Question:
Discuss about the Analyse The Service Management System And Strategy of Amazon.
The following text discusses the service management of the company named Amazon and how the different service model of applies to the company. The objective of the study is given. The focus is given to the ITIL (information technology Infrastructure library) service management process (Zurich, 2017). Five stages of this infrastructure is explained. The part of the system that applies to Amazon are discusses. The different operational activity that applies to the Amazon internet base system is given. Amazon is known as the customer-oriented company and operates on higher margin of profit, though there are, some challenges that they faces are crucial to eliminate. The internal business model operation and other strategies that they have applied are discussed. The more focus is given on the customer service segment and customer relationship management system as the company is famous for their customer oriented tech and management. Based on the analysis the recommendation for improvement in the service strategy is also given (Jurkscheit, 2014).
The primary objective of the study is to analyse the different service management framework and implementation strategy of Amazon. While analysing the different aspects, theories and models of service management implementation the recommendation for the improvement of their different business process in alignment with the needed architecture of planning and implementation of the service management will be given in the report. The secondary objective is to apply the theories and models, which are foundation of any service management department and part of organisation. Aligning the theories will be given much emphasis throughout the project (Zurich, 2017).
Through this study and research the service management implementation and customer relationship management, which is an essential part of service recovery management system, will be thoroughly discussed. The analysis of the internal and external service management system will be discussed which will further help me build the foundation for further study and increase the domain of the knowledge of any reader of the report, including myself.
Since the last two decades, Jeff Bezos found the most popular ecommerce sight that has gain the attention of customers worldwide is Amazon and it in 1995. The virtual platform has changed many times over the decades and known as the largest online store. According to the annual report of the company, they serve four kinds of customer’s consumers, content creators, enterprises, and sellers. The company serves its customers through their official website called Amazon.com. The company operates in the information technology business and therefore the It service process and management system will be discussed in the text (Mohammed & Syed, 2015).
The framework that helps companies developing the IT structure in their company is known as the ITIL (Information technology Infrastructure Library) service strategy. The IT service management system is a five-stage process. The company is known as the most successful implementer of customer oriented relationship Management Company (Al Mourad
Hussain, 2014). The five stages are
This part goes as designing the strategy that involves portfolio management, financial management, defining the market and preparing for execution (Al Mourad & Hussain, 2014).
Capacity and availability management and service catalogue management and supplier management comes under this service design process.
Asset management, planning, support, also the validation, and testing of the process and release and deployment and change as well as knowledge management, these are the part of the process of this phase
Problem management and request fulfilments, incidents and access management of the company is known as the service operation process
This part of the phase gives emphasis in improvement of the strategy by reporting and measuring the plans and strategies that have been implemented for continuation of the service improvement (Jurkscheit, 2014).
Information system
The company is totally orientated around the information system that they have to give more of their concentration in improving with the trend and demand of their customers. The first of the suppliers are Digital Alpha services. Then again, the company renovated their system analysis software that included “Epiphany”, logistics system from “manugistics” and new DBMS from oracle.
For communication with the suppliers, Amazon dealt with Excelon for business-to-business integration system. In addition, Amazon Web Services have been developed for simple storage services for systems developed by Amazon. This service is enabled by the company to store products and data of huge number of customers. In addition, it includes the Customer relationship management system that includes data mining, wish lists and searching through the customer’s information, which is fast, reliable and secured at every moment (Beloglazove et al., 2012).
To track the fraudsters the company they have a technology called Smart Analysis Search(SAS). This reduces the system’s malwares and chance of trapping the fraud, by analyzing behavioral pattern, so that the customers as well as the system is secured from further disadvantages of online threats(Klaus, 2013).
The company has enabled Service Oriented Architecture (SOA). Thus it has mainly distributed and decentralized the platform of the website and applications. The information system thus is scalable and robust. The SOA concentrate in integrating multiple applications rather than focusing on handling bigger process control.
This system comes under the service process or operational activities that the company operates in. Every customer has a different profile in Amazon. The system lets the customers to personalizing their profile and web tools to help them shopping.
The one click purchase system, card transactions, and email communication, direct shipping of products functions operates very efficiently and with one click system. No need to fulfill the order forms every time one makes a purchase. The server is enabled to provide information about their registration required from previous customers (Klaus, 2013)..
Secured transaction system is provided for the customers and debit and credit card information is encrypted while performing the requirement of purchase. The security in the internet is information system is incorporated for further improvement. Based on linking the data among the search and search engine as well as the information from search tools are gathered and mined for their clear and thorough recommendation system. The searches of the customers and queries are patterned and tracked along their plan of enhancing the searching experience and interactive platform are optimized for maximum customer satisfaction (Salovaara, 2015).
Amazon uses the interactive searching option that enables the systems to connect to the customers desired items from the catalogue, gaining information from the search tools (Klaus, 2013).
Amazon uses the ERP of Oracle for the resources that they need from different resources. The automated service of taking order and connecting the need to the nearest distribution center of the delivery is also a part of their enterprise resource system. This system fastens the order taking and fulfillment process by the tracking the order and eliminates any mistakes due to distributional deficiency (Lucio-Nieto et al., 2012).
Customer selection and customer acquisition strategies of Amazon are done by creating database store of the customer’s account. Wish lists and review systems that are based on the favorite chosen items by customers. This also helps in direct marketing as they have acquired the 3 million customers in 3 months because of their review systems. Customer retention strategy is also the impeccable of the company as results shows that 40% of their listed customers are frequent customer of Amazon (Grönroos et al. 2013). The market place has become competitive in the field in the last years and therefore, the competitive environment have pushed them to extent their customers base.
The company operates in a business model that has high pressure and extreme load. The rapidly evolving business models also poses challenges for the company. The trends in industry segment and internet usage pattern are also ever changing which poses risk for the company. Though the company operates on high margin, offering the lowest price to their customers can have negative influence in their bottom line (Lucio-Nieto et al., 2012). The revenue that they operate on is much more dependent upon the cloud service that they give others. The main concern of them is to operate on higher margin rather than losing the medium class customer base of their organisation. Maintaining the supplier’s relationship is also very important though dominating their suppliers has been regarded as a grave issue for Amazon being the global leader in ecommerce business (Salovaara, 2015).
The growth and development of Amazon prime in international market has been challenging in the initial years. Flip kart, which has been developed by the two of the ex Amazon employees has ripped the company from its chances of first mover advantage of entering India. Amazon’s 40% of the revenue from its global market sales, which is Germany, Japan, the UK and other significant geographical area. Snapdeal, eBay, Jabong are main competitors of them in India (Grönroos et al. 2013). In China, the other competitor is Alibaba, which is better established than eBay and Amazon. The biggest initial public offering was given over in China and the market share of the company failed due to their strong presence. Many global and giant retailers are coming online with their own products as well as their optimised websites , which is also challenging for the company to handle as they will have certainly some advantage in terms of following through their customers retention strategy by giving good customer loyalty programs (Osborne et al., 2013).
The exchange rate risk is always there, which threatens the company and the customer preference in purchase decision of different products. The push strategy in increasing their sale works for them by using the search data and analysing the data by mining. Though the evolving nature of market is always, there Amazon’s adaptive technology is efficient enough to identify the market trend and predicting the behavioural pattern of their purchase decision.
From the above discussions and analysis, the following strategies to improve their internal and external services can be suggested for Amazon.
Competing the in this field has become challenging as the Capital Investment in developing this sector’s business is less. Therefore, the competitors are investing a large amount in these sectors. The competitors also include the retail shops of global market. So more and consistent investment in business is required to remain in the future competition (Badinelli et al., 2012).
Conclusions
Therefore, from the above discussion and analysis of the service management system it can be concluded that Amazon is in a position of Global leader in ecommerce field. The most important part of their service management system is the customer relationship management. The ERP and supply chain and logistics management that they use are efficiently optimised. The different operational activity that applies to the Amazon internet base system is given. The external and internal challenges that they faces are discussed in the above text too. The recommendation for further improvement in their service strategy is also given in the above discussion.
References
Al Mourad, M. B., & Hussain, M. (2014). The impact of cloud computing on ITIL service strategy processes. International Journal of Computer and Communication Engineering, 3(5), 367.
Badinelli, R., Barile, S., Ng, I., Polese, F., Saviano, M., & Di Nauta, P. (2012). Viable service systems and decision making in service management. Journal of Service Management, 23(4), 498-526.
Beloglazov, A., Abawajy, J., & Buyya, R. (2012). Energy-aware resource allocation heuristics for efficient management of data centers for cloud computing. Future generation computer systems, 28(5), 755-768.
Buytaert, W., Zulkafli, Z., Grainger, S., Acosta, L., Alemie, T. C., Bastiaensen, J., … & Foggin, M. (2014). Citizen science in hydrology and water resources: opportunities for knowledge generation, ecosystem service management, and sustainable development. Frontiers in Earth Science, 2, 26.
Grönroos, C., Edvardsson, B., & Sheth, J. N. (2013). Service management. SAGE Publications.
Iden, J., & Eikebrokk, T. R. (2013). Implementing IT Service Management: A systematic literature review. International Journal of Information Management, 33(3), 512-523.
Jurkscheit, J. (2014). An analysis of the success factors in implementing an ITIL-based IT Change and Release Management Application: Based on the IBM Change and Configuration Management Database (CCMDB). Anchor Academic Publishing (aap_verlag).
Klaus, P. (2013). The case of Amazon. com: towards a conceptual framework of online customer service experience (OCSE) using the emerging consensus technique (ECT). Journal of Services Marketing, 27(6), 443-457.
Lucio-Nieto, T., Colomo-Palacios, R., Soto-Acosta, P., Popa, S., & Amescua-Seco, A. (2012). Implementing an IT service information management framework: The case of COTEMAR. International Journal of Information Management, 32(6), 589-594.
Mohammed, F. A., & Syed, A. M. R. (2015). Data Framework Management System.
Munteanu, V. I., Edmonds, A., Bohnert, T. M., & Fortis, T. F. (2014, December). Cloud incident management, challenges, research directions, and architectural approach. In Proceedings of the 2014 IEEE/ACM 7th International Conference on Utility and Cloud Computing (pp. 786-791). IEEE Computer Society.
Osborne, S. P., Radnor, Z., & Nasi, G. (2013). A new theory for public service management? Toward a (public) service-dominant approach. The American Review of Public Administration, 43(2), 135-158.
Salovaara, A. (2015). Developing Service Design & Management Processes Towards ITIL Compliance.
Zurich, L. B. (2017). Service Operations and Management.
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