Wednesday, April 1, 2015

Amazing Amazon?

Traditionally, IT had been thought of as a separate industry and a distinct sector in itself; one that not much impact the functioning of other industries or organizations. With recent advancements in computing and the breakneck speed of technological progress, IT has become relevant and pervasive. The McKinsey article identifies the ten IT trends that would transform businesses in the future.

Observing the dynamics of industries and successful organizations that have cropped up in the recent years, it becomes evident that the greatest innovation and success has come to organizations that have been able to integrate a multitude of these trends in their operations and the products and services they offer to their customers.  Utilizing these trends in isolation lends a positive direction to company operations, but amalgamating many of these trends enable organizations to unlock synergies of a much grander magnitude.

The astounding success of online retailer Amazon presents the best case study here. Key to their success is a religious obsession with innovation and an emphasis on integrating top IT trends. Amazon started operations as an online retailer and capitalized on the trend towards ecommerce by offering customers a convenient way to shop from an immense variety of available products. Innovations such as Amazon Prime that offered guaranteed two-day shipping to participating customers ensured that Amazon was able to retain customer loyalty in an industry that has low barriers to entry and low switching costs for the customer.

Jumping off an initial emphasis on ecommerce, Amazon has since embarked on a simultaneous mission to blur boundaries between the digital and physical realms, and focusing on making their products and services simple and customized for their users helped by a zealous stress on big data analytics. In December 2014, Amazon commenced a “One-hour Delivery” service in Manhattan, New York with a promise to add other locations soon. Also, to enhance customer experience, Amazon opened up a pilot brick-and-mortar store in Purdue University to explore additional avenues of customer service and interaction.

The focus on innovation by amalgamating future IT trends extends beyond services and into products as well. Amazon launched the Kindle e-reader device in 2007 with the intent of digitizing the way people use books. The Kindle was immensely successful due to a simple design, reasonable price and a focus on elements that customers desire. Amazon is pushing the envelope of innovation further and further out; recently, Amazon tested a concept of product deliveries by drones – a concept that is aptly labeled Amazon PrimeAir. Most recently, Amazon launched the Amazon Dash Button on March 31, 2015 – a button that automatically and intelligently reorders groceries based on a real-time monitoring of current inventory levels of various everyday-use household products. With this, Amazon is charting user experiences where the physical meets the digital and knowledge work is automated all using a simple and intuitive product.

Innovation with a focus on integrating various IT trends is a primary reason for Amazon’s wild success in the recent past. An imperfect but still pertinent indicator of this is Amazon’s stock price; Amazon’s stock price went from $109 in July 2010 to $380 in March 2015 – an astounding increase of 248%! Amazon’s example shows that the future profitability and innovation lies in companies being able to successfully integrate global IT trends.

Sources:

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.