Information Technology Strategies of Amazon: CRM and SCM

This report provides a detailed analysis of Amazon's Information Technology strategies, specifically focusing on Customer Relationship Management (CRM) and Supply Chain Management (SCM). It explores how Amazon utilizes IT to gather, store, and analyze customer data, enhancing efficiency and driving business growth. The report delves into Amazon's CRM strategies, including data collection, personalized recommendations, and customer support, highlighting their impact on customer engagement and loyalty. It also examines Amazon's SCM, including warehousing, delivery, and the use of technology like Amazon Prime, discussing how these strategies contribute to operational efficiency and competitive advantage. The report further discusses the co-existence of IT in the retail sector and the impact of globalization. Overall, the report offers insights into Amazon's IT infrastructure, its strategies, and their influence on its success in the e-commerce market.

Contents
Introduction........................................................................................................................1
Information Technology and Retail Co-existence..............................................................1
Amazon and its Information Technology.......................................................................2
Amazon Customer Relation Management (CRM) Strategy...........................................3
Amazon Supply Chain Management (SCM) Strategy...................................................4
Amazon’s CRM Limitations............................................................................................5
Amazon’s SCM Limitations............................................................................................6
Conclusion......................................................................................................................7
References.....................................................................................................................7
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Introduction
Information Technology, commonly termed as IT is the use of any devices for the
storage, networking, computing, and infrastructure to create, process and secure back
and forth transfer of all the electric data through any given medium. Over the past
decade this field has taken its lean drastically. All the changes within IT has totally
changed the functionality of the current aspect of the world. Moreover the way business
used to operate handled has been totally revolutionized. The Business aspect and the
technology has coexisted hand-in-hand. One depends on another for their continued
growth. (What is Information Technology? Definition and Examples, 2022)
Taking a look on the current business scenario, Amazon is one of the top dogs of the
market. It is valued at $1.74 trillion as of now. Amazon utilizes specific information
systems in its business cycles to accomplish great advantage by further developing
effectiveness in the social event, stockpiling, and examination of their clients'
information. From the Information Technology perspective, Amazon has utilized mainly
Customer Relationship Management (CRM) and Supply Chain Management (SCM) to
the best of their ability. Here this assessment analyses how the Amazon CRM and SCM
works, their strategy, and how it has impacted the business growth of Amazon over the
course of its implementation.
Information Technology and Retail Co-existence
The globalization of the retailing is the continuous ongoing process. With the increase in
the point-of-sale and point-of-supply, the implementation of the IT in the retail sector has
taken its leap. To stand out in the retail sector one needs to have control over data and
information of the market as well as knowledge of the market and its trends. With the
increasing in the retailing comes with the increasing complexity. But the deployment of
strategic retailing information system has helped retailers to keep their pace.
The effective and efficient management of the retail supply chain the factors everyone
aims for. The factor is one of main criteria for being a competitive. There are numerous
information technology in the retail sector such as Electronic Data Interchange (EDI),
Radio Frequency Identification (RFID), Electronic Point-Of-Sale (POS) and many more.
Information System Technology has made a flood in business and trade throughout the
long term. Various customary systems of activity and thoughts were adjusted due to IT.
There are several advantages of the Information Technology. For the majority of the
worldwide retailers it has aid in effective collection of their respective customer data
whilst further enhancing major differentiation. Furthermore its implementation has
increased retailers’ ability to respond to the evolving marketplace.
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Amazon and its Information Technology
Amazon, founded by Jeff Bezos back in 1995, is one of the biggest e-commerce
platform as of now. Within the growth of last two decades this company is valued to be
at $1.74 trillion. With the initiation of selling books to now selling almost everything that
any users want, this company has come a long way. Amazon primarily focuses on four
major customers, consumers, sellers, enterprises and content creators. This paper will
assess the evaluation of Amazon Information Technology especially Customer Relation
Management (CRM) and SCM (Supply Chain Management).
With the time, the Information system of Amazon has evolved significantly. Back in 1995
it was running on Digital Alpha Servers. But the whole system was renovated in 2000 at
the cost of $200 million. Furthermore Amazon has developed two game changing
systems, Amazon Web Service (AWS) and Simple Storage Service (SS).
Amazon Web Service (AWS) is the world-wide popular online platform for each retailers
to sell their product and consumers to purchase the necessity. Amazon Web Service is
inclusion of different frameworks with grouped functionalities to help handiness in data
the chiefs and the transport of business estimations. This service is able to have its
strong global domination. The framework is extremely forefront to advance certain
levels of interoperability with a web-engaged contraption for convincing participation
between purchasers, merchants, and Amazon work power. It provides scalable, reliable
web services such as servers, networking, mobile development, storage, email, remote
computing and security. The web association enables clients to make client records and
change their data for extended value in the means of trades.
It is clear that Amazon.com is the system based Service Oriented Architecture (SOA) as
it allows the system to be reusable and interoperable with numerous service interfaces
with further enhances Amazon’s flexibility to new heights. Plus the interactive searching
system on Amazon allows consumers to access millions of items at once. All the supply
chain of Amazon is monitored by automated warehouse. This is all possible with the
help of Supply Chain Management (SCM).
The Customer Relation Management (CRM) constantly takes customer information and
controls the SCM. The every second functionality of CRM is responsible for Amazon’s
reliability, customers’ preference, flexibility and security. With the increase in user
number, there is also chance for fraud. To handle such cases, Amazon has developed
Smart Analysis Search (SAS). This enables to system to detect any unusual process in
the system such as fraud through of responding behavioral patterns.
To manage customers’ database at such scale, Amazon utilizes oracle for Enterprise
Resource Planning (ERP System). This holds the massive database where customers’
ordering process takes place in automated manner. Amazon makes the best use of all
the data to have business esteem from its corresponding Customer Relation
Management (CRM), Supply Chain Management (SCM) and Enterprise Resource
Planning (ERP) system.
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Amazon Customer Relation Management (CRM) Strategy
The Customer Relation Management (CRM) is key index for the management and
synchronization of business communication and information. This helps to analyze and
pin point the targeted customer. Today CRM has become the standard requirement for
any business to perform optimally. Talking about Amazon, they have built their own
CRM, Amazon CRM.
Amazon’s CRM utilizes an assortment of information sources, including past buys and
perusing history. The CRM tackles majority of the consumers query beforehand the
involvement any actual manpower. They need to know what items clients are looking
for, so their promoting messages are designated in the correct heading. Higher changes
implies more income for Amazon. Advancements require weighty preparation - they
can't bear to drive such a large number of potential clients from a deal to keep up with
beneficial edges long haul. Thus, they're quantifiably purposeful about trying different
things with new offers that could rip apart deals from existing advancements or present
more gamble than merits the expected award.
CRM's principle work is to give information of every single client of the organization to
its IT group which would give them an all-encompassing perspective with regards to the
buy propensity for every one of the clients. This data is then given to the workers of the
organization who straightforwardly reach out to clients, similar to outreach group, client
support leaders, advertising group, and so on this would help them foster procedures for
strategically pitching and up-offering organization's items to pertinent clients.
Amazon’s CRM follows numerous strategy. It assures the customers with all the data
necessary and maintains them as well for targeting and profiling. Then the CRM
addresses analytical services to help the oncoming customers’ data and their buying
habit to advocate to them to be part of regular customer. Amazon puts together its CRM
strategy with respect to customer purchase history patterns to figure customer request
more precisely than other competitor can. There are several ways Amazon takes the
best out of CRM. The data collection, their storage, purchase recommendations, and
customer supports are some of major factors.
Amazon priorities all of its users to create a personal account. This will help both the
Amazon CRM as well the users to keep track of searches, purchased items and total
amount spent. Moreover this helps the Amazon system to plan ahead and target their
customer in the future as a marketing mechanism.
As soon as the customer creates their personal account, all the user credentials are
stored on the Amazon database. This includes the users’ details, credit card, search
history and purchase history as well.
Once the CRM has users search history and purchase history, they can recommend
each individual to their likings. Amazon has topped this feature. There’s popular feature
that has huge customer engagement and that is ‘customers who bought this item also
bought'.
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Amazon wants the customers to have conversation and resolve their issue with the
customer representative. In case the customer does not want to talk, they can also get
the support at any time the customer want.
One of the major influencing factor of Amazon’s CRM is the highly intuitive user
interface Amazon has built. The website is accessible by almost every customer without
much hassle. Plus the website itself it interactive for customers. It is quite simple where
every element is placed on ‘easy to find’ place, easy to navigate and understand. The
website is filled with highly quality images with proper description related to the product,
honest ratings and reviews, and well-organized categories.
Amazon Supply Chain Management (SCM) Strategy
The Amazon Supply Chain Management (SCM) is an entire process that Amazon goes
through to deliver a product to its customers. This includes product warehousing, whole
inventory management, item pricing and its delivery, customer relation management
and many other crucial steps. To ensure smooth functionality of the overall system,
Amazon SCM has optimize all of these to the best of their ability. The key factors like
planning, information, source, inventory, production, location, transportation, and returns
of goods are some aspect undertaken into heavy consideration.
Back in 2005, Amazon introduced ground breaking service, Amazon Prime Service.
This was a paid service where each individual who enrolled into the service were
provided the guaranteed of their thousands of ordered good delivery within two-days.
This two-day delivery service helped Amazon to dominate the other competitive retailers
to such extend. Later when the competitors opted similar strategy, Amazon then
introduced one-hour delivery (as of now it is two-hour delivery) with their Amazon Prime
Now Service. Plus Amazon's warehouse are currently beginning to be in nearer
nearness to the fundamental places of the significant urban areas. This ensures that the
time taken for the request to be conveyed to the client is altogether decreased.
The whole SCM operations are controlled and under the supervision of Customer
Relation Management System (CRM). The SCM tend to cut all the redundancies,
process out the existing inventories, and delivery system. One of the integral
functionality of SCM is to maintain a progressive relationship with all of its complex
supplier relationship. One of the main issues that arises from time-to-time is the
shortage of supply or one can say the loss of balance on customer demand side and
supply chain flow. The Amazon SCM oversees all these operations. To ensure there is
perfect balance on demand and supply chain flow has to work on Warehouse
Management System (WMS), and supply transportation management as well. The
satisfaction habitats are likewise super-productive and outfitted with robots. This kind of
robotized gear that works nonstop to pick the items and bundle them animates the
interaction an incredible arrangement.
The ERP system fall under SCM. The ERP is responsible sharing the information within
the company. It also controls the fluctuation of information within the system. The ERP
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strengthen the order fulfilment process taking place. This is all possible due to order
tracking and the reduction of the distribution mistakes done by ERP. Amazon has more
than 112 million Amazon Prime members. To meet the demand and supply chain
Amazon has more than 175 fulfilment operating centers across the globe. These are set
in more than 150 million sq. ft. of space. Other major strategy applied by the Amazon is
Warehousing, Delivery, Technology and Manufacturing.
The third party sellers cover more than 50% of total Amazon’s sales. To make the
market place better for all the sellers, Amazon has introduced their fulfilment services.
This includes Fulfilment By Amazon (FBA) and Fulfilment By Merchants (FBM). If the
Seller has opted for FBA, then all the logistics and customer support will be handled byu
Amazon itself. The main task for seller is just to send all the delivery goods to the
Amazon fulfilment center in bulk. On the other hand if seller has selected FBM then the
seller themselves will be inCharge of all operations including handling and storage
management and fulfilment aspects as well.
Amazon is set to have the good delivered through drones as Amazon Prime Air. The
delivery of the product will be under certain criteria. The packages will be under five
pounds and the distance of delivery will be within 10 miles of the Amazon fulfilments
centers.
Amazon’s CRM Limitations
Amazon has invested heavily on their information system. The existing covers and
operates the overall functionality of the demand and supply chain framework. But
however there are few things the existing system still lacks on. The Amazon CRM does
its best to help the customers. But talking about third party seller, it seems to be little off.
Mainly being the low barrier to one Amazon Consultant.
Anyone interested in joining Amazon definitely needs certain guidance. Here the sellers
being on the top. Any vendor or individual willing to have their hustle going on Amazon
needs to how the functionality of the system beforehand. But it would be great coming
of off an experienced individual. However, there seems to be nothing such as a certified
Amazon seller consultant. Anyone in the field can stand up and be the Amazon
Consultant. This creates unwanted bridge among Amazon officials and the sellers. The
authenticity gets lost in the translation from one individual to another. The lack any
certified experienced Amazon Consultant may be sole hindering factor for different
sellers and vendors to start off in the first place.
Cross Border currency Management is a huge issue for many seller in the system. It
tends to be expensive and not that much profitable for seller when they have to pay
3.5% to 4% to the Amazon as transaction fee. The transaction fee is due to handling the
currency exchange. For any huge scale vendors this may not be that of a big deal but
for almost all low-margin product sellers it is troublesome and even may end up the
business.
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The seller need to be on-point 24/7 if they want high profit margin and to keep the
business going. This means one needs to be attentive all the time and answer to their
customer enquiries 365 days. But for no human this is possible at any limit. Once a
seller misses customer’s enquiry, then the chances of losing that customer is high. This
will definitely have a huge impact on the business. Every customer wants their problem
to be solved within short period. Some may wait for 24 hour but more than that time
frame is a total deal breaker. There must not be any compromising between customer
and the sellers. For such cases seller must make use of automated messaging system.
With automated messaging service there must be integration of some sort of notifying
system that notifies the seller about the customer enquiry all the time no matter where
they are. This will definitely bring the seller and customer to having the deal.
Amazon’s SCM Limitations
The balanced workflow of customer demand and supply chain is the sole determining
factor for the success of the any business. Any slight disruption on this will lead other
competitors to take over. As for Amazon though it is a massive company with hefty
investment but it does have issues on delivering the goods to consumers. The scale of
Amazon globally impacts the performance. To meet large scale customer’s demand and
its order fulfilment process is quite challenging.
Erroneous anticipating of demand normally brings about disappointment among
purchasers. Amazon yearly tends to the interest and supply issues by loading up more
stock to meet the conceivably huge volume of orders during Prime Day and Holiday
season. The peak time like Black Friday, Christmas and any holiday seasons turn out to
be nightmare for Amazon.
There is the issue of deferrals in the time taken for Amazon to log all the stock into their
framework. This thusly creates setbacks for the bundles being prepared to convey. This
kind of postponement affects consumer loyalty which brings about regrettable star
appraisals and surveys. Unexpected deferrals of this sort bring about dealers' capital
being impacted.
The AWS is the biggest cloud computing service, however the Amazon’s technical
infrastructure is overloaded still request coming from all over the world on such prime
day. The technical glitches are something the users still face to this day. The thousands
of users with different request of product, different delivery location, different discount
coupons and affiliate marketing tends to get messy on peak hours.
The Amazon store network gambles additionally incorporate the opportunity of sellers or
vendors item losing all sense of direction in the ocean of items that are managed on an
hourly premise. Amazon remunerates merchants for any things that might get lost,
however they settle on the sum independent of the amount seller spends on it.
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Conclusion
Amazon has been one of leading and revolutionizing companies of the 21st century. The
incorporation of the information system such as Customer Relation Management
System (CRM) and Supply Chain Management (SCM) has been quite fruitful for
Amazon as a business growth.
The Amazon’s CRM is the board methodology is straightforward. It makes simple to
utilize ones site, guarantee the clients get a fair shake, give them motivations to return,
and give the greatest and most productive client assistance one can. On the other hand
Amazon’s SCM has gone the distance and is without a doubt one of the most effective
on the planet. It has overwhelmed the internet business world and provoked different
organizations to step up and give quick conveyance to their clients. Obviously, Amazon
has its own entanglements, however its prosperity far offsets the issues it faces. In the
coming year Amazon will definitely make more investment on its current information
system including CRM, SCM, ERP, AWS, Amazon Prime, Amazon Mobile App,
Amazon Prime Air.
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