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f. Can people increase their collaboration skills? If 5' so, how? If not, why not?

4. Experimentation.

a. Define experimentation, and explain why it is an important skill for business professionals.

b. Explain several creative ways you could use . experimentation to answer this question.

c. How does the fear of failure influence your will- ingness to engage in any of the ideas you identi- fied in part b?

d. Explain how Iennifer failed to demonstrate effec- tive experimentation skills.

e. Can people increase their willingness to take risks? If so, how? If not, why not?

ffi Case Study 1 '' i:"r,,.:,r:,^ :ill,il.l.i t i' i:i) :' i,;"i, t,, rl.,l:.i'i . :r, :'.

On Novemb er 29, 2010, Amazon. com customers ordered 13.7 million items worldwide, an average of 158 items per second. On its peak order-fulfillment day, Amazon shipped over 9 million units, and over the entire 2010 holiday season it shipped to 178 countries.6 Such per- formance is only possible because of Amazon's innova- tive use of information systems. Some of its major innovations are listed in Figure 1-7.

You may think of Amazon as simply an online retailer, and that is indeed where the company achieved most of its success. To do this, Amazon had to build enormous supporting infrastructure-;just imagine the information systems and fulfillment facilities needed to ship 9 million items on a single day. That infrastructure, however, is only needed during the busy holiday season. Most of the year, Amazon is left with excess infrastructure capacity. Starting in 2000, Amazon began to lease some of that ca- pacity to other companies. In the process, it played a key role in the creation of what are termed cloud seruices, which you will learn about in Chapter 4. For now, just think of cloud services as computer resources somewhere out in the Internet that are leased on flexible terms. Today,

Case Study 1 27

Job security.

a. State the text's definition of iob security. b. Evaluate the text's definition of job security. Is it

effective? If you think not, offer a better definition ofjob security.

c. As a team, do you agree that improving your skills on the four dimensions in Collaboration Exercises 1-4 will increase your job security?

d. Do you think technical skills (accounting proficiency, financial analysis proficiency, etc. ) provide job security? Why or why not? Do you think you would have answered this question differently in 1980? V/hy or why not?

Amazorfs business lines can be grouped into three major categories:

':' Online retailing 'ii Order fulfillment ':] Cloud services

Consider each. Amazon created the business model for online

retailing. It began as an online bookstore, but every year since 1998 it has added new product categories. In 201 1, the company sold goods in 29 product categories. Undoubtedly, there will be more by the time you read this.

Amazon is involved in all aspects of online retailing. It sells its own inventory. It incentivizes you, via the Associates program, to sell its inventory as well. Or, it will help you sell your inventory within its product pages or via one of its consignment venues. Online auctions are the major aspect of online sales in which Amazon does not participate. It tried auctions in 1999, but it could never make inroads against eBay.7

Today, it's hard to remember how much of what we take for granted was pioneered byAmazon. "Customers who bought this, also bought that;" online customer

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6 Amazon, "Third-Generation Kindle Now the Bestselling Product of A11 Time on Amazon Worldwide," News release, December 27 , 2010. Available at http:/ /ph-r.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1510745&highlighl= (zccessed lune 2011). 7 For a fascinating glimpse of this story from someone inside the company, see "EarlyAmazon: Auctions" at http://glinden.blogspot. com I 2006 I 04 I early- Amazon.com-auctions.html (accessed June 20 1 1).

28 CHAPTER 1 The lmportance of MIS

First online bookseller

Launch ofAmazon.com Associates Program-sellers earn revenue by featuring Amazon.com products on their Web sites

1-ClickrM Shopping

Amazon.com Prime

Alexa Web lnformation Service

Kindle

Figure 1-7 lnnovation at Amazon

Source:Amazon.com, "Media Kit and History," February 201 1. Available aI http://phx.corporate- i r. n et/p h o e n ix. zhtm I ? c= 1 7 6060 & p = i rol -c o r p o rateT i m e I i n e (accessed July 201 1 ).

Amazon.com Advantage Prog ram-self-service consignment sales for media

Amazon.com auctionsx-com petitor to eBay that failed

Amazon.com Web Services enhance- ments and upgrades

Kindle 2 and Kindle DX

Kindle applications for iPhone and iPod Touch

Kindle for Mac, iPad,

Android, and Web

Kindle Fire

199s 1996 1997 1998 1999 2005 2006 2007 2008 2009 2010 2011

Amazon.com Associates Web Services-gives developers access to Amazon.com product data

Search lnslde the BookTM

Amazon.com Web Services (AWS)-leasing

of computer infrastructure

Borders Group Alliance and Target Stores Alliance

Launches Marketplace-sellers can sell goods on the Amazon.com Web site and Amazon.com can fulfill the orders

reviews; customer ranking of customer reviews; books lists; Look Inside the Book; automatic free shipping for certain orders or frequent customers; and Kindle books and devices were all novel concepts when Amazon introduced them.

Amazon's retailing business operates on very thin margins. Products are usually sold at a discount from the stated retail price, and 2-day shipping is free for Amazon Prime members (who pay an annual fee of $80) . How do they do it? For one, Amazon drives its employees incredibly hard. Former employees claim the hours are long, the pressure is severe, and the workload is hear,y. But what else? It comes down to Moore's Law and the innovative use of nearly free data processing, storage, and communication.

In addition to online retailing, Amazon also sells order fulflllment seryices. You can ship your inventory to an Amazon warehouse and access Amazon's informa- tion systems just as if they were yours. Using technology known asWeb services (discussed in Chapter 6), your order processing information systems can directly inte- grate, over the Web, with Amazon's inventory, fulfill- ment, and shipping applications. Your customers need not know that Amazon played any role at all. You can also sell that same inventory using Amazon's retail sales applications.

AmazonWeb Services (AWS) allows organizations to lease time on computer equipment in very flexible ways. Amazon's Elastic Cloud 2{EC2) enables organizations to expand and contract the computer resources they need

Case StudY 1 29

1.

te- a&

u,ithin minutes. Amazon has avariety of payment plans'

and it is possible to buy computer time for less than a penny un hor.. Key to this capability is the ability for the

i"a.l.tg organization's computer programs to interface rvith,Ainazon's to automatically scale up and scale doii"T t

the resources leased. For example, if a news site pub- lishes a story that causes a rapid ramp-up of traffic' that

news site can, programmatically, request, configure' and

use more ao*prtirrg resources for an hour, a day' a month, whatever. Amazon.com also uses EC2 to support

Silk, the innovative browser on the Kindle Fire' You will Iearn more about the cloud in Chapter 4'

Questions

1. In what ways does Amazon, as a company' evidence

the willingness and ability to collaborate?

2. In what ways does Amazon, as a companJ4 evidence

the willingness and ability to experiment?

3. In what ways do you think the employees at Amazon

must be ubl" to perform systems and abstract thinking?

4. Describe, at a high level, the principal roles played

by each of the five components of an information system that supports order fulfillment'

5. Choose any five of the innovations in Figure 1-7 and

explain how you think Moore's Law facilitated that

innovation.

6. Suppose you work for Amazon or a company that

takes innovation as seriously as Amazon does' \'Mhat

do you suppose is the likely reaction to an employee

wht says fo his or her boss, "But, I dont knowhow to do that!"?

7. Using your own words and your own experience' *naistils and abilities do you think you need to have to thrive at an organization like Amazon?

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