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Alignment of IT Strategy and Business Strategy

Information Technology strategy development and implementation will take practice, but this is a journey. A firm’s IT strategy will evolve over time and improve over time. The CIO must draw from diverse sources to develop new ideas, tactics, and projects. Diverse sources include employees of different racial and ethnic backgrounds and diversity in gender. These workers bring a fresh perspective in determining systems requirements and can result in innovative solutions.
Begin with business practice articles such as those in the Wall Street Journal, which covers business generally, but also has a good section for technology executives and Chief Information Officers. Forbes often covers technology topics that you might find interesting. In terms of books on strategy, Michael Porter is a must. His original text is on competitive strategy, but he has a variety of other books to consider. Also look at this piece on creativity and diversity: Why diversity is the mother of creativity. You should follow leading thinkers in the world of technology, from venture capitalists and technology executives to those who write primarily for a CIO audience.

Prepare a 4- to 5-page paper for the following:
Look at the business–IT alignment at Amazon. Compare the business–IT alignment of the Amazon business line that sells products to customers with the Amazon business that sells IT cloud services to organizations. Look for articles in Forbes and Business Week that discuss the organization and strategy of Amazon and specifically address the issue of alignment. Discuss the synergy across these lines of business for Amazon and the diversity that Amazon uses in its hiring practices to enable innovation across the business units. Provide specifics in your discussion to enable a comparative analysis, including any experience you may have had with Amazon.

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Sample Answer

Business-IT Alignment at Amazon: A Comparative Analysis of Retail and AWS

Introduction

In the contemporary business landscape, the seamless integration of business strategy with information technology (IT) strategy, known as business-IT alignment, is no longer a luxury but a fundamental imperative for competitive advantage. Peter Weill and Jeanne Ross, in their seminal work, highlight how effective IT strategy supports an organization’s core business model and enables its strategic objectives. This paper will delve into the formidable case of Amazon, a global behemoth that has masterfully achieved business-IT alignment across its seemingly disparate, yet deeply synergistic, business lines: its foundational e-commerce retail operation and its sprawling cloud computing empire, Amazon Web Services (AWS). We will compare their respective alignments, explore the underlying synergy, and discuss how Amazon’s commitment to diversity in its hiring practices fuels the innovation critical for this alignment.

Full Answer Section

Business-IT Alignment in Amazon’s Retail Division

Amazon’s journey began as an online bookstore, quickly evolving into “the Everything Store.” The core business strategy of its retail division has always revolved around customer obsession, offering the widest selection, competitive pricing, and unparalleled convenience (fast shipping, easy returns). IT is not merely a support function here; it is the nervous system of the retail operation.

Alignment Description:

Customer-Centric Infrastructure: Amazon’s IT strategy for retail is intrinsically tied to enhancing the customer experience. This is evident in its robust website and mobile app interfaces designed for intuitive navigation, personalized recommendations (powered by sophisticated algorithms and vast customer data), and seamless purchasing processes. The IT systems are built to handle immense traffic spikes, ensuring uninterrupted service during peak shopping seasons like Prime Day or Black Friday.
Logistics and Supply Chain Optimization: A cornerstone of Amazon’s retail success is its advanced fulfillment network. The IT systems here manage everything from inventory tracking across hundreds of fulfillment centers globally, optimizing picking and packing routes using robotics and AI, to orchestrating complex last-mile delivery logistics. Sensors, real-time data analytics, and predictive algorithms ensure products are where they need to be, when they need to be there, minimizing delivery times and costs. For instance, Amazon’s fulfillment centers leverage thousands of robotic drive units, like the Kiva robots acquired in 2012, which are orchestrated by complex IT systems to bring shelves to human pickers, drastically improving efficiency.
Data-Driven Decision Making: Every click, purchase, and review on Amazon’s retail platform generates data. The IT strategy enables the collection, storage, and analysis of this colossal dataset to inform pricing strategies, product assortment, marketing campaigns, and even the design of new services like Prime Video or Amazon Fresh. This continuous feedback loop allows for rapid experimentation and adaptation to customer preferences.
Scalability and Reliability: The core IT architecture of Amazon’s retail side was designed for extreme scalability from day one, allowing it to grow from a small online bookstore to a platform handling billions of transactions annually. This foundational principle of building highly available and scalable services for internal use became a template for its later ventures.

Personal Experience: My experience with Amazon as a consumer directly reflects this alignment. The ease of searching for obscure items, the often-accurate product recommendations, the transparency of shipping tracking, and the reliability of two-day Prime delivery all underscore a retail operation where IT is not just a tool but the very fabric of the customer value proposition. When I’ve needed customer service, the ability for representatives to quickly access my order history and address issues efficiently also points to well-integrated backend systems.

Business-IT Alignment in Amazon Web Services (AWS)

AWS emerged from Amazon’s internal need for scalable, reliable, and cost-effective IT infrastructure to support its rapidly expanding retail operations. Recognizing the value of this internal capability, Amazon began offering these services to external customers in 2006. AWS’s business strategy is to provide on-demand cloud computing platforms and APIs to individuals, companies, and governments, offering compute power, storage, databases, analytics, machine learning, and more.

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