce are consumers and retailers who sell the products while the secondary
being executives who manage the entire process of procuring the products to its delivery.
Consumers face the problem of insufficient stock and the retailers are not able to manage their
stocks on the system.

Introduction to Information System 10
Another type of stakeholders is the marketing department who is involved in the branding of
Amazon Australia. The Sales department is involved in managing the sales arrangements being
offered to the consumers. IT personnel play the role of integrating the e-commerce system with
the ERP systems which are connected to inventory management, the implementation and regular
management of the Amazon Australia. Most importantly, the Operation team is involved in
ensuring that the e-commerce helps in generating efficiencies for the business.
All the departments are facing the issue of bad consumer reviews and inefficient management
resulting in the downfall in the goodwill of the company and diversion of the interest of the
consumers towards its competitors (Yu et al., 2016).
b) Draw a rich picture showing the issues and the concerns of the stakeholders you
have identified.

Introduction to Information System 11
c)Draw a process model using the BPM notation for the process of the existing human
activity system you have identified.
d)Use of DeLone-McLean Model of Information System Success to describe the areas in
which the existing human activity system is not successful
The Information Success Model ( DeLone-McLean Model) is an information system which
provides a comprehensive understanding of the Information Systems through recognition and

Introduction to Information System 12
explanation of the relationships amongst six most significant magnitudes of success along which
most of the evaluation of information systems. It was developed by William H. DeLone and
Ephraim R. McLean in the year 1992.
IS system can be implemented for analyzing the problem of insufficient stock in Amazon
Australia which can be explained as:
Information Quality: It refers to the superiority of information which the structure is able to
store, produce and supply and impacts the satisfaction level of consumers with the system and
the intention of the user to utilize the mechanism. It can influence to the magnitude to which this
mechanism is capable to produce profits to the users and the company (Raviv & Kolka, 2013).
The problem of insufficient and inaccurate inventory is due to the incapability of the system to
accumulate and deliver accurate information regarding the availability of stock. It impacts the
satisfaction of the consumers as they are not able to get the desired product and hence the system
is not capable to yield sufficient benefit for the company.
System use/Usage Intentions: It pertains to influencing the use and usage intention through
information, quality of service and systems. The use of a system is positioned to impact the
satisfaction of users which in turn impacts usage intentions. The use of a system directly affects
the net benefits which the system is capable of providing.
The problem of insufficient and inaccurate inventory is associated with the use and usage of
systems in an inappropriate way. They are not updated regarding the requirements of inventory
from the procurement department hence affecting the satisfaction of the users along with
influencing the benefits the system is able to provide.

Introduction to Information System 13
System Quality: The quality of the system is also analyzed and it influences the degree to which
this mechanism is competent to provide the benefits through conciliation relationships with
reference to user satisfaction constructs and usage intentions. The issues of inaccurate and
insufficient inventory impact the satisfaction of consumers as it shows that the quality of the
system was not satisfactory as per the expectations of the consumers (Ozguven & Ozbay, 2013).
Service Quality: The information systems are evaluated on the basis of the superiority of service
they are able to distribute. The information system is not able to deliver the best quality of
services to the consumers of Amazon Australia.
Net System Benefits: The net benefit caters to the ability to deliver through information systems
which describes its overall value to its users and organization. The net system benefit is affected
by the use of systems and user satisfaction within the systems. The net benefit of the information
system is not able to meet the expectations of the consumers due to inappropriate and insufficient
inventory.
User Satisfaction: User satisfaction directly impacts the net benefits provided by the information
systems. Users i.e. stakeholders are not satisfied with the system as it is not yielding the net
benefits to them (Sahari, Tinggi & Kadri, 2012).
e) Describing measures of success for the existing human activity system identified and
explaining the usage of measures where the HAS falls short
As per Fly (2017), the process of managerial decision making is dependent upon the accuracy of
the information systems to gather and process data according to the information systems. Hence
efficiency denotes the method in which inputs are being used by the system, so in case of

Introduction to Information System 14
inaccurate and insufficient inventory, the information system adopted by the company should
accurately process the data to convey the message of mismanagement inventory system to the
users so that it can be managed on time so that the consumers can have the best experience while
shopping from Amazon Australia.
Effectiveness and efficacy evaluate if the system is delivering the desired output. The system
should produce accurate results in respect of procurement and availability of the products as
desired by the consumers.
Part 3) Suggesting a new Information System support the HAS
a) Identification of a new information system which can add value to the business of
Amazon Australia and the stakeholders involved in it
The new information system would assist in better inventory tracking, effective fulfillment of
orders and streamlined management of consumers. It would have a master file for stock
management would act as a central source for managing the data of inventory across the system.
It would ensure that availability of consistency and accuracy of a stock level at all the time
(Stanger et al., 2012).
As per Morufu & Olayimika (2016) it would both affect the primary and support activities of the
company as it involves the sales department would browse through the digital catalog and offer
insights to the consumers with updated data and consumer order history. The other shareholders
are service staff of the consumers who would manage the software for managing the orders
which in turn would be synchronized to the ERP system of Amazon Australia.

Introduction to Information System 15
The Marketing team would also be involved as they would get a chance to be connected to the
retailers which would help them in communicating directly to the retail consumers. The
warehouse staff is directly linked to the sales department as for the shipping and packing would
become easier if there is a greater accessibility to the inventory data. Lastly, another important
component is the IT team which shall implement a manageable sales order system for enhancing
the sales and driving the business forward (Savrul, Incekara & Sener,2014).
b) Description of the data and information that the new system involves and types of
knowledge which it can create and inform decision-making
Inventory management software would involve the data and information to track the levels of
inventory, sales, deliveries, sales and orders. The software would display the information related
to reordering point, service management, product identification and asset tracking and
optimization of inventory.
The inventory management software can create knowledge related to tracking of product,
identification of product and notification of restocking. It can integrate inventory management to
the site of Amazon Australia through centralized accessing of the inventory through a common
dashboard. It would also enhance operationally and supply chain efficiency through providing
access to the products thereby giving a better insight into the real-time levels of inventory
(Herbon, Levner & Cheng, 2014).

Introduction to Information System 16
c)Draw a process model using the BPM notation for the newly identified information
system
d) Classification of new information system within Amazon Australia as either: front-end,
back-end, customer-facing, or supplier-facing along with defining its reasons
The components of the new information system would be classified as follows:
Call center and consumer service would be classified as the front end which would include
functions as Payment Card Industry compliance and expanded consumer and order notes as they
directly transact with the queries of consumers. The back end application consists of managing
of order and its fulfillment as it works at the back end to ensure that all the orders are fulfilled on
time. While real-time inventory management is a customer facing component as it plays a crucial
role to make consumers happy so that they can stay loyal to the business, the tools of tracking
pixels, product reviews and shopping engine feeds can be categorized as supplier faced as,
without this platform, it is not able to deliver agile capabilities to settle itself to the trends of
market and consumers (Wild, 2017).

Introduction to Information System 17
e)Description of the impact and identification of its effects of new information system
within Amazon Australia for all stakeholders
Installing the newly introduced inventory management system would keep a track of core and
non-core products as it is essential for the company to have an adequate stock of its core
products. It would also help in managing the inventory according to Just In Time (JIT) Inventory
Management. It is used to increase the efficiency and decrease the wastage. It would help all the
stakeholders to manage the supply and demand of stock so that the consumers can have the better
experience (Gordon & Gupte, 2016).
Installing the inventory management system in the company can have effects on all the business
functions such as operations, marketing, finance and accounting. The inventories are held by the
company for precautionary, speculative and transactional motives.
f) Description of the measures of success for the proposed new information system
There are several measures for evaluating the aspects of efficiency, effectiveness and efficacy for
the new information systems as task completion time. It should be evaluated how much time is
invested in the completion of the task. Another metric would be the satisfaction of the staff. The
ability of the staff to complete the task is the milestone of the entire inventory management
program. Another metrics would be the satisfaction of the vendors and the last scan date of the
assets which are of high mobility and need to consistently monitored (Uthayakumar & Priyan,
2013).

Introduction to Information System 18
Part 4) Recommendations and reflection
a)Series of recommendations to Amazon Australia’s management
A set of recommendations should be given regarding the installation of new information system
in Amazon Australia regarding the better management of the demand and supply of stock with
scheduled listings, inventory tracking, shipment handling, product catalog building and
consumer feedback management. It should also provide a digital marketing channel to get the
products posted over the internet without many attempts.
c) Use of new information system in order to provide better service to customers and
to ensure the success of the information system
The information system can be used for providing better services to the consumers by avoiding
overselling a single product to two consumers on two different channels. It happens when the
levels of inventory are not updated fast. It should also result in updating the stock in real time.
There should be centralized inventory management systems. It is cost effective and can manage
the team well ( Ogbo & Ukpere,2014).
Conclusion
Hence to conclude, it can be said that running an e-commerce company is a tough process.
Effective management leads to the success of the business. It can help to avoid overselling and
upsetting the customers.

Introduction to Information System 19
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