Everybody has heard of Amazon. And most of us have used Amazon to order something. The convenience of the retailer is something people love. And that’s the sole reason why they have become a trillion-dollar company.
But behind all this success is the technology powering it all. A refined machine that uses technology for innovation and breaking barriers. This guide will be all about how does Amazon use technology to their advantage.
How Amazon Approaches Technology
I do not think anyone would disagree that Amazon is a hyper-innovative company. They use technology to provide amazing services. And for this kind of innovation, the company culture and leadership are important.
How top management thinks and approaches technology is crucial. It creates a tone about how every employee should approach technology. Here is Amazon’s approach to technology for business success.
Driving Innovation
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Today's business landscape is hyper-competitive. And without investments in technology, your company will be left behind. That is why innovation is at the core of everything Amazon does. They are hands down one of the most innovative companies and it shows.
Amazon’s leading executives have innovation as their top three priorities. That shows how cutting-edge their culture is. Jeff Bezos spends most of his time thinking about innovations his company can bring.
And for that, he has trusty employees and leaders to whom he can delegate the task. Amazon thinks about what the world will look like in five, or ten years. And how Amazon can take part in it. And also, what does Amazon look like in those future years?
A technology-focused and innovation-driven roadmap is the company's main focus. Well, at least, it is top management's main focus.
Fast Moving and Experimental
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Without experimenting, you would not innovate. Yes, failures will happen. But that is just the side effect of moving fast and experimenting with the technology. Amazon always aims to move fast, experiment, and also fail fast.
It constantly tries out new things from customer insights to pricing A/B tests on its websites. It even pioneered the smart speaker, Echo. This all came from a relentless pursuit of constantly experimenting.
This shows that a company is not expected to have all hits. But unless they experiment and put their heart into it, innovation does not happen. Amazon usually experiments with ideas and technology in their home country.
What you get with experimenting is the ability to test ideas. Those that are successful can be adapted to scale. And you might stumble upon something truly innovating. Others that are not that successful can be scrapped.
The company recently started its automated stores, called Amazon Go. There is Amazon Fresh and also Amazon storefronts. All provide a unique and innovative experience to customers.
Data Driven
image source: Analytics steps
With customer insights, comes data. Lots and lots of data. Making use of this data the right way is where it all comes down. Technology is a tool. And you need to make the best use of the tool to be effective.
Effectively and insightful action based on data is how you do that. That is how Amazon does it. The company uses AI in almost all facets of its business. It believes that customers have a lot to offer.
And listening to them is important. Data opens up new opportunities for Amazon. They can provide breakthrough products and services that customers want. Jeff Pike said that they let the customers drive us.
The company is constantly trying to invest in something that creates value for the customers. Something that they would love. This shows you how customer-driven they are. This is another example of how Amazon uses technology to their advantage.
Amazon does not only use the data to make profitable business decisions, it is all about the customer's experience. You need to think of your customers first. What is their experience with using your product or service?
Ideas as Assets
Ideas are what keep Amazon on the cutting edge. The company treats great ideas as assets and they do put an asset value on them. A great idea can drastically improve a current process and make it much better.
Whether it be making it faster, cheaper, or better. Could be all three too. Thinking of great ideas is what drives growth, the company believes. And this is where new opportunities will come up as well.
There are three mantras on which every idea needs to be based. Thinking about the long term, innovation, and also being inventive. But employees at the company need to be clear about their ideas as well.
When someone proposes something in the meeting, they must be prepared for a lot of questions. A barrage of questions, to be more specific. In other companies, a manager might have to hunt for a lot of yeses and then a single no can completely halt the idea.
However, in Amazon, the company structure empowers everyone.
A Risk-Taking Culture
Advocating innovation, thinking of great ideas, and allowing for experimentation will not bode well without a risk-taking culture. Amazon does not have this issue. Amazon has a system of vetting ideas in a way.
The idea should be scalable, it should be something new, and also should give a significant return. It encourages debates and questioning. You are allowed to take risks. But only if you think you are right.
And for that, you need to be prepared for a lot of questions. There are constant debates on what to measure,
An Information Technology Powerhouse
Amazon's use of IT has also played a huge role in transforming it into what it is today. The company uses AI, automation, and data to improve its business processes.
This, of course, in turn, leads to a more competitive company overall. It uses a host of other technologies to ensure that business processes are smooth. The technology suite includes networking which is the most critical.
Then there is also middleware, web services, and groupware. For management, Amazon uses technologies to make its operational divisions more efficient as well. Everything from accounting, logistics, and human resources is linked to the network.
Amazon Warehouse Technologies
Image Source: The Business Journals
Amazon and its warehouses can be described as a major part of the company. This is where the company handles all the packages and logistics. So, it is natural that you will see a lot of innovation here. And you do.
Technologies in Amazon’s warehouses enabled employees to handle their work in a more refined and automated way. They can pick box sizes, and also the shortest walking route.
Amazon uses a process called SLAM – Scan, Label, Apply, and Manifest. It is a process that was internally developed by Amazon themselves to improve the delivery and package handling process.
Amazon also has robots in their warehouses that also work alongside the workers to make the process more efficient.
Wrapping Up
Now that you know how Amazon uses technology to their advantage, you can tell why the company is what it is today. Technology is the tool that drives them to constantly push for new heights and expand their business. And considering how Amazon has become one of the most successful businesses in the world, you can say that all of the investment in tech is greatly paying off.
Companies like Amazon also have a culture that allows people to think out of the box and come up with groundbreaking ideas that can drastically change the way they do business. They have a risk-taking culture. Yet, one that is clear thinking and calculative.
