Service Management Analysis of Amazon

This report analyzes the service management system and strategy of Amazon, focusing on ITIL processes. It discusses the company's operational activities, challenges, and recommendations for improvement in their service strategy.

Running head: SERVICE MANAGEMENT
Service Management
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Executive summary
The purpose of this report is to discuss and analyse the service management system and strategy
that are incorporated in the global leader in ecommerce namely Amazon. The objective of the
study is given. The focus is given to the ITIL (information technology Infrastructure library)
service management process. Five stages of this infrastructure is explained. The part of the
system that applies to Amazon are discusses. The different operational activity that applies to the
Amazon internet base system is given. The external and internal challenges that they faces are
discussed in the above text too. The recommendation for further improvement in their service
strategy is also given in the above discussion.

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Table of Contents
Introduction......................................................................................................................................3
Objective of the study......................................................................................................................3
Scope of the study............................................................................................................................4
Background of the company............................................................................................................4
Key findings and issues...................................................................................................................4
IT service management strategy used by the Amazon....................................................................6
Information system......................................................................................................................6
Suppliers and communication system.........................................................................................6
Transaction processing system....................................................................................................7
Information security system........................................................................................................7
Interactive searching system........................................................................................................8
ERP system..................................................................................................................................8
Customer relationship management............................................................................................8
Internal challenges...........................................................................................................................9
External challenges..........................................................................................................................9
Challenges they face as customers’ behaviour and demands change........................................10
Recommendations to improve on the Service Strategy.................................................................10
Conclusions....................................................................................................................................11
Reference.......................................................................................................................................12

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Introduction
The following text discusses the service management of the company named Amazon
and how the different service model of applies to the company. The objective of the study is
given. The focus is given to the ITIL (information technology Infrastructure library) service
management process (Zurich, 2017). Five stages of this infrastructure is explained. The part of
the system that applies to Amazon are discusses. The different operational activity that applies to
the Amazon internet base system is given. Amazon is known as the customer-oriented company
and operates on higher margin of profit, though there are, some challenges that they faces are
crucial to eliminate. The internal business model operation and other strategies that they have
applied are discussed. The more focus is given on the customer service segment and customer
relationship management system as the company is famous for their customer oriented tech and
management. Based on the analysis the recommendation for improvement in the service strategy
is also given (Jurkscheit, 2014).
Objective of the study
The primary objective of the study is to analyse the different service management
framework and implementation strategy of Amazon. While analysing the different aspects,
theories and models of service management implementation the recommendation for the
improvement of their different business process in alignment with the needed architecture of
planning and implementation of the service management will be given in the report. The
secondary objective is to apply the theories and models, which are foundation of any service

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management department and part of organisation. Aligning the theories will be given much
emphasis throughout the project (Zurich, 2017).
Scope of the study
Through this study and research the service management implementation and customer
relationship management, which is an essential part of service recovery management system, will
be thoroughly discussed. The analysis of the internal and external service management system
will be discussed which will further help me build the foundation for further study and increase
the domain of the knowledge of any reader of the report, including myself.
Background of the company
Since the last two decades, Jeff Bezos found the most popular ecommerce sight that has
gain the attention of customers worldwide is Amazon and it in 1995. The virtual platform has
changed many times over the decades and known as the largest online store. According to the
annual report of the company, they serve four kinds of customer’s consumers, content creators,
enterprises, and sellers. The company serves its customers through their official website called
Amazon.com. The company operates in the information technology business and therefore the It
service process and management system will be discussed in the text (Mohammed & Syed,
2015).
Key findings and issues
The framework that helps companies developing the IT structure in their company is
known as the ITIL (Information technology Infrastructure Library) service strategy. The IT

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service management system is a five-stage process. The company is known as the most
successful implementer of customer oriented relationship Management Company (Al Mourad
Hussain, 2014). The five stages are
 Demand management
This part goes as designing the strategy that involves portfolio management, financial
management, defining the market and preparing for execution (Al Mourad & Hussain, 2014).
 Information security management
Capacity and availability management and service catalogue management and supplier
management comes under this service design process.
 Service asset and configuration management
Asset management, planning, support, also the validation, and testing of the process and release
and deployment and change as well as knowledge management, these are the part of the process
of this phase
 Common service operation activities
Problem management and request fulfilments, incidents and access management of the company
is known as the service operation process
 Improvement
This part of the phase gives emphasis in improvement of the strategy by reporting and measuring
the plans and strategies that have been implemented for continuation of the service improvement
(Jurkscheit, 2014).

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IT service management strategy used by the Amazon
Information system
The company is totally orientated around the information system that they have to give
more of their concentration in improving with the trend and demand of their customers. The first
of the suppliers are Digital Alpha services. Then again, the company renovated their system
analysis software that included “Epiphany”, logistics system from “manugistics” and new DBMS
from oracle.
Suppliers and communication system
For communication with the suppliers, Amazon dealt with Excelon for business-to-
business integration system. In addition, Amazon Web Services have been developed for simple
storage services for systems developed by Amazon. This service is enabled by the company to
store products and data of huge number of customers. In addition, it includes the Customer
relationship management system that includes data mining, wish lists and searching through the
customer’s information, which is fast, reliable and secured at every moment (Beloglazove et al.,
2012).
To track the fraudsters the company they have a technology called Smart Analysis
Search(SAS). This reduces the system’s malwares and chance of trapping the fraud, by analyzing
behavioral pattern, so that the customers as well as the system is secured from further
disadvantages of online threats(Klaus, 2013).
The company has enabled Service Oriented Architecture (SOA). Thus it has mainly
distributed and decentralized the platform of the website and applications. The information

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system thus is scalable and robust. The SOA concentrate in integrating multiple applications
rather than focusing on handling bigger process control.
Transaction processing system
This system comes under the service process or operational activities that the company
operates in. Every customer has a different profile in Amazon. The system lets the customers to
personalizing their profile and web tools to help them shopping.
The one click purchase system, card transactions, and email communication, direct
shipping of products functions operates very efficiently and with one click system. No need to
fulfill the order forms every time one makes a purchase. The server is enabled to provide
information about their registration required from previous customers (Klaus, 2013).
.
Information security system
Secured transaction system is provided for the customers and debit and credit card
information is encrypted while performing the requirement of purchase. The security in the
internet is information system is incorporated for further improvement. Based on linking the data
among the search and search engine as well as the information from search tools are gathered
and mined for their clear and thorough recommendation system. The searches of the customers
and queries are patterned and tracked along their plan of enhancing the searching experience and
interactive platform are optimized for maximum customer satisfaction (Salovaara, 2015).

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Interactive searching system
Amazon uses the interactive searching option that enables the systems to connect to the
customers desired items from the catalogue, gaining information from the search tools (Klaus,
2013).
ERP system
Amazon uses the ERP of Oracle for the resources that they need from different resources.
The automated service of taking order and connecting the need to the nearest distribution center
of the delivery is also a part of their enterprise resource system. This system fastens the order
taking and fulfillment process by the tracking the order and eliminates any mistakes due to
distributional deficiency (Lucio-Nieto et al., 2012).
Customer relationship management
Customer selection and customer acquisition strategies of Amazon are done by creating
database store of the customer’s account. Wish lists and review systems that are based on the
favorite chosen items by customers. This also helps in direct marketing as they have acquired the
3 million customers in 3 months because of their review systems. Customer retention strategy is
also the impeccable of the company as results shows that 40% of their listed customers are
frequent customer of Amazon (Grönroos et al. 2013). The market place has become competitive
in the field in the last years and therefore, the competitive environment have pushed them to
extent their customers base.

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Internal challenges
The company operates in a business model that has high pressure and extreme load. The
rapidly evolving business models also poses challenges for the company. The trends in industry
segment and internet usage pattern are also ever changing which poses risk for the company.
Though the company operates on high margin, offering the lowest price to their customers can
have negative influence in their bottom line (Lucio-Nieto et al., 2012). The revenue that they
operate on is much more dependent upon the cloud service that they give others. The main
concern of them is to operate on higher margin rather than losing the medium class customer
base of their organisation. Maintaining the supplier’s relationship is also very important though
dominating their suppliers has been regarded as a grave issue for Amazon being the global leader
in ecommerce business (Salovaara, 2015).
External challenges
The growth and development of Amazon prime in international market has been
challenging in the initial years. Flip kart, which has been developed by the two of the ex Amazon
employees has ripped the company from its chances of first mover advantage of entering India.
Amazon’s 40% of the revenue from its global market sales, which is Germany, Japan, the UK
and other significant geographical area. Snapdeal, eBay, Jabong are main competitors of them in
India (Grönroos et al. 2013). In China, the other competitor is Alibaba, which is better
established than eBay and Amazon. The biggest initial public offering was given over in China
and the market share of the company failed due to their strong presence. Many global and giant
retailers are coming online with their own products as well as their optimised websites , which is
also challenging for the company to handle as they will have certainly some advantage in terms

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of following through their customers retention strategy by giving good customer loyalty
programs (Osborne et al., 2013).
Challenges they face as customers’ behaviour and demands change
The exchange rate risk is always there, which threatens the company and the customer
preference in purchase decision of different products. The push strategy in increasing their sale
works for them by using the search data and analysing the data by mining. Though the evolving
nature of market is always, there Amazon’s adaptive technology is efficient enough to identify
the market trend and predicting the behavioural pattern of their purchase decision.
Recommendations to improve on the Service Strategy
From the above discussions and analysis, the following strategies to improve their
internal and external services can be suggested for Amazon.
Competing the in this field has become challenging as the Capital Investment in
developing this sector’s business is less. Therefore, the competitors are investing a large amount
in these sectors. The competitors also include the retail shops of global market. So more and
consistent investment in business is required to remain in the future competition (Badinelli et al.,
2012).
 Not only developing the products of their own but also the innovation of better service
management and more smooth communication must be implemented in their operation
system. The transition of the storage service of the companies from DBMS to clouds
must be used (Iden & Eikebrokk, 2013)

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 More research and development in identifying the behavioural pattern of their customers
and gathering web tools must be used to enrich their customer service and relationship
management.
 Global expansion of the in significant strategic places where supply chain and logistics
management activities will be rather effective as well as efficient in purpose of meeting
the demand and also the capacity of Amazon will maximise their margin. The
procurement from the suppliers and in global context is a huge step but Amazon has
advantage of having all the right resource to source from (Buytaert et al., 2014).
 Drone delivery system and integration of adaptive technologies must also be suggested to
be incorporated to the company.
Conclusions
Therefore, from the above discussion and analysis of the service management system it
can be concluded that Amazon is in a position of Global leader in ecommerce field. The most
important part of their service management system is the customer relationship management.
The ERP and supply chain and logistics management that they use are efficiently optimised. The
different operational activity that applies to the Amazon internet base system is given. The
external and internal challenges that they faces are discussed in the above text too. The
recommendation for further improvement in their service strategy is also given in the above
discussion.

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Reference
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strategy processes. International Journal of Computer and Communication
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