Enterprise Information Systems Year 1
Enterprise Information Systems
Year 1 (2018/19), Semester 1
SCHOOL OF INFOCOMM TECHNOLOGY
Diploma in FI /IT
Deadline: Softcopy 25 Jul 2018 (Wed)
2359 hrsHardcopy 26 Jul 2018 (Thur)
1700 hrsTutor : Alice Hartono
Tutorial Group :T07
Team Number :Team
Grade :Team Members
Student No. Student Name Grade
S10182674H Goh Kim Yong S101870531B Ang Soon Li S10169704G Loh Yong Tat S10185645 Wei JieS10177954C Elfa Humairah Bte Yahya
Table of Contents
TOC o “1-3” h z u 1.Introduction to Company: Amazon PAGEREF _Toc520322461 h 21.2 Target Audience PAGEREF _Toc520322462 h 21.3 Main Competitors? PAGEREF _Toc520322463 h 21.4 Estimated Turnover and Market Share PAGEREF _Toc520322464 h 22.Two information systems that can be used to benefit the organization PAGEREF _Toc520322465 h 3Ang Soon Li PAGEREF _Toc520322466 h 4Initiative – Create Products / Services PAGEREF _Toc520322467 h 4Information System for initiative PAGEREF _Toc520322468 h 6Sales Order and Marketing as Major Business Process PAGEREF _Toc520322469 h 8Activity Diagram PAGEREF _Toc520322470 h 10References PAGEREF _Toc520322471 h 12Wei Jie PAGEREF _Toc520322472 h 13Initiative – Reduce Costs PAGEREF _Toc520322473 h 13Information System for initiative PAGEREF _Toc520322474 h 15Shipping and Order fulfilment as Business Process PAGEREF _Toc520322475 h 18Activity Diagram PAGEREF _Toc520322476 h 22References PAGEREF _Toc520322477 h 23Loh Yong Tat PAGEREF _Toc520322478 h 24Initiative – Enhance Services and Products PAGEREF _Toc520322479 h 24Information System for Initiative PAGEREF _Toc520322480 h 27Receiving as major business process PAGEREF _Toc520322481 h 28Activity Diagram PAGEREF _Toc520322482 h 31Kim Yong PAGEREF _Toc520322483 h 33Initiative: Establish Alliance for competitive advantage PAGEREF _Toc520322484 h 33Information System that help Establish Alliances PAGEREF _Toc520322485 h 37Business Process: Managing customer complaint PAGEREF _Toc520322486 h 39Activity Diagram – Managing Customer Complaint PAGEREF _Toc520322487 h 41References PAGEREF _Toc520322488 h 45
Introduction to Company: AmazonAmazon started out to be a simple online electronic commerce company, but slowly expanded Its product range and services to gain a larger customer base and also to gain foothold in the market share. They sell everything that a person may need, ranging from everyday household items to something that a person would never need like a pair of two live Madagascar hissing cockroaches. Over time, they start to develop their own products such as the kindle, Amazon Echo and services such as Amazon Prime and Prime Video. Amazon Echo is a smart home speaker developed by Amazon to compete with other competing products by other companies such as Google Home in the smart home speaker industry. Amazon Prime was created under Amazon to provide its customers with a membership that provides extra benefits such as Free Two-day shipping, Free Same-day delivery, Free 2-hour delivery on thousands of items and more product shipping benefits. It also provides video streaming or music services, such as Prime Video, Prime Music, Amazon Music Unlimited, Twitch Prime and Amazon Channels.
CITATION Wik l 18441 (Wikipedia, n.d.)1.2 Target AudienceAmazon’s online store offers an almost limitless amount of products and as such, every person can find what they need or want on Amazon, it is also a world-wide ecommerce, online shoppers may come from all over the world, at any age, gender, needs and wants. Amazon is connected with tons of clients to have the ability to increase their efficiency to attract many types of online shoppers which could be a gamer, housewives, bidder, and so on, to have the higher rate of successfully making their customers take this world-wide ecommerce as their one-stop area, to get whatever they need and want at a cheaper price, and more cheaper in bidding. Amazon bidder normally bid unique art piece e.g. art pieces made by famous artist or expensive items such as electronic devices e.g. Mobile, Computer, and so on.
1.3 Main CompetitorsIn the media industry, Amazon’s competitors are eBay (auction site), Netflix, Time Warner Cable, Apple’s iTunes, Google play store, and Liberty Interactive(media producer). In the electronics and general merchandise industry, Amazon’s competitors are Newegg, brick and mortar retailers such as Best Buy Family Dollar, Walmart, Sears, Target, Systemacs, Delia, Staples, RadioShack and Big Lots. For e-business in this industry, Amazon’s competitors are Alibaba, Overstock, Wayfair Inc., PCM inc, LightInTheBox Holding Company, Vipshop and Zulily. Amazon also competes with some of the world’s largest companies such as Oracle, Accenture and Citrix Systems, PC Connection, Insight Enterprises and CDW.
CITATION Tro18 l 18441 (Segal, 2018)1.4 Estimated Turnover and Market ShareAmazon is the top e-retailer in the US, with net sales revenue of US$178billion. It owns about 43.5% of all e-commerce sales in 2017, an increase from 38.1% from 2016. This is a large advantage from its competitor, eBay with a share of 6.8% in 2017, a drop from 7.8% in 2016. It has seen a rise in sales of almost 18% in 2017. In that year, Amazon received more than 180 million unique customers. These customers spent an average of at least five hours per month onsite, spread across 30 monthly sessions. This means that customers may be using the site on a daily basis. This reflects on how often the site generates revenue for Amazon. Since Amazon is huge company, with more than one channels of revenue, site statistics is important as it shows the direct correlation between the increase in sales, and the influx of traffic on their websites.
CITATION sta l 18441 (statista, n.d.)
CITATION Con17 l 18441 (Connie Hwong, 2017) CITATION Ran17 l 18441 (Molla, 2017)Two information systems that can be used to benefit the organization2.1 Enterprise Resource Planning
In a business, there would be multiple business processes going on that needs to be managed. Business processes such as storing inventory information, product planning, configuring prices and many more were managed individually by different information systems. However, the issue is that there’s no centralization and it could be quite tedious for the manager to check one system after another for information on its business activities. That is why ERP (Enterprise Resource Planning) is needed. Enterprise Resource Planning operates as an independent software which consists of many different business processes that can be operated and managed. Amazon uses ERP to ensure that there are always stocks in its warehouse. The usage of ERP helps Amazon to plan for future sales by predicting sales patterns. This would ensure that Amazon produces right amount of stock without overstocking. This would help Amazon manage their cost of goods sold, thus maximising profit.
2.1.1 System Centralization
Using ERP benefits Amazon with system centralization. Every business process such as Human Resources, Accounting, Finance and so on are managed under one system/software installed on a system so that managers or supervisors don’t have to check more than one system and they would be able to understand the whole picture at any point of time.
2.1.2 Accuracy of Data
Using ERP benefits Amazon with accuracy of data. Information is accurately gathered, stored and manipulated in real time under a secured database so that it can be retrieved and read by the employees. The data stored will also not be lost so easily.
2.1.3 Increased Efficiency
Using ERP benefits Amazon with increased efficiency. All the business processes are integrated under one central database, which allows businesses to improve their processes, cut down wasted un-profitable areas as well as reduce operational costs.
Customer Relationship Management
Besides just selling things to customers, the organization would like to know more about the customers’ experiences that they had after purchasing the products through Amazon Prime. With CRM, it allows the organization to know the customers’ personal information as well as receive feedback on their experiences which could let the organization know which areas to improve on. CRM system works by collecting information from customers’ so that the system or the manager knows what the weaknesses in those areas are and implement strategies to help its business reach out to higher profits.CRM allows Amazon to know exactly what a customer wants. This can enable Amazon to do targeted marketing strategy. With targeted marketing strategy, Amazon can reduce its marketing costs. This is done with customer profiling to find out the customers preference per region. Targeted marketing is more efficient as its targets the consumer needs per region, as opposed to a more general marketing that may not cater to the customer needs. Thus, targeted marketing is more cost-efficient and would help Amazon maximise profit in the long run.
Ang Soon LiInitiative – Create Products / ServicesAmazon is so successful today is because of how innovative and progressive the company is, along with its business practices. Apart from being a large e-commerce retail company, Amazon has created many new lines of products and services under many different categories. Under the clothing, shoes ; jewellery section, Amazon has made many different lines of products and services to suit many different individual’s needs, which is why Amazon has gained such a large following and customer base.
EXAMPLE OF INNOVATED PRODUCTS
206 Collective, 7Goals, A for Awesome, Amazon Essentials, Arabella, Buttoned Down, Cable Stitch, Camp Moonlight, Clifton Heritage, Coastal Blue, Comfort Denim Outfitters, Core 10,Crafted Collar, Daily Ritual, Denim Bloom, Emma Riley, Essentialist, Good Brief, Goodsport, Goodthreads, Hale Denim, Haven Outerwear, Hayden Rose, Indigo Society, Isle Bay Linens, Kid Nation, Kold Feet, Lark & Ro, Leather Architect, Lily Parker, Madeline Kelly, Madison Denim, Mae, Mariella Bella, Mint Lilac, Moon and Back, Ocean Blues, Painted Heart, Paris Sunday, Peak Velocity, Plumberry, Quality Durables Co., Rebel Canyon, Rugged Mile Denim, Savoir Faire, Scout + Ro, Signature Society, Smitten, Social Graces, SomethingForEveryone, Spotted Zebra, Stocking Fox, Suite Alice, The Fix, The Lovely Tote Co., The Luna Coalition, The Plus Project ,The Slumber Project, TheCambridgeCollection, Trailside Supply Co., True Angel, Ugly Fair Isle, Velvet Rope, Wild Meadow and Wood Paper Company. Under the groceries or foods section, there are products lines such as Happy Belly and Wickedly Prime. Under Health & Household section, there are Amazon Elements, Mama Bear and Presto. Under Home & Kitchen section, there is Pinzon, Rivet and Stone & Beam
LIST OF INNOVATED ELECTRONIC PRODUCTS AND SERVICES
There are other electronic products or services that Amazon provides are Amazon Advertising, Amazon Advertising, Amazon Alexa, Amazon Appstore, AmazonBasics, Amazon Books, Amazon Business, Amazon Dash Button, Amazon Drive, Amazon Echo, Amazon Elements, Amazon Fire OS, Amazon Fire Phone, Amazon Fire Tablet, Amazon Fire TV, AmazonFresh, Amazon Handmade, Amazon Home Services, Amazon Inspire, Amazon Go, Amazon Kindle, Amazon Launchpad, Amazon Locker, Amazon Mechanical Turk, Amazon Music Unlimited, Amazon Prime, Amazon Prime Air, Amazon Prime Music, Amazon Prime Now, Amazon Prime Video, Amazon Prime Video Direct, Amazon Robotics, AmazonSmile, Amazon Storywriter, Amazon Studios, Amazon Tap, Amazon Video Direct, Amazon Vine, Warehouse Deals, Amazon Web Services (AWS), Amazon Wickedly Prime, Amazon WorkDocs, Amazon WorksSpaces, Amazon Your Garage, AbeBooks, Alexa.com, Audible.com, AWS Cloud9, Book Depository, Box Office Mojo, Brilliance Audio, Diapers, Digital Photography Review, Goodreads, IMDb, Junglee, LOVEFiLM, Ring, Souq Twitch Whole Foods Market, Woot, Zappos
By innovating and creating these products, Amazon has gained a foothold in many different markets. It allows them to be an infallible business organisation, not just depending on one business market, therefore if one particular industry or market fails to sustain or stay in trend, Amazon would not suffer much loss in the revenue generated for their company. This also allows them to save costs by reducing shipping costs and have better control over profit margins as when they make their own product to compete with existing products from other manufacturers, they reduce the shipping costs required to ship other manufacturers’ products to their warehouses before shipping it off to customers. Instead, when they make their own products, it is produced at their own locations, therefore shipping costs is reduced. The costs of manufacturing becomes negligible and can be overlooked or ignored as the revenue gained from selling the product covers the costs of manufacturing.
Amazon is willing to try every business idea, products or services that they can innovate, and does so smartly. In normal business organizations, when the company decides to work on a new idea that could be turned into either a product or service, they usually deploy a large group of people to start working on it, if not the whole company. If the idea does not work, they end up wasting a lot of company resources and time. On the other hand, Jeff Bezos, the CEO of Amazon does things way differently. He creates a small team that is small enough to be fed with two pizzas to work and experiment on the new idea. If the idea does not pan out, they drop it, and the company is only marginally affected by it and they do not incur any heavy losses at all. If the idea works out, then the team will slowly expand, and they would get more and more resources to work with. CITATION Lee16 l 18441 (Lee, 2016) This is how the company maximises it’s gains and minimises its losses. One of its most astounding innovation is its self-checkout grocery store called “Amazon Go” in Seattle, where the whole store has no staffs except for security staffs, and there are no checkout counters anywhere at all. The whole idea was that people could just walk out of the store after grabbing what they need and they would be automatically billed. This innovation from Amazon gained tons of media attention and they are also saving money and earning more revenue from not opening a traditional grocery store as they do not need to hire cashiers, or any other staffs required to run the store.
Amazon also tries to push out it’s experimented products out to the market as soon as possible to see how it would fair in the actual market. After they have done so, they take the critical feedback from customers, and based on the feedback received, create a better and more improved version of the product. This is to not waste any time creating something that the users of the product do not want or need and instead focus more of their time on making an improved version of the product with features or usability that the customers actually want so they would actually buy it. CITATION Lee16 l 18441 (Lee, 2016)Information System for initiativeCustomer Relationship Management System
Amazon uses Customer Relationship Management Systems to keep track of customers’ favourite product range and customers’ various interests by storing information about their recent and most frequent product or service searches to find out what is popular amongst most people currently, so Amazon would know what is trending among users and they would find out what can be innovated or created by Amazon to reap the most economic benefits. Customers could also provide their feedback about Amazon’s products or services and the Customer Relationship Management System keeps hold of the data provided by customers, so Amazon can further improve and enhance their products based on the customer’s feedback.
Supply Chain Management System
When Amazon does decide to innovate and produce a product, they need to utilize a Supply Chain Management System to keep track of its suppliers, its inventory stock counts, and a lot more smaller factors or details such as date of arrival of materials that are used for production, date of shipping their manufactured products out to other warehouses and plenty more information such as production costs, deployed headcount to enable employees in various departments make more effective decisions. Supply Chain Management System also helps to track if the inventory of a product runs out. This is vital as Amazon has to ensure that the product is always in stock, as without stocks, there will be no sales.
Business Intelligence System
Business Intelligence Systems helps Amazon glean insights from relationships and trends in raw data collected from other Information Systems through the use of sophisticated statistical models. This helps Amazon to easily identify trends and popularity in certain products or services that are currently already in the market, so they could innovate to create a product of their own that serves the same functionality of the trending products and even enhance it further to gain market share in a thriving and trendy market. Business Intelligence Systems can help Amazon identify buying patterns, niche market segments and root causes of customer defection, to further enhance their products.
Decision Support and Expert Systems
Decision Support Systems and Expert Systems help support managers and executives in heavy knowledge and intensive decision making. Decision Support Systems rely on models and formulae to help guide decisions and find answers to questions. Expert Systems rely on artificial intelligence to provide techniques and to preserve knowledge of human experts to aid in decision making. With Decision Support and Expert Systems, the managers and executive officers of Amazon and its subsidiary companies can use these decision support and expert systems to make the best calculated decisions in a particular situation, for example, decision support and expert systems can aid in decision making such as whether they should start a video streaming service or not, or whether they should invest in building servers to provide video streaming service for a particular region or not.
Geographic Information System
Amazon uses Geographic Information Systems to gather and store various data about particular places or people around the world. For example, when Amazon was making their own web video streaming service known as Amazon Prime Video, they use a Geographic Information System to gather data to see if people living in a particular place usually have high speed internet that is enough to support or allow for video streaming without lagging. They could also use the geographic information system to check if video streaming is popular within an area or not. If video streaming services are popular in the area and the people living in that area has high enough internet speed, then they should consider buying or building servers in that area and start providing video streaming services in that area. If the people living in a particular area has no interest in video streaming services and/or do not have high speed internet to support video streaming, then that particular area might not be a worthy investment for Amazon to start their video streaming services in that area. When shipping the products that they have innovated and manufactured, they use a geographic information system to keep track of the address that the customer wants the products to be shipped to. Amazon also provides a service known as ‘ Track Your Parcel ‘ where a customer can track the delivery speed and location of the parcels that he or she has ordered, so that the customer always knows where his or her ordered products are at, so as to provide extra assurance to customers.
Sales Order and Marketing as Major Business ProcessAmazon is a platform largely known to the public. Amazon has underwent various promotion strategies. They have done many public relation activities, online and traditional advertising through radio, television and print media mostly throughout United States Of America. Amazon allows for other e-retailers to sell their products on its website. By doing this, they generate revenue from selling other companies’ products. Since many companies acknowledge that Amazon is an unbeatable platform to gain widespread attention from customers to their products, most companies would rather save their time and resources and sell their products on Amazon rather than creating their own websites and buy servers to host their websites and also the costs required for advertising to drive potential customers to their websites. Basically raising barriers to market entrants, making the costs of becoming a competitor to Amazon’s website extremely high, therefore the costs of entering the market is the deterring factor of many people becoming a competitor of Amazon and therefore the number of competitor is kept low. This is beneficial for Amazon as the lesser the competitors, the higher the revenue generated for Amazon.
For items that Amazon are selling and have more control over the pricing of, Amazon likes to keep the costs of their products low for their customers, compared to other competing sites or stores. This is because Amazon understands that by keeping their prices low, they actually stand to gain more profit as more people would buy the products from them even at a lower price, so therefore Amazon earns more profit than most other competing online retailers. CITATION Imr14 l 18441 (Imran M. A., 2014)
When a customer does a check-out, Amazon saves the customers’ shipping location to save the customers from the hassle of always needing to enter their shipping location every time the customer wants to purchase something off Amazon. When going through the check-out, the customer can choose which mode of shipping for the product, either pay more for faster shipping or pay as little as possible for shipping, although it would take longer to arrive to the customer’s address. Customers can also choose to switch on Amazon’s ‘1 click ordering’, to save the customer the hassle of needing to check-out every time the customer tries to purchase something. When the customers are choosing to buy books, they can choose to buy the book in different formats, such as Kindle, Hardcover, Paperback, Audible, or even an Audio CD. They even show customers that other people are trying to sell their same used/new books at other prices.
When a customer buys a product, the customer has to choose the delivery option. The information system will check if the customer already stored his or her shipping address in the information system. If there is no shipping address, the customer will be prompted to fill in his shipping address. If there already is a shipping address, the customer will be prompted to either choose his current shipping address or fill in another one. The information system will check if the customer has already stored his or her payment information in the information system. If the customer does not have any payment information currently stored in the information system, the customer will be prompted to enter his or her payment information. If the customer already has his or her payment information stored on the information system, the customer will be prompted to either choose his or her current payment method or fill in a new one. After the customer does so, the sales department would receive a purchase order. The sales department would create a sales order. The staffs in the accounting department would retrieve the billing information of the customer from the information system, and create and send invoice and receive payment from the customer’s method of payment. The sales order would be received by the Warehouse staffs. The warehouse staffs would receive sales order, prepare a packing list, prepare shipment by picking and packing the products, and then send the shipment off. The customer will then receive the product.
Wei JieInitiative – Reduce CostsOne of the main pillars of success for Amazon is ‘offering lower prices’ to consumers. Thus, one major initiative that has or can help Amazon gain a competitive advantage is reducing costs of goods and services and its expenditure on each department such as labour costs, fuel costs and costs to keep its websites active. By reducing costs, customers would become loyal and be locked in as they tend to buy things of the same quality from places that offer very low prices and the loyal or frequent customers from the competitors would defect after hearing that Amazon provides even cheaper prices for the products and goods that they are looking for. Amazon would give a huge sale on its goods and services or give discounts to further entice buyers. This would increase Amazon’s market share by a lot in the long run. Jeff Bezos, CEO of Amazon said that Amazon’s customers are loyal to them right until the second its rivals offers a better price or service than them, thus it is super motivating and competitive for them CITATION Noa17 l 18441 (Robischon, 2017).
However, in order to do so, Amazon would have to lower the amount spent by its company to be able to gain profits. They can do so by hiring lesser people to manufacture, pack, deliver, and keep track of its goods, saving labour costs. It can also change and buy from suppliers that offer raw materials at a cheaper price than its current ones or they could also find other ways to maintain the same quality of website but at a lower price. Amazon has also reduced most of its costs by not setting up many physical stores and only doing e-business. By reducing costs, Amazon was able to increase its dominance in the U.S e-commerce of about 34% in 2016 and about 50% in 2021 (Wahba, 2017). Thus, Amazon would still be able to gain profits and advantage even though its goods and services are cheaper than most of its competitors since more customers would buy from Amazon.
Amazon’s founder Jeff Bezos believed that low margins would attract more customers and could counter any problems that would arise or their rivals’ action while high-profit margins justified its rivals’ investments in research and development and would attract more rivals. Thus, they provide cheaper shipping costs and prices of products. In order to provide the value propositions from customers, Amazon customized hundreds of activities that it performs to satisfy its ideal ‘low price’ and to provide a greater convenience for its customers. After a while, they became unique to Amazon and helped to gain a competitive advantage. After Bezos heard from the Jim Segal, the founder of Costco of how it gained success, Amazon immediately adopted Jim’s idea of building customer loyalty by introducing ‘everyday low prices’ policy. This allowed Amazon to always keep their prices lower than most of their rivals. Amazon was then able to use its size and heavy volumes of sales to pressure their suppliers to get the best possible deals and thus further reducing the prices to consumers CITATION Sha l 18441 (Mohammed, n.d.).
Amazon also reduced the cost of hiring people to deliver the goods to customers and shipping costs by introducing Prime Air, a drone delivery service. The drones would receive the package and automatically receive the package’s destination and send it to the customers in 30 minutes. This would be time and cost efficient as there would not be traffic congestion or accidents or disasters such as landslides or flood and they would not consume any fuel only battery. According to Deutsche Bank, Amazon would have cost-savings of about 80% which is the biggest cost reduction if they used drones and robots installed with automated delivery functions. This would benefit customers in return as Amazon would only charge a $1 delivery fee using drones to deliver within 30 minutes upon receiving order rather than hiring people to deliver which would charge the customers extra $8.99 for delivery on the same day no matter the duration CITATION Eug16 l 18441 (Kim, 2016). Amazon has also set up multiple distributions channels around the US so as to be nearer to customers. These measures would allow shippers and truckers to deliver the goods faster, reducing fuel costs and delivery costs, in turn lowering shipping costs which would appeal to consumers. Amazon sells their products by themselves and does not hire third-parties to promote and sell their products.
Amazon has their own warehouses and do logistics by themselves. This reduces costs as they do not have to pay other companies just to have space to store their products and pay extra when Amazon needs the products back. This would allow the company to reduce their prices even lower than their rivals. Amazon has set up many warehouses in many parts of a country to reduce costs and time for delivery. It has also set up its own delivery arm called Amazon Transportation Services that delivers and offers logistical services to other businesses CITATION Tod17 l 18441 (Today, 2017). This would help to reduce costs as they would not need to pay people to deliver their own products and get buyers (other businesses) to purchase the logistical services to store their products, gaining competitive advantage since they would be very well-known if they have many warehouses and loyal customers.
In the early 2000s, Amazon gave free shipment to customers who placed orders of hundred dollars or more and to their surprise the sales exploded. Amazon later brought down the free delivery offer to items that cost more than $25. Amazon’s FCs helped the company to cut down the losses even though they were offering free shipment as the algorithm could combine orders and shipments. Amazon further went ahead and made free shipment permanent for customers who would be willing to wait a few extra days for their order (Mohammed, n.d.). This benefited Amazon in the long run as according to a report from Epsilon, about 88% of Amazon shoppers said that the promise of free shipping was what compelled them to shop from Amazon (O’Shea, 2018). According to a study by the National Bureau of Economic Research (NBER), in the past decade, Amazon has reduced its shipping costs by roughly 50% while at the same time growing its profit margins between 5% and 14% and that within the same span, a 40% reduction in prices has also occurred, potentially linking the shipping savings to customer cost reductions CITATION Jen17 l 18441 (McKevitt, 2017) . Amazon has also introduced about 40 aircrafts in 2016 to reduce its shipping costs by not relying as much on third-parties shippers CITATION Tod171 l 18441 (Today, 2017). This would thus attract more customers.
Information System for initiativeAmazon’s strategy as the world’s largest online retailer is premised on cheap and fast delivery, regardless of the impact on its bottom line, parlaying its reputation as an efficient and low-cost logistics operator into generating growth and customer loyalty. When it launched Amazon Prime in the United States in February 2005, it changed the e-commerce delivery scene by pledging to deliver customers’ purchases with fast “free” two-day shipping for an annual fee of US$99 (S$134.50) CITATION Tod17 l 18441 (Today, 2017).
Amazon has also reduced most of its costs by not setting up many physical stores and only doing e-business. Amazon’s only physical store is Amazon Go, however even with a store, Amazon also saved labour costs as it has no cashiers and customers can just scan and go. This would appeal to the customers as they would not have to queue for a very long time just to buy the products so they would prefer to shop at Amazon Go instead of other retail outlets like Walmart.
By using information systems, managers of Amazon would be able to know whether its organisation is spending too much on each individual segment such as human resources, shipping costs, raw materials’ costs from suppliers and proceed to make changes accordingly or come up with ways that would allow the company to function the same but now spending lesser as they would be able to reduce the costs of the products and services after it has made a lot of sales and revenues. They can also use Marketing ISs to help analyse the demand for various products to make marketing more effective and identify trends in customer buying patterns and also help management make decisions on how many sales representatives to hire in different areas, how much to spend on advertising campaigns, what prices to set for new products. Customers would also be able to post their reviews of Amazon’s services and products and how cheap and efficient they are and would attract other customers to shop at Amazon. Thus, Amazon would then be able to constantly lower their prices, and other competitors would not be able to compete.
Amazon could use decision support and expert systems(DSS & ES)(DSES) to help support managers and executives of Amazon in knowledge-intensive decision making by relying on models and formulae to help guide decisions and find answers to “What if” questions and using artificial intelligence techniques. This would help drive the initiative as the managers would be able to obtain new innovative and creative solutions to reduce costs of products and services and costs such as fuel and shipping costs and know what prices to set for the shipping fee and goods. The IS would then come up with ways to help the organisation earn profits and beat its competitors in the long run by introducing policies such as ‘Everyday low prices’ and ‘Free shipping’ to customers. This would then cause consumers from its competitors into defecting and buying from Amazon. DSES would use information gathered by the BI systems that get raw data and statistics from other sources or organisations or past records of Amazon and construct a chart and analyse them to come up with measures that best benefit Amazon into gaining competitive advantage. Amazon uses big data to manage its prices to attract more customers and increase profits by an average of 25% annually. The prices are set according to the activities on the website, competitors’ pricing, product availability, item preferences, order history, expected profit margin etc and are changed every 10 minutes as big data is updated in real time CITATION Jen16 l 18441 (Wills, 2016). By looking at how their competitors are attracting more customers to them and making them loyal, the managers would then adopt those methods for their services and products and see what prices they should set to be lower than the rivals.
Amazon could use Business Intelligence systems(BIS) to glean insights from relationships and trends in raw data through the use of sophisticated statistical models. BI systems can be used to discover buying patterns, niche market segments, root causes of customer defection. These would help drive the initiative as Amazon would be able to know how their competitors are thriving and keeping up with their huge impact on online retailers such as Walmart which is Amazon’s biggest rival and use their measures against them such as how low their prices of goods and services are and what are the results of their actions. By analysing the market share and buying patterns, Amazon would be able to come up with ways to attract more customers to buy from them and gain a competitive advantage over their rivals such reducing the costs of their goods as they would know the reasons behind their customers’ actions. They would also know to use automation in their services from statistics from trends of other companies and gauge the expected gain.
Amazon could also use customer-relationship management systems(CRMs) to manage its relationships with customers and constantly keep in touch with the customers by providing efficient communication services using call and service centres and customer analytics. CRMs range from simple customer record maintenance solutions to sophisticated systems for collecting and analysing online transaction data. This would help drive the initiative as Amazon would be able to directly find out from customers on the prices of goods that they are looking for and Amazon would make the changes accordingly to satisfy their customers’ needs to get more sales and the type of cost-reduction solutions that they would like Amazon to adopt that would attract them such as free and efficient deliveries.
Amazon uses Oracle as the Enterprise Resource Planning systems(ERP). It has a huge database which holds information related to the customers such as their location, addresses and particulars. Customers’ ordering processes are automated while the orders are taken and automatically finds the nearest distributing centre for the delivery. This system fastens the order fulfilment process with the order tracking and reduces any distribution mistakes CITATION MDA14 l 18441 (Imran M. A., 2014). This reduces much of fuel costs as the delivery would be very short since the distribution centres and the customers are very near to each other.
Amazon could use supply chain management systems to obtain information to support supply chain management and the processes involved in producing and selling a product or service. They would be able to access vital information such as inventory levels, production costs, deployed headcount to enable employees in various departments to make more effective decisions. This would drive the initiative as managers would be able to find out their products and services costs and make the necessary changes accordingly such as changing to vendors that provide cheaper raw materials so that they can lower the products’ price that would be sold to customers. Amazon would not have to buy products or materials when their warehouses still have a lot of them remaining as they may be expensive and wasted. They would also be able to reduce the production costs if they knew how much they should manufacture.
Amazon could also use geographic information systems (GISs). Those that are making deliveries can access location-based information such as population levels, flood-prone regions, transport routes quickly through GPS satellites and make decisions accordingly. The drivers would then be able to find the fastest and efficient way such as places that have no jam or where the customers are located to deliver the products to the customers, which will save fuel costs and maintenance/repair costs for vehicles and drones.
Shipping and Order fulfilment as Business ProcessOne of the major business process is shipping. Amazon’s entire sales and revenues is due to the time taken to ship the products from its warehouses or distribution centres to the customers. By having efficient and cheap shipping/deliveries, customers would be attracted to it since they would not have to pay or as much for the delivery fee since other retailers can charge much higher. Customers would be locked in if they always receive their goods on time or even earlier, satisfying their needs. Amazon’s standard shipping is customers order -> far away fulfilment centre -> U.S. postal service to customers. For same day delivery, customer order -> new nearby fulfilment centre -> sortation centre -> U.S postal service to customers. For Prime Now, customer order -> city storefront package -> crowdsourced delivery to customers CITATION Eri16 l 18441 (F.Frazier, 2016).
Amazon deliver items directly and on time to the customer, particularly when goods are bought online. For it to be cost-effective, costs must be kept as low as possible. This means planning vehicle routes to avoid back-tracking. This keeps fuel costs down and saves time ensuring that vehicles do not return empty. This is only possible if goods are both delivered and collected. Vehicles that only deliver goods normally operate on a regional or local basis to minimise ’empty journey’ time. Working out the routes for many vehicles, with different loads – some urgent and some not – can be very complicated so computer programs are used by staff skilled in logistics to work out the best routes.
The key functional area is the supply chain and logistics management and the distribution process. The stakeholders that are involved are the warehouses, distribution centre, customers and suppliers.
The customers are the most important things for Amazon. It is through their reviews and payment and orders. Amazon would give their all into improving customer relationship and their loyalty. The customers would inquire about the prices and goods available from Amazon and they would send back a quotation. Customers would then choose their products accordingly, make payments and send the order to Amazon where it would be processed and sent to the warehouse. Upon receiving the packages from Amazon, customers would sign the invoice and provide feedback either to Amazon directly or in a forum or blog.
Amazon’s fulfilment centre/warehouse:
The fulfilment centre stores and stockpiles the inventory when it arrives for a long period of time before shipping out to customers when they buy the items and the inventory would be used up. After Amazon receives the customer order, they will start to calculate the delivery date and inform the customers of the date. If the customers are satisfied with the date, they will proceed to pay.
It begins after customers have paid for their products. Amazon would proceed with the different procedures such as checking, picking, packing and slamming the goods.
After customers have paid for their orders, a computer will immediately create a sales order from the customers’ order and any delivery instructions. The pickers will then find the location address of the products from the sales order and with the help of the IS that shows the quickest way. If the items are not available, the system would inform the suppliers to pack and deliver the products to Amazon.
After finding one product, they will scan the barcodes on the shelf where the item is located and on the item. The picker has to scan both barcodes correctly before the system directs the picker to the next item at a different location.
Once there is no more space in the cart that contains the items, the pickers will transfer the items to a conveyor belt that goes to the packing station to pack the items. The packing station would then separate out the items according to the customers’ orders such as which customer has multiple or single items. For multiple items, they would have to be sorted together for each customer and be packed into one package while single items would immediately be packed.
After it is packed, the packages will be transferred to the SLAM machine, where they are scanned the packages’ barcode, labelled with the items name and its final destination. It also weighs the package to ensure it is the anticipated weight to indicate that the items are correct all in one second. After everything checks out, a picking and packing document would be created and the packages are loaded into trucks to be delivered to the nearest distribution centre from the customers for local shipping and a distribution centre that is nearest to the airport for the international shipping.
CITATION Hun12 l 18441 (Skipworth, 2012)
Distribution centre store products for lesser periods compared to the warehouse. Thus, the flow velocity through the distribution centre is much greater than the flow velocity through a warehouse. It is customer-centric and is the bridge between a supplier and its customers, its role is to efficiently meet customer requirements. The distribution centres are equipped with latest technology for order processing, warehouse management, transportation management.
Upon receiving the shipments from the warehouse, the employees at the centres takes out the packages from the trucks and check the packages for defects and start rearranging them and sort them out in terms of its destination (nearest or farthest) and organise the packages’ destination that are near to each other in one group if there are no defects. This would save the delivery time and fuel costs. They would also check the weight of each package, if the package is 2.3kg and below, it would be delivered via a drone together with the packing and picking document. If it is above 2.3kg, it would be loaded into a truck that would head for the packages destination.
The packages would be sorted according to its country. After sorting, they would create a bill of lading which defines responsibility of goods in transit/process of loading a ship or other vessel with cargo. They would then be packed into an aircraft together with the bill and packing document and would fly to that specific country. Upon reaching, they would have to clear the customs and be sent to the local post office, where the packages would become local shipment, and deliver to the customers.
Suppliers or seller:
If there are not enough items in the warehouse, suppliers would receive an email from Amazon indicating which products that they need and the due date for delivery from supplier to Amazon. The supplier warehouse would undergo the same procedures as the Amazon warehouse and after completing, they would immediately be sent out to Amazon.
Shipping merchant orders(seller)
When companies want to fulfil orders by themselves, they need to ship the products to the customers. Amazon would mail them as soon as their product is picked by the buyer. However, it may happen at times that they may not receive the email instantly and it may take up to 20 minutes to get the complete order information. Amazon informs them what they sold and at what price and the fee that they will be charged. After that, the companies’ duty would be to ship the product to the buyer in time.
They can go to the Manage Order page and print the packing slip, then confirm with Amazon that the shipment has been done successfully. The order page has a complete list of information about the order, such as where it is going, the date and the time of order, the expected shipment date, the expected delivery date, and the shipping method.
Companies can also send a message to the buyer by clicking the buyer’s name if necessary through an anonymous Amazon email address. Both the buyer and the companies would not be able to see each other’s email addresses.
Now the main task is to ship the product. The first way is to print the order packing slip to create a document that contains all the required information that they need to ship the product. After printing, they would tear the shipping address off the top of the document and attach it to the package or another way is to use the shipping services through Amazon by clicking the Buy shipping button. They key in the package weight and size and click on the most appropriate shipping method.
Activity Diagram – Shipping and Order Fulfilment
Loh Yong TatInitiative – Enhance Services and ProductsI think by enhancing the existing service and product is a major initiative to help the organization achieve more competitivity towards other companies, increase value to product as well as maintain brand position. Sometimes, customer would prefer the original feature/functions of the product. But when things get more advance time after time, they enhance their product so to meet customer’s expectations in a fast-growing world. For example, the customer used to purchase and drove the Ferrari F40 (from 1987). He/she loved the vehicle because of it’s amazing and durable engine. But as time goes by, the other competitive cars like Maserati and Lamborghini became popular as well because of the engine hence, initiates Ferrari to make their next move by enhancing their engine so to stay in-par or be better than other car companies. Enhancing the product can benefit the company in some ways such as less resource-intense and cheaper solution rather than creating a new product which could cost more and time consuming to build the whole new thing all over again. As for the services, quality of service is very important to satisfy customer needs/wants and experience. As Amazon is an e-commerce website trying to sell things online and also have some service assistants, can be classified as two types of service which are web service and customer service, which can be enhanced to their fullest potential.
For products, Amazon can set up their own business, selling and making their own products as well as enhancing the service. This way, Amazon not only will focus on third-party sellers, but profits earnt from their own business. After Amazon created their own products, they could enhance the products if needed to. Amazon had launched their own private label brands back in 2008, the first launch was the diaper brand and it was an embarrassment because of it’s design flaws, which I could emphasis on. Since the diaper had some unappealing designs, it could be improved. How? By taking the feedbacks from customer about the design and readdress the issue on it, and that’s when the product would require enhancement (Jason Del Rey, 2018).
Although Amazon itself is already a service provided for users to sell products, Amazon also creates and sells their own services for customers to be able to experience better functions, performance and maybe a different dimension from it. For example, Services such as AWS (Amazon Web Services), Amazon Prime and Kindle Family provide customers an enhanced, interesting kind of experience.
Amazon Web Services
During the olden days, traditional web service was launched before Cloud Computing even came out. The Traditional Web Service was slow and inefficient, users happened to encounter the difficulties such as adjusting website performance which results in power wastage gaps which is inefficient. There are a lot of hardware so there will be more consumption power making it high cost. So Amazon came across this innovative idea, to turn Traditional Web Service into Cloud Computing where most of the things would be virtual with lesser hardware, easier to manage, efficient and effective. Basically, it is an enhanced service from the original Traditional Web Service. The Amazon Web Service is the cloud computing, on the platform it provides all the necessary and useful resources like compute power, remote storage/database and a wide variety of applications that are designed to work together meant for users to be able to create very sophisticated applications.
It is an enhanced version from the ordinary Amazon where the customer/consumer optionally pay for their subscription, will enjoy a range of benefits. Benefits such as, free 1 day or it could be 2 days if the user didn’t follow the required procedures, Prime membership sharing is allowed up to 4 people so not just the buyer will enjoy the benefits as well as the others after they shared, unlimited free contents like photo storage, ad-free music or videos and many more. There are also unique deals which is called the “Lightning Deal” contains discounted price item and they run out pretty fast as there are only a certain amount of quantity.
Customer Service Assistants
Besides selling their own services to customer, Amazon has customer service assistants to provide customers with necessary information, handling complaints or problem-solving tasks regardless whether through hotline or face-to-face communication. Good customer service will help to ensure tasks with minimization of problems, able to handle situation well whether it is tough or easy and establish good connections with customers. But what happens if customer service assistants were not competent enough to handle the task independently? Regardless of their acceptable school qualification, or when they promise you to deliver. In the end didn’t manage to meet up to the expectations of the company. Amazon must ensure that all the customer service assistants are well trained before they start serving customers.
Firstly, spot the weakness of an employee, so that they know what areas they would need to improve on. These are one of the roles managed by the human resources department where they keep track employee’s insights and their performance. There are many ways to analyse their weaknesses, such as ticket backlog, which is an amount of customer support requests which are unresolved. This could be speed of the service which takes longer time to solve or the failure to solve the problem. So if there are services who encountered these kind of problems, we could provide them weekly training courses for those services to enhance their skills such as communication, problem solving or persuasion skills.
Information System for InitiativeInformation system are very strong technologies which could provide useful and necessary information from gathered data or through analytics been performed. Other benefits of using information system is that you can store a huge amount of data in just a single physical machine and the data is manipulated quickly and accurately before displaying the information.
Customer Relationship Management System
Customer is always the first priority in business because they are the most valuable asset to the company. The company have to make sure that they can connect well with the customer and not lose them instead. Customer Relationship Management helps to manage organisation’s relationship with customers. With CRM, it can help to enhance customer service with variety of features and functions to help improve productivity and making business operations as smooth as possible. Tools such as customer loyalty enhancement tool, which updates existing customers with promotions, discounts or sales events. The CRM software automatically helps to perform these functions without the need of manpower which is why it helps in productivity and efficiency to the business.
Human Resource Information System
Besides using CRM, we could also use the HRIS to help enhance the skills of an employee especially customer service associates. The HRIS is a software that provides online training programs to help each individual to enhance in their areas that they are weak. such as communication, persuasion skills and many more. From an un-trained service to a trained service will provide customer from an average experience to an enhanced experience.
Marketing Information System
MIS may or not be much of a help because it doesn’t give you ideas to help make enhanced products, but instead it can alert to the organization when there’s a product failing to make sales. MIS collects and gathers different kinds of data together to be collated, and then creates options of the best decisions. For example, if the marketing information systems tells you that the product sales has became very low as before, and it decides that this product would require enhancement in order to get this product selling back well again and meet sales target again.
Receiving as major business processReceiving is the collection of seller’s products to be further processed and stored in the inventory for sale. Processing customer orders is the fulfilment process whereby it requires associates to find the product, picking and packaging and then shipping it to the destination.
Firstly, it starts with the seller. The seller is the one who sells the product to customers through Amazon. The seller would have to follow several steps before selling their products. The steps such as registering an account, listing your products, choose FBA shipping plan and the preferred carrier to help deliver your products to Amazon. After that, a label has to be attached to the box that’s been packaged. Then the courier will deliver the seller’s package to the nearest fulfilment centres.
Secondly, the fulfilment centre is where the package/products will be kept on hold for sale. The fulfilment centre comprises of the main business functions such as receiving and checking out, (my groupmate, Nah Wei Jie will explain the checking out process) other steps such as picking, packing and slamming is under the checking out business function. The package goes through a set of checks in the receiving process to ensure that it is e-commerce ready before it is put out for sale. In the receiving process, there will have a section which is called the ‘Amazon Problem Solver” where the package will be referred to when there is an issue such as missing components, misinformation or failing to meet the size requirements etc.
The first step process after the package has arrived in the centre, it is sent via the conveyor belt to the receiver section. The associate at first will scan the shipping label for shipping IDs to confirm that the package is at the correct fulfilment centre.
The second step process would be to check the size of the package does not exceed the requirement. If it exceeds, it will be sent to the special handling section for adjustment.
The third step process would be checking each and every units in the package for scannable barcodes. Each unit must have a scannable barcode so that they can automate through the market checkout systems. Without the barcodes would be an inconvenience for the work process. If there are no barcodes, they will be sent to the Amazon Problem Solver.
The fourth step process would be checking inside the package to see if the units are packaged properly so to avoid being damaged beforehand or in transit, also the associate would perform a title verification to ensure if the title and product matches the same.
Now the unit is ready to be routed and stowed to the inventory. A computer system will tell the associate the location for the unit to be stored. When the associate has reach the location, he/she will have to scan the unit into the location inventory. Therefore, the product has been successfully stored in the inventory and has been listed in the market which is in the Amazon webpage.
The stakeholder of this process would be the seller who sells the product, receiver who receives the product and problem solver (helps to solve issues of the product) in the receiving process.
Supply Chain Management
The business function of the major business process (which is the receiving process) is the SCM, which comprises of the many business functions needed to make the flow of goods/service possible which Amazon uses.
Activity DiagramKim YongInitiative: Establish Alliance for competitive advantage
The Purpose of Establish Alliance
Amazon is the world most famous and leading world-wide ecommerce (Pic 1 shows the ranking of world-wide most leading e-commerce) which sells products and services to customer in reasonable price. Customer will have more selection to get whatever they want no matter their age, gender, where they stay as it is world-wide ecommerce, and their different need and wants, which almost whatever you can think of. In order to get this kind of results, they had established more alliances (Pic 2 shows products are sold by different alliances, and Pic 3 Shows Services are sold by different alliances) than their competitor.
In order to compete and show huge differences to their customers, to have a higher rate of being successful to make customer to take this world-wide e-commerce as their one stop area to purchase their needs and wants, Amazon had established alliance with card organization to allow customers to redeem their cards rewards points to purchase an items or services. Which I believe everyone of us would like to enjoy more benefit from purchasing an item.
Pic 1. The ranking of world-wide most leading e-commerce in 2017 CITATION mba l 18441 (mba sKOOL.com, n.d.)
Pic 2. Products sold by different alliances. CITATION ama4 l 18441 (amazon Try Prime, n.d.)
Pic 3. Services sold by different alliances. CITATION ama3 l 18441 (amazon Try Prime, n.d.)
Pic 4. Selected Card for point redemption. CITATION ama2 l 18441 (amazon Try Prime, n.d.)Affiliation
Amazon not only sell products and services, they also welcome blogger, ecommerce and others which related to website to affiliate with them to earn a small commission of up to 10% whenever someone purchase the products or services on their website (Pic 5 shows the procedure of Affiliation with Amazon).
Pic 5. Affiliation with Amazon Procedure CITATION ama1 l 18441 (amazonassociates, n.d.)Different Rate of Commission
Affiliate will earn different rate of commission depends on what the user buy, affiliate may earn one percent of the commission when user had successfully brought Video games. (Pic 6 Shows different commission rate depends on type of purchased items and services).
Pic 6. Different standard fee rates CITATION ama l 18441 (amazonassociates, n.d.)Purpose of Affiliation
Amazon will then have the ability and rights to make use of others affiliation websites to increase their population world-wide as there will be amazon advertisement stick on every affiliation website in which whenever someone is visiting other affiliation website will able to see the Amazon Advertisement in which could be a short video or a banner to become a well-known e-commerce than their competitors.
Information System that help Establish AlliancesBenefit of satisfying customers
It is tremendously important to satisfy customer by getting what they want and need, response their enquiry in a quick response and solve their problem in the fastest way to have more loyalty customer, and to build a strategies way to make customer to take this e-commerce as their one stop area to buy whatever they want.
When customer are satisfying with their orders such as received goods with no damage, delivery process is fast, and received reply in a quick response, they would put a review to say the delivery is fast, it is a trustable dealer, getting reply in a quick response, and so on with 5 stars to make this e-commerce more trustable.
Due to so many greedy customers got scammed by the scammer who sold the products in the cheapest price and state is it a first-hand product by making it to look real to attract customer to purchase their products. Which customer would think it is worth to buy due to so many pros from purchasing the product and at the end got scammed.
Ways of to solve customer worries from getting scammed
Customers review is one of the most useful information for new customer to verify how good is the services and how trustable. As previously someone had brought the product before and making a good comment.
Benefit of Customer Review
The more good review with 4 to 5 stars rating the more would ease the new customer from getting worried to get scammed by the scammer.
When the e-commerce look trustable from having tons of good reviews with high rating of the products and services, it will attract more new customers.
When the e-commerce have a lot of customers, it will have a higher chance that someone want to partnership with the e-commerce to earn money together which also allows the e-commerce to have the advantages to earn a small commission from the alliances for every purchase, so that it will have enough profit to invent or buy an item to sell more products than their competitors and to increase the sizes of their e-commerce.
The need of customer complaint
Amazon is a user-friendly e-commerce website which ease their customer from having the difficulties to use and make an order from their website and therefore it will have fewer customers to make a complaint to Amazon Customer Services to solve their problem but only in a situation such as damaged items, damaged packages, or etc.
Useful of CRM and SCM
In order to have more alliance, Amazon has to solve their customer complaints, in order to solve customers complaints, Amazon has used and invented their own Customer Relationship Management software to meet their own preferences such as storing customer data which include address and country, past purchased items, processing ordered items (on the way to deliver items to customer), and so on. While it also allows customers to view their own past purchased items or on the way items.
CITATION Exp l 18441 (Expert CRM Software, n.d.)Customer Relationship Management will be useful when customer make a call to customer service to make a complain such as why it takes so long to deliver and till now still have not received their ordered items, therefore Amazon customer service associates will make use of Customer Relationship Management to track customer processing purchased items to verify why it takes so long to deliver, is it there is a natural disaster or something which delayed the process from using Supply Chain Management to track the shipping process by making use of customer order ID.
An Idea of storing solved and unsolved
When the problem is not solved, Amazon should store customer data and problem in the unsolved database in Customer Relationship Management System, so that the upper management can view it and make a call back to customers to solve their problem, until the problem is solved. Solved problem will be stored in solved database for future references such as just in case customer make a call back when forget to ask something or still have complaint to made.
CRM with Alliance
While CRM not only help to manage its customers, it also help to manage and get closer with their alliances to meet their requirement and solve their difficulties too such as asking help for customer problem to have a conversation with each other and finds ways to solve problem together.
Benefit of Managing well with Alliance
When managing well with alliance, it will have higher chances to establish new alliances such as when alliances partnership want to establish new alliances and asking for recommendation, they would recommend the best alliances they had.
Having CRM in e-commerce would help to build strong connection with alliances and customers by storing their information for future reference, and to manage their problem until it is solved in which solved problem would store in solved database while unsolved would store in unsolved database.
+ Add On
Last but not least, having more alliances in the e-commerce website will have a stronger strength to compete with their competitor to reach to the top and become a famous e-commerce.
Business Process: Managing customer complaintFunctional Areas: Customer Relationship Management
Customer Service Representative
Customer – Customer (Role)
Customer Relationship Management System – Save Customer Problem Data System (Role)
Supervisor – Supervisor (Role)
Customer Service System – Customer Phone Request Receiver (Role), Customer Phone Request Sender (Role), Customer and Customer Service Representative Connecter (Role)
Customer Service Representative – Customer Complaint Data Recorder (Role)
It start with Customer, customer is the one who are requesting customer service for making a complaint to Amazon Customer Service Associate. Before request customer service, customer would have to do the following step:
Sign in with Email Address and Password
Select type of help such as order
Select type of issues such as Where is my ordered item?
Select type of issues detail such as shipment delay
Select type of contact such as Contact By phone or Chat
(Assume customer select contact by phone)
Enter Phone number
Click Call Me Now
After customer had done the following step, customer service representative will call customer.
Customer Service System
Secondly, Customer Service System, is the system where it request phone call to customer to Customer Service Representative and send customer data with customer problem detail to Customer Service Representative.
Customer Service Representative
Thirdly, Customer Service Representative would have to handle customer problem and record customer problem data with customer data into Customer Relationship Management System not matter the problem is solved or not. It will have to store in solved database when the problem is solved or in unsolved database when the problem has not solved yet.
Customer Relationship Management System
Fourthly, Customer Relationship Management System is the system where customer service representative used to save the record of customer problem data with customer data into database system. The purpose of saving the record is to allow customer service representative to make an reference when customer make a call back such as in case customer forget to make another complaint or forget to asking something, to see who and how other representative solve the problem and when the problem is solved or unsolved.
Normally unsolved problem will be handled by the supervisor.
Lastly, the last resort to handle customer problem, supervisor will have to make use of Customer Relationship Management System to verify unsolved problem and need to be handled by the supervisor which the customer service lower management either not sure how to handle the case or don’t have the right to access the data.
Supervisor would have to make a call back to customer for solving the unsolved problem.
Activity Diagram – Managing Customer ComplaintAssumption – Customer request service through phone call
This activity diagram is mostly base on Amazon Customer Service Procedure
CITATION Ama1 l 18441 (Amazon, n.d.)Elfa Humairah
3. Competitive Advantage – Product Differentiation
One competitive advantage strategy is that Amazon can follow is product differentiation. This is more so to encourage more vendors to use its e-commerce platform to do their trading and business.
3.1 How does it help gain competitive advantage?
Amazon currently has a huge market share in the e-commerce industry. As mentioned, Amazon owns a market share of 43.5%. It also received more than 180 million unique customers. These statistics can be used to market Amazon’s efficacy and competencies as an e-commerce platform.
Amazon can use these facts to portray itself as a desired place to do trading and business. This allows suppliers to be interested in liaising with Amazon so that Amazon can help the vendors to sell their product, thus helping them earn more sales. Amazon can entice suppliers with their large customer base as use it to differentiate itself. It can compare itself with its competitor, eBay which only has 165million unique customers. This puts Amazon as the ideal company to engage with as suppliers can take advantage of their large customer base.
3.1 How does it help Amazon?
This would help improve Amazons business as with more products sold on the platform, more customers would be attracted to use its platform. With more items of varying categories sold on its e-commerce site, Amazon would attract different type of customers, thus further increasing its sales and customer base. It can also charge a small fee to vendors that uses its platform. This would then increase its revenue can in turn, increase market share.
3.1 How to use IS to drive the initiative?
The information system that can be used is the statistical information system, or the SIS. The SIS collects, stores, transforms and distribute statistical information. This means that by using the SIS, Amazon can keep track of its statistical data easily. This allows for fast analysis of reports. This allows Amazon to constantly update its facts used in the marketing of their e-commerce platform.
By using the SIS, Amazon can track its customer based easily. This means that Amazon can have a targeted marketing strategy for different regions. This is to cater to the different needs of the consumers in different regions. By having a targeted marketing strategy, Amazon can incur lower marketing costs and thus, maximize its profit.
The hiring or the employment process is one of the most core processes that a company have. It is required to ensure that the company has enough manpower to run the business without incurring too much expense. Amazon has a interesting way of doing this process. It has its own job portals that applicants can browse through the various job opportunities available.
The process starts by the company advertising their job positions available in the company. The advertisement is provided by human resource (HR) to the media for the public to see. The potential employees can then send in their CV and contact details into the job portal for Amazon. HR would then review all the potential employees. HR might do background checks on the potential candidates and reject those who are unqualified or those who are incompetent to do the jobs based on their CVs and background checks. HR would then contact prospective candidates for an interview. HR would also inform the relevant departments about the interview. When the interview has been scheduled, a representative from HR, the recruiting point of contact would inform the applicant of the interview details. Once all the interviews have been conducted, the department would filter and choose the person they deem fit for the job. HR would contact all the applicants via the recruiting point of contact to inform them on the outcome of the interview. For shortlisted applicant, he would then arrange for the applicant to come to the office to discuss and sign the employment contract. Once the contract has been signed, the candidate have become an employee. HR would then direct the new employee to their department where the manager in charge would brief and orientate the employee about the expectation and culture there.
4.2 Desired Outcome
The desired outcome is that the company can get reliable employee that are competent to do the desired task. The process allows for fairness and transparency in the recruitment process. Every step in this process is documented, and thus, the officers have a record of what happened during the interviews and selection process. This ensures that decisions made are justified and are not biased in any way. The background checks are necessary as HR needs to ensure that the candidates are not lying in their applications and have no misconduct that might affect their performance in the workplace. For example, the candidate might have a black mark from his previous company as he often reports to work late. Thus, he might not be a suitable employee if the company starts work early in the morning. Having at least two people to conduct the interview ensures that there are no biases or favoritism. The discussion of the contracts allows for adherence to policies set by the company and ensures that there are no disputes with regards to salaries and other benefits. It also ensures that both parties are aware of each other expectations. Orienting the employee help them familiarize with the work setting and routine. For example, Amazon has an interesting culture that is different than its competitors and is largely customer-centric. If the employee is not familiar with this culture, he might be uncomfortable and unable to do this best at work.
The applicant plays a simple, yet important role in this process. This process starts when the job seekers apply for the job. For Amazon, the company has an application portal online where job seekers can look and apply for jobs. The seeker can look for jobs in the specific departments he is interested in. After application, the job seeker would be contacted for either a phone or an in-person interview. After the job interview, the candidate would be contacted two days later, regardless of whether he is successful or not. The applicant does not play a major role in this process, as he is not part of the company.
4.3.2 Human Resource Department
The HR department is responsible for liaising with the job seeker and the hiring department. The HR role starts by contacting the applicants that applied for the job for an interview, or a technical test, if the job requires for it. Each applicant will be assigned to one recruiting point of contact. The recruiting point of contact would be the person in charge of informing the applicant of the details of the interview. If the need arises, the recruiting point of contact would also assist the applicant with the travel arrangements by setting up the travel arrangements for the applicant or by putting the applicant in charge with the travel agencies Amazon liaises with. If the applicant needs to stay in the hotel, or travel to the interview location, the reimbursement would be carried out through the recruiting point of contact. They are also the ones that contact the applicant after the interview regarding the outcome of the interview. The recruiting point of contact represents Amazon, and thus, has a vital role in this process.
4.3.3 Department of Hiring
The department of hiring plays a minor, but important role in this process. The department of hiring is responsible of shortlisting the applicant during the first round of elimination. These shortlisted applicants would then be interviewed. The department of hiring chooses the shortlisted applicants based on their qualifications and competencies. If the applicant has the right skills and knowledge for the job, he would then be shortlisted in the interview. During the interview, a representative of the department of hiring would be present to further evaluate the capabilities of the applicants. The role of the department of hiring, albeit minor, is vital to ensure that the staff hired is fully capable of integrating to the company and doing the job well.
Activity Flow Diagram
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