Introduction
As technology is advancing, customers are becoming increasingly tech-savvy. Consequently, the strength of e-commerce industry is increasing at a tremendous rate (Krafft, M., & Mantrala, 2010, p.210).
The impact of technology in helping buyers track their purchases, not to mention their ways of interacting with online retailers cannot be underestimated.
According to Schaeffer (n.d, p.221), with the change in interactions among consumers and sellers, technology is improving customer and seller spheres.
More specifically, technological advancements yield a variety of tools that that are important to customers, which enables them to gauge prices, allocate product alternatives stores and receive coupons.
Lee (2009, p.312) alludes that most studies that assess the influence of technology in modern business emphasize on the role of information technology in e-commerce and e-business.
By definition, e-commerce encompasses selling and buying of products online (Shelly, Campbell & Rivers, 2011, p.424).
The major technologies incorporated in e-commerce are mobile commerce, transfer of funds, marketing, supply chain management and automated systems of data collection.
By contrast, e-business covers online transactions, Internet-based transactions with different partners including customers, suppliers and monitoring and exchanging of information.
The transaction lifecycle of e-business not only involves the sales aspect of an enterprise but also the data exchanges to facilitate financing and payment for business transactions (Rahman, 2014).
Altogether, information technology is revolutionizing the way business is conducted across the world. This essay assesses the importance of IT in the success of Amazon business.
Literature Review
Amazon, a Seattle-based company is one of the global leading online retailers with a variety of offerings seeking to satisfy different categories of consumers (Schneider, 2011, p.46).
The company is popular in using IT systems in self-propulsion to success. The company is popular in selling toys, clothing, electronics, movies, baby wipes television shows, loans and prescription drugs, and books.
The current statistics indicate that out of every dollar spent on online purchases in America, half goes to Amazon. The enterprise utilizes a multifaceted model of operation that is cloud-based which facilitates its consistency in quick delivery of consumer goods internationally.
Despite not revealing its specifics, the enterprise is projected to grow to 2.8 billion dollars in 2018 and 4.6 billion dollars in 2019 according to Motherboard. Vice.com. The rise is significantly high since the company was worth 300 million dollars in 2015.
The company engages in direct selling. Retailers are allowed to list items on their platform. The organization also allows for subscription services which enhances faster shipping of products and access to media content.
The electronics line of Amazon is one of the most recognizable ones in the sale of low-cost and convenience.
Importance of IT in Business
The rise of Amazon to become a global online trading giant is attributed to its innovativeness in creating a sustainable and highly-performing business model and adopting postmodern IT in its operation {Vrontis & Thrassou, 2013.
It is important to note that as development occurs across the world, technology continues to advance In general, the level of information technology influence on the current society is tremendous.
The discipline affects numerous fields including health, education, entertainment, and communication just to name a few. In business, technology is popular for increasing the rate of production and saving production time from the onset.
Precisely, modern businesses are reliant on technology, especially in the automation of tasks (Martinez & Brunet-Thornton, (2017, 144).
For instance, in monitoring bakeries, temperature sensors are used to detect rises and falls of temperatures. The sensors send information to the operators, who in turn take action. In the process, technology helps to save time and monitor processes in a consistent way to facilitate standardization of products.
Besides, technology enhances communication in business. In particular, electronic communication approaches such as emails, video conferencing, instant messages and cell phones facilitate prompt conveyance of information within the organization(Taiwo, 2010, p.148-149).
With effective communication, information in hi-tech enterprises becomes highly instantaneous, which facilitates product quality. Receiving of information is quicker with modern IT services since there are fewer interactions among senders and receivers of information than the past.
Nevertheless, the improved data flow that occurs among stakeholders as a result of adoption of IT allows improved interconnectivity internal and external structures of the enterprise.
Moreover, IT systems, which include cloud hosting serves to facilitate storage and backing up of business information.
Services such as Dropbox also save enterprises of paperwork and enhance remote access of data any timer anywhere.
The databases also facilitate improved analysis of business processes and results, which encourages effective and sound decision-making in the long-run.
Notwithstanding, business promotions and launch of products becomes easier and more affordable to producers that adopt IT systems.
In an illustration, small-scale enterprises use social media such as twitter and Facebook to increase awareness of their brand at a low cost (Lamb, Hair& McDaniel, 2017, p.122).
Besides, the media are used of customer interactions, which facilitate creation of strong consumer relationship.
Hence, IT enhances the provision of customer services. With the reduced cost of production, the return on investments (ROI) improves considerably.
It is, therefore, agreeable that technology is a vital component of a competitive advantage of a company since enterprises that innovate and adopt technology have a high likelihood of being efficient and their service delivery, not to mention the high rates of customer loyalty since they can meet and exceed the customer expectations.
Challenges Faced by Small Enterprises
However, small enterprises might struggle to afford and maintain core technology.
In the process, they can lose their customers to enterprises with sufficient capital and resources which invest in latest technology.
Moreover, since technology increases efficiency, it replaces many positions that people used to occupy in the past according to Ford (2016).
In an illustration, the software can do accounting, which reduces job opportunities for training accountants.
Other cases where technology replaces human labour are robots used to move goods from one section to another.
Risks and Challenges of IT in Business
The implication of modern IT is that more enterprises create and depend on remote cloud servers to store information.
People can access the servers when they have access to usernames and passwords to the information, which can result in information breaches.
Hence, information technology exposes vital business information to viruses and hackers who can cause a considerable harm to the enterprise (Kim & Solomon, 2016, p.81).
Another key thing to remember is that when ordering online, customers are required to reveal their financial details. Hackers can use such loophole to channels the customers' information for their own good.
It is important to remember that some e-commerce websites can use the custom search and purchase information in other areas such as product suggestions.
Findings and Discussion
As an online retailer, Amazon holds a significant inventory of goods which are displayed on its platform.
The endeavour is supported by the massive warehouses referred to as fulfilment centres that the company runs.
Besides direct selling, Amazon allows third parties, who are its partners, to sell items on the company's platform.
The items can either be new or used. Opening the website to retail partners allows Amazon to benefit from every sale made by the partners (Amazon.com).
In particular, Amazon is capable of tracking items that partner ell and deciding to sell the same item through their name, but at a lower cost.
Nevertheless, the company can allow the partners to operate on their platform at a minimal competition.
The strategy enables the company to build awareness of consumer demand despite not being the initial investors in the product.
The risk of experimenting in products is minimized but when the sale outcomes are favourable, prices are undercut.
Amazon allows retail partners an early advantage in moving their goods in the market at a fast rate without worrying about the operations of distribution and IT.
Long-term retail partners that are innovative achieve a competitive advantage over their rivals by selling on Amazon's platform.
At the fulfilment centre, numerous seasonal workers are employed to ship products.
Trucks arrive at the centres with various goods. The worker's scan and arrange the items on the shelves of the warehouse in a systematic way.
Scanners record items and they specify locations within the warehouse (Amazon.com).
Pickers on the scanners receive orders placed by customers and the location of the item is noted.
Scanners are connected to computer systems that figure out the quickest route within the warehouse to pick up all the items.
Therefore, the even arrangement of items in the warehouse facilitates faster location.
Once located, an item is placed in a yellow container and moved on conveyor belts that move it to the site of packaging.
In the packaging area, a computer is used to locate the optimal box, length of tape, and other packaging materials.
Packed items are labelled and sent to the delivery trucks.
Notably, despite the importance of human labour, the operation of Amazon is highly dependent on automation.
The company has implemented a Kiva system whereby order fulfilment is don on robotic shelves.
While ordinary human pickers can accomplish orders in approximately one and a half minutes, Kiva system reduced the time of delivery to 15 minutes (CNN Money).
From the business model, it is evident that Amazon is popular for its capability in transforming the retail industry using information technology.
The company's cloud network comprised of data storage centres that are arrayed across the USA and the entire world provide a considerable computing power and redundancy when emergencies strike.
The door-to-door delivery of items is enhanced by computers, algorithms, scanners, conveyer belts and mobile shelves.
It is by creating a giant in the global business, keeping prices low, packaging and shipping goods fast, that Jeff Bezos propelled himself to become the global fifth wealthiest person.
Critics and Challenges Faced by Amazon
However, the company's success, which has affected other enterprises has attracted criticism from different spheres especially on the aspect of competition.
In an illustration, recently, President Donald Trump criticized the enterprise for creating an uneven playing field.
With its capability, the company beat smaller rivals such as Oracle to win a contract with the Department of Defence to house the data for its intelligence.
Amazon web services are in the cloud computing division that is referred to as AWS is considered to be a safer choice than those of its competitors (Amazon.com).
With the decision of the government to run Cloud.gov on AWS government cloud service, the government agencies purchase Amazon services easily.
Besides, the critics call Amazon a destroyer of other businesses, and consequently, jobs in other companies. Its predatory practices push other enterprises out of businesses.
The critics contend that Amazon's CEO has made companies such as Alexa, Ford, and GE products, to rely on Amazon in selling everything ordered online by default.
Consequently, small-scale producers, e-commerce innovators and other independent stores such as Levis and KitchenAid have abandoned their direct reach to customers.
Critics assert that Amazon exploits enterprise dependence on it to dictate terms and prices to suppliers.
The other issue associated with excessive IT use in Amazon is the harnessing of customer information without the customer's awareness.
The data gathered on its platform is used to weaken competitors.
The treatment of enterprises that rely on Amazon platform are at risk too.
There are allegations that companies that build popular products and build a market for it on the website of Amazon realizes that the company has already a version of the product that is nearly identical to it and given it a top billing in the search results.
In another words, when a new seller becomes a retailer in Amazon, the company introduces the popular inventory of the merchant in its own inventory.
Therefore, being a retailer and a platform for other retailers makes Amazon shake down the suppliers easily.
Online retail business is of more a market as it is supposed to be.
Conclusion
Amazon is one of the global enterprises whose success is attributed to information technology.
In particular, the enterprise utilizes information technology systems to arrange products from various suppliers in its stores and deliver orders.
However, the rise to become a global leading platform is associated with numerous issues.
In an illustration, critics allude that the business model pushes its rivals out of business, which leads to an increase in unemployment.
The loss of jobs is also attributed to the utilization of Kiva system by Amazon.
Secondly, businesses that rely on its platform are at risk since the enterprise uses their brand information to manufacture its own products, which are sold at a lower price.
References
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