Posted: August 15th, 2022

Amazon’s IT Governance

Amazon’s IT Governance
Imagine you are preparing for an interview with a company as an IT manager. Part of the interview process is a work sample. You must demonstrate your understanding of IT governance and IT strategic vision by analyzing Amazon’s business strategy in relation to IT governance.

Search for a recent article on Amazon’s business strategy.

Develop a 1- to 2-page checklist of the main points Amazon’s IT department should consider so IT is properly aligned to Amazon’s strategic business plan. Include relevant laws, regulations, and industry standards that would impact the business plan, such as PCI standards and SOX regulations.

Write a 1- to 2-page summary of the effectiveness of Amazon’s IT governance and how it executes it’s IT strategic vision as you understand it.

Amazon’s IT Governance
Amazon is the world’s largest online retailer operating through a combination of both localized portals and globalized delivery ad logistic performance. The company has leveraged Information Technology as their main source of competitive advantage. The importance of IT to Amazon is reflected in the company IT governance strategies in place (Gregory, 2019). Amazon’s main aim is to ensure IT management that simplifies and improves the customer shopping experience, supports the third party to use the Amazon platform for selling their products, and facilitating the fulfillment of the company’s customer service operations. This paper discusses the effectiveness of Amazon’s IT governance and how it executes its IT strategies to ensure they are aligned with the business strategies.
The business operating model of Amazon is structured within four processes that support its functioning. The first operating model applied by amazon is high integration in terms of cross-selling capabilities, unified online retail system, and high cloud computing integration which holds the amazon platform. The operating model of amazon is high on standardization, whereby the platform encourages the same buying process across different product categories and different countries where the Amazon platform operates follow the same process (Prajog, 2011). Another operating model used by Amazon is unification, which has both high standardization and integration. The unification operation model involves building a platform that contains standardized technologies, business processes, and shared data to support global end-to-end customer needs.
In the Amazon IT governance, the company architecture is structured into different categories including core business processes which are an online retail process, cloud computing, and digital distribution such as books via the website, videos via video streaming platforms, and audio via cloud streaming services (Prajog, 2011). Another category is the data which is highly standardized and managed based on the buying patterns of customers and their preferences. Technology as a category in the enterprise architecture involves the company’s proprietary online retail system and recommendation engine, the company’s cloud computing infrastructures, and data warehouse systems and analytics. The customer category in Amazon architecture involves the provision of a mass-market which can enable every individual with access to the internet to access services availed Amazon or companies with cloud computing.
To ensure Amazon’s IT department is aligned properly with the Amazon’s strategic business plan, the need to implement risk analysis and control mechanisms is important. Some of the common risks that the Amazon IT department faces include system interruption, which has a low likelihood to occur but when it occurs it has a high impact on the business operation of the company. The control mechanisms in place for system interruption include server back-up in distributed locations, application of encryption mode, and use of security personnel. Another risk facing Amazon IT governance is payment fraud which poses a high impact on business processes if it occurs. The IT department mechanisms of payment fraud control include the implementation of the Payment Card Industry Data Security Standard (PCI-DSS) regulations, management of access and authentication. The integrity of data is important to the operation of Amazon (The MITRE Corporation, 2019). To ensure data integrity is maintained, the IT department enforces behavior rules, asset classification, and governance principles to support high effectivity, respectful, and accountability of the company data.
IT governance also involves complying with regulations related to the IT Amazon business processes. Some of the regulatory compliance adhered to by the IT department include the PCI DSS as a requirement of the company credit card payment method. Sarbanes-Oxley Act (SOX) is also applied in IT governance to protect shareholders and the general public from fraudulent practices or errors in the company and improving the accuracy of corporate disclosures. The company also complies with the CAN-SPAM Act of 2003, and Federal Trade Commission Act Section 5: Unfair or Deceptive Acts or Practices to ensure it remains aligned its vision.

References
Gregory, L. (2019, February 13). Amazon.com Inc.’s Mission Statement & Vision Statement (An Analysis). Panmore Institute. Retrieved from http://panmore.com/amazon-com-inc-vision-statement-mission-statement-analysis
Prajog, E. (2011, October 8). IT Governance – Amazon.com. LinkedIn Corporation. Retrieved from https://www.slideshare.net/ErickPrajogo/it-governance-amazoncom
The MITRE Corporation. (2019). IT Governance. Retrieved from https://www.mitre.org/publications/systems-engineering-guide/enterprise-engineering/enterprise-planning-and-management/it-governance

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