1803Ict Information Systems | Business Assessment Answers

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).

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:

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.

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.

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).  
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.

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.

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 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.

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 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.

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).  

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). 

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).

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.

Referencing

Awa, H. O., Ojiabo, O. U. & Emecheta, B. C. (2015). Integrating TAM, TPB and TOE frameworks and expanding their characteristic constructs for e-commerce adoption by SMEs. Journal of Science & Technology Policy Management, 6(1), 76-94.

Baihaqi, I. & Sohal, A. S. (2013). The impact of information sharing in supply chains on organizational performance: an empirical study. Production Planning & Control, 24(8-9), 743-758.

Chaffey, D. (2015). Digital business and e-commerce management. UK: Pearson Education Limited.

Chalmers, S.(2018). Amazon unveils next phase of Australian push. Retrieved September 4^th    , 2018 from  https://www.abc.net.au/news/2018-02-27/amazon-rolls-out-next-phase-of-australian-launch/9489078 

Connellan,S. (2017)  . Amazon launches in Australia, and it's about freaking time . Retrieved August 22^nd   , 2018 from https://mashable.com/2017/12/04/amazon-australia-launch/#E0Wn_sTWbSqP 

Ebrahimi, M. & Sadeghi, M. (2013). Quality management and performance: An annotated review. International Journal of Production Research, 51(18), 5625-5643.

Fly, A.Y.(2017). The Role of Management Information Systems in the Effectiveness of Managerial Decision Making in Greater Irbid Municipality. Arabian Journal of Business and Management Review,7(4),1-10.

Gordon, S.A. &Gupte, J.A.( 2016). Review of modern inventory management techniques. Global Journal of Business & Management,1(2),1-22.

Grey B Services (2018). Amazon Business Strategy: Insights Of Its Operation And Investment Plan To Become A Trillion Dollar Corporation.  Retrieved September 4^th    , 2018 from   https://www.greyb.com/amazon-business-strategy/ 

Herbon, A., Levner, E. & Cheng, T. C. E. (2014). Perishable inventory management with dynamic pricing using time–temperature indicators linked to automatic detecting devices. International Journal of Production Economics, 147, 605-613.

Irefin, I. A., Abdul-Azeez, I. A. & Tijani, A. A. (2012). An investigative study of the factors affecting the adoption of information and communication technology in small and medium scale enterprises in Nigeria. Australian Journal of Business and Management Research, 2(2), 1.

Lee, C.Y., Corbitt, B.J. & Kong, W.C.(2018). Stakeholder Relationships and Electronic Commerce Differentiation : A Preliminary Investigation in Singapore and Australia . Retrieved September 4^th    , 2018 from   https://www.pacis-net.org/file/2000/100-114.pdf 

Morufu, O. & Olayimika, A. (2016). Stakeholders Perceptions of the inventory management practices impact on performance of medium scale food industry in Nigeria. International Journal of Advances in Management and Economics,5(2), 116-126.

Ogbo, A. I. & Ukpere, W. I. (2014). The impact of effective inventory control management on organisational performance: A study of 7up bottling company nile mile enugu, nigeria. Mediterranean Journal of Social Sciences, 5(10), 109.

Ozguven, E. E. & Ozbay, K. (2013). A secure and efficient inventory management system for disasters. Transportation research part C: emerging technologies, 29, 171-196.

Raviv, T. & Kolka, O. (2013). Optimal inventory management of a bike-sharing station. IIE Transactions, 45(10), 1077-1093.

Sahari, S., Tinggi, M. & Kadri, N. (2012). Inventory management in Malaysian construction firms: impact on performance. SIU Journal of Management, 2(1), 59-72.

Savrul, M., Incekara, A. & Sener, S. (2014). The potential of e-commerce for SMEs in a globalizing business environment. Procedia-Social and Behavioral Sciences, 150, 35-45.

Sila, I. (2013). Factors affecting the adoption of B2B e-commerce technologies. Electronic commerce research, 13(2), 199-236.

Slack, N., Brandon-Jones, A. & Johnston, R. (2013). Operations management. Pearson.

Stanger, S. H., Wilding, R., Yates, N. & Cotton, S. (2012). What drives perishable inventory management performance? Lessons learnt from the UK blood supply chain. Supply Chain Management: An International Journal, 17(2), 107-123.

Uthayakumar, R. & Priyan, S. (2013). Pharmaceutical supply chain and inventory management strategies: Optimization for a pharmaceutical company and a hospital. Operations Research for Health Care, 2(3), 52-64.

Wild, T. (2017). Best practice in inventory management. NY: Routledge.

Yu, Y., Wang, X., Zhong, R. Y. & Huang, G. Q. (2016). E-commerce logistics in supply chain management: Practice perspective. Procedia Cirp, 52, 179-185.