Role of Information System in Amazon

This report analyzes the role of information system in Amazon, a leading ecommerce organization. It discusses the past, present, and future role of information system in managing sales, marketing, and customer relationship management. The report also provides a critical analysis of the effectiveness and improvements in these information systems.

Running head: MANAGEMENT OF INFORMATION SYSTEM
Management of Information System: A case study of Amazon
Name of Student
Name of University
Author Note

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Table of Contents
Introduction..........................................................................................................................3
1. Analysis of the Role of Information system in Past: Ecommerce...................................3
1.1. Information system in Managing sales: Transaction Processing System.................4
1.1.1. 1-click Purchase.................................................................................................4
1.1.2. Secure debit/credit card payment.......................................................................5
1.2. Marketing..................................................................................................................5
1.3. Customer Relationship Management, for managing customers’ query....................5
1.4. Critical Analysis: Good and Bad..............................................................................6
2. Role of Information System in Present: Amazon............................................................7
2.1. Improvement in Payment Options............................................................................8
2.2. Improvement in Marketing.......................................................................................8
2.3. Customer Relationship Management through Interactive Searching system...........8
2.4. Critical Analysis: Good and Bad..............................................................................9
3. Role of Information System in Future: Amazon...........................................................11
3.1. Payment and Transactions......................................................................................11
3.2. Marketing................................................................................................................12
3.3. Customer Relationship Management......................................................................12
3.4. Critical Analysis: Good and Bad............................................................................12
Conclusion.........................................................................................................................13

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References..........................................................................................................................15

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Introduction
Information system is an integral part of the business of an organization particularly
because it gives the support needed in the business process (Laudon & Laudon, 2016). An
information system supports the business process by providing the needed support in information
management. The report aims in analyzing the role of information system in Amazon. Amazon is
an American internet sales company. It is a multinational technology company that is based on
Washington. It mainly focuses on ecommerce, cloud computing and digital streaming. Amazon
is one of the four big technology companies that are listed along with Apple, Google and
Facebook. Amazon is capable of managing the well-established innovation in technological field
(Soltani & Navimipour, 2016). Amazon has turned out to be one of the world’s largest
ecommerce marketplaces. The company could achieve this position by making an effective use
of different information systems, since the inception of the company.
The report will provide an effective analysis of the information system’s role, in
ecommerce organization in the past, and will indulge in a critical analysis of the information
system’s role in Amazon in present as well (Laudon & Laudon, 2015). Amazon is considered to
the largest company in internet by revenue and currently, it is the second largest employer in the
United States. The company was founded in July 5, in the year 1994. With the increase in the
customer base, Amazon could surpass Walmart as one valuable retailer by the year 2015. The
report will be discussing information system’s role in the shaping the future of Amazon.
1. Analysis of the Role of Information system in Past: Ecommerce
Ecommerce industry is based on transactions that are done over an electronic medium.
Majority of the operations within this ecommerce organization is managed by some specific

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information system. This section of the report will critically analyze the role of information
system in an ecommerce organization (Goetsch, 2014). Three most significant functions that are
common in every ecommerce organization include the function of processing the transactions,
the functions related to marketing and the function of managing the relationship with the
customers (Ritala, Golnam & Wegmann, 2014). The role of each of these information systems
will be critically analyzed in the following sections to compare those functions with that of
Amazon, which is one of the leading ecommerce organizations in the world.
The details of the information systems and their functionalities are indicated in the
subsections below. In the later section of the report, the process by which, these information
systems are used in Amazon will be critically evaluated.
1.1. Information system in Managing sales: Transaction Processing System
The business of ecommerce is mainly based on transactions over internet. Therefore,
transaction over internet is one of the main functionalities of an ecommerce organization. The
transaction processing system (TPS), is used in ecommerce to take orders from the customers
(Rossman, 2016). The different components of the transaction processing system are indicated in
the following sections.
1.1.1. 1-click Purchase
One of the main functionalities of the TPS system includes 1-click purchase. Amazon is
able to customize the process of 1 click ordering in order to ascertain a personalized shopping
experience for the customers (Mandel, 2017). The registered customers, who have registered and
activated functionality, were able to place their order.

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1.1.2. Secure debit/credit card payment
The transaction processing system of the organization provide a secure credit and debit
card payment option to the customer for an hassle free order placement and payment. This is
quite important as the in an ecommerce organization, customer satisfaction becomes the first
priority
1.2. Marketing
Marketing has played a very significant role in the business of ecommerce in the past and
is still and is still an integral part of the ecommerce business. Marketing process in ecommerce is
considered to be an act of driving awareness and action towards a particular business.
Ecommerce marketers in the past have made use of television advertisement as a major
marketing tool (Chaffey et al., 2014). In the past as well, the technique of marketing involved
social media but it was used in a limited scale in comparison to that in a present (Khanna &
Sampat, 2015). Marketing is an important function in ecommerce as it is one of the most
common tactics of driving revenue of an organization. Marketing in an ecommerce organization
is mainly based on the strategies of achieving an effective growth in the traffic.
1.3. Customer Relationship Management, for managing customers’ query
One of the most important information systems that contribute to setting up of the
business of ecommerce is customer relationship management. The customer relationship
management has considerably helped in gaining the satisfaction of the customer and their
loyalty. Management of the relationship with its customers is one significant need of an
ecommerce organization (Kumar & Kumar, 2014). In ecommerce, all the operations takes place
over internet and therefore, infusing the customers’ trust is one important factors that helps in

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business growth. Thus, this function of customer relationship management is present in
ecommerce business organizations in the past and forms a significant part of the business in
present as well.
From the discussion above, it can be concluded that the transaction processing, the
marketing and customer relationship management are three significant functions that were used
in the business of ecommerce in the past.
Without the use and the significant contribution of these information systems, setting up
of an ecommerce business would not be possible. During the inception of ecommerce business,
the above three information system that are mentioned, were used in its basic form. All the above
three information systems are still used in different ecommerce organization, however, in a more
advanced form.
1.4. Critical Analysis: Good and Bad
Good:
The ecommerce business could grow only because of the correct use of all the
functionalities. The secure transaction, appropriate marketing processes along with effective
management of the relationships with the customers help has helped in reaching to the success
point in ecommerce business.
Bad:
The online transaction systems had resulted in serious data breach leading to the leak of
confidential data of the customers

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Marketing through television was effective to some point; however, more advance form
of marketing was needed for business success
The customer relationship management systems needed improvement as the response
time for the customers’ query was high.
2. Role of Information System in Present: Amazon
Amazon has been making use of the information system in managing certain specific and
important functionalities (Noe et al., 2017). Amazon understood the need of investing in the
information system in for improving the security of a system. By the year 1995, Amazon could
form a huge database that was running on digital server (Alpha). From the year 1995, Amazon
started on investing in different types of information system and by the year 2000, the company
had renovated their entire system (Galliers & Leidner, 2014). Amazon makes use of different
information system to manage the communication, and for fulfillment of the order.
As discussed in the previous section, the analysis of the information system needs, in the
organization will be discussed in this section (Flanagin et al., 2014). The information systems
that is discussed in the previous section are used in Amazon, for managing the effectiveness of
the different processes existing within Amazon. However, majority of the information systems
have improved the process of its operations. Although the functionality and the role of these
information systems remains the same, there has been improvement in their performances and
efficiency (Venkatesan, 2017). It is necessary for managing of the effectiveness of the
information system within the organization; Amazon has invested in improvising the existing
information systems.

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2.1. Improvement in Payment Options
Amazon has maintained efficiency in offering secure payment options to the customers
since its inception. However, there have been a lot of improvements in the payment options that
are offered by Amazon. As an improvement in the payment options, Amazon now offers its
customers the facility of paying cash on arrival of the product at their doorstep (Spencer, Harding
& Sheahan, 2014). The cash on delivery feature is a great improvement in the payment options
offered by Amazon. The cash on delivery option is an improvement in the transaction processes
offered by Amazon (Kumar & Kumar, 2014). This improvement is designed to improve the
shopping experiences of the customers. Many customers often feel skeptical in sharing their card
details in an online platform and therefore, this particular improvement is brought about in the
process.
2.2. Improvement in Marketing
Marketing is one of most important functions related to the business in Amazon. The
marketing process that is followed in Amazon helps its customers to locate and discover the
various ranges of products that are offered by Amazon (Pogorelova et al., 2016). The role of the
function of marketing is quite significant in Amazon as it helps in increasing the customer base
of the organization. However, there have been a lot of improvements in the process of marketing
that is followed in Amazon. Amazon now, mainly invests in marketing through social media.
Social media is mainly used as a tool for marketing particularly because it helps in attaining a
huge customer base (Shih, 2016). Innovative marketing strategies are designed for reaching out
to greater number of customers through social media.
2.3. Customer Relationship Management through Interactive Searching system

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Interactive searching system is an information system that helps in maintaining the
function of managing the relationship of the customers and to improve their shopping
experiences. Amazon provides a searching option that offers the customers to select the desired
items from the items catalogs. This enhances the shopping experiences of the customer and
forms an effective process by which a customer relationship is managed (Umberto, 2015).
Earlier, in Amazon, the customer relationship management was only concerned with settling of
the queries of the customers. Now, with the use of interactive searching system, Amazon aims in
providing more enhanced experiences to the customers. The interactive searching system
provides a seamless experience to the customers and therefore helps in effective management of
the function related to customer relationship management. The interactive searching system
therefore contributes to the management of the business processes within Amazon.
2.4. Critical Analysis: Good and Bad
The above three information system critically analyses the role of these information
system in managing the different functions within the organization. The recommender system
that is used in the organization is generally used for managing the sales by improving the
shopping experiences of the customers. The recommender system is linked with the interactive
searching system that is further used in the organization for managing the sales of the products
within the organization. Thus, it can be said that the recommender system and the interactive
system helps in improving the current business of the organization (Phillips, 2016). The
customer satisfaction that is achieved by the recommender system and the interactive searching
system helps in improving the business benefit and also help in improving the organization’s
revenue.

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Along with the interactive searching system and the recommender system, the
management information system, provide an opportunity of managing all the major
functionalities of Amazon, including the sales, booking and customers in an effective manner.
Therefore, it can be said that the above three discussed information system provides Amazon
with the benefits of easier management of the important operations, such as the operations of the
customers, sales and the operating processes that is prevalent in the organization (Cardona,
Duch-Brown & Martens, 2015). All these information systems were in place in the organization
in the past as well. However, over the years, the above mentioned information system have
improved, to match the functionality of the organization (Kumar & Kumar, 2014). The prompt
order placing and hassle free order delivery have helped the organization in gaining the
customers; trust over the years. Thus, it can be said that the different information systems, that
are in place within the organization helped Amazon to grow by gaining the customers’ trust and
by streamlining all the business processes of the organization.
Good
The secure transaction system has helped in increasing customers’ trust on payment
system of Amazon and has further helped in gaining competitive advantage
The improvement in the marketing process of Amazon has helped in reaching to a greater
number of customers
The effective customer relationship management has helped the business of Amazon in
gaining customers trust and loyalty.
Bad

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The payment processing system used in Amazon is although quite improved, there should
be more options for payment. Amazon is working on improvising the same
Use of social media as a marketing tool although is advantageous, the negative comments
or reviews in the social media has the capability of acting as a huge business risk.
The customer relationship management system involves virtual assistance. This lacks
human touch and therefore can be a major cause of customers’ dissatisfaction.
3. Role of Information System in Future: Amazon
The information system usage is inevitable in Amazon’s business as it mainly deals with
ecommerce. With the presence of number of intelligent information system, Amazon has been
able to devise an effective customer relationship marketing, which in turn helps in enhancing the
logistic operations accordingly. However, there is a lot more to implement in the field of
information system in Amazon. For Amazon, it is necessary to establish the customer
relationship management intervention across all the business operations running in Amazon. In
future, there are high chances of implementation of artificial intelligence systems and intelligent
virtual agents that can help in upgrading the bonding with the customers (Phillips, 2016). For
improving the management of customer relationship, in a more effective manner, Amazon can
make use of these type of information system to ascertain that effectiveness in the management
of the relationship among the customers are achieved (Cardona, Duch-Brown & Martens, 2015).
Increased sophistication in the artificial intelligence can indicate use of avatars or branding
avatars exclusive for Amazon, which will eventually revolutionize the management information
system.
3.1. Payment and Transactions

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Although Amazon offers improved payment options, there is scope of improvement in
the payment system as well. Amazon is working for delivering best services to its customers and
therefore, it can be predicted that the payments option will be improved as well. This might
include improvement in the security aspects of the card payment along with the improvement in
the refund processes followed in Amazon.
3.2. Marketing
The data gathered from the information systems used in Amazon can further help in
customizing the marketing campaigns. The improvement in the information system can
significantly help in better management of the marketing campaigns (Chaffey & Ellis-Chadwick,
2019). These data can be gathered from the management information system and therefore, it can
be said that the data obtained from the management information system will significantly help in
improving the marketing campaigns.
3.3. Customer Relationship Management
The data from the customer relationship management system will help in improvement of
the business processes in Amazon as it will help in having a better understanding of the
preferences of the customers which will in turn help in managing the customers (Cardona, Duch-
Brown & Martens, 2015). Furthermore, Amazon needs to improve the interactive searching
system for improving the business of the organization. Thus, it can be said that the information
system in Amazon have contributed to the business growth in past present and future.
3.4. Critical Analysis: Good and Bad
Good:

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Amazon is thinking of improvising its existing transactional processes and methods of
payment. This is good for business growth
Improvement of marketing strategies by incorporation of advanced SEO is needed as it
will help the customers to reach out to Amazon in an effective manner.
Improvement in the management process of the customers’ queries will increase the
efficiency of the business process.
Bad:
Improvement in the transaction processing systems can significantly increase the
complexity of the process. Customers might find difficultly in management of the same.
Increased dependence in social media marketing increases the business risk that the
organization might face as a result of negative reviews.
More modernization of the customer relationship assistant offered by Amazon will lead
to lack of human touch in dealing with the customers.
Conclusion
The above report discusses the information system’s role in improving the business
process of the chosen organization Amazon. Since its inception, from the year 1994, Amazon has
been using different information systems that helped in business growth. Amazon turned out to
be one largest ecommerce organization across the globe. The information systems that were used
in Amazon are discussed in the report. In this report, the effect of the information system in
future is discussed. It can be anticipated that Amazon will improve its existing information
system to improve the efficiency and the functionality of each of the information systems.

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Amazon makes efficient use of technology to support its business expansion and to fulfill the
customers’ demands.

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