MIS 201 Saudi Electronic University Amazon Information System Paper

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POM The United States Postal Service Utilizes Information Technology to Modernize

The Problems

Every American is a customer of the United States Postal Service (USPS; www.usps.gov), an agency that delivers 158 billion pieces of mail per year. Despite its importance to U.S. citizens, however, the agency faces multiple challenges, including:

Electronic mail has contributed to a decrease in the volume of first-class (or stamped) mail. This decrease has led to a decline in USPS revenue.

  • Another cause of declining revenues is competition from private delivery companies like FedEx (www.fedex.com) and UPS (www. ups.com). These businesses are taking customers away from USPS’s package delivery service while sometimes relying on the agency for last-mile delivery. Last-mile delivery is the final and typically most expensive leg of a delivery route.
  • Other companies are also developing services that could disrupt the USPS’s parcel delivery service. For example, Matternet (http:// mttr.net), Amazon (Amazon Prime Air), and Google (Project Wing) have developed unmanned aerial vehicles, or drones, that can deliver packages and letters.
  • Transportation has long been the essential skill at the USPS. Nev­ ertheless, the agency has approximately 160,000 delivery vehi­ cles that are 20 years old and need to be replaced.
  • Incontrasttotransportationskills,digitaltechnologyhasnotbeen an essential skill at the USPS. One major example that illustrates this problem occurred in November 2014, when the USPS became a victim of a cyberattack that threatened to put the names, address­ es, and social security numbers of 800,000 of its employees at risk.
  • Further, USPS efforts to utilize cloud computing to reduce costs

have raised concerns. In September 2014, the USPS inspector general (IG) criticized the agency for not properly controlling applications in its cloud environment with regard to information accessibility and data security.

The USPS has long recognized these problems, and it has tried to introduce cost-saving measures. However, even though the agency is part of the executive branch of the federal government, Congress has enormous power over it. (The USPS is not funded by taxpayers.) Specif­ ically, Congress has rejected proposals to eliminate Saturday delivery of first-class mail, and it has prevented the USPS from consolidating little-used post offices in rural areas. These moves would have helped the agency reduce costs. Congress has also required the USPS to make regular payments into its future retirees’ health benefits, a mandate that imposed financial burdens on the agency.

The USPS also has massive amounts of data on every piece of mail exchanged among millions of Americans as well as the companies that sell to them. However, the agency must meet the privacy statutes that apply to federal agencies. As a result, the agency cannot sell its data to businesses to help them better target consumers and therefore increase sales revenues.

And the result of these numerous and diverse problems? Despite taking measures to reduce costs, such as closing processing centers and reducing employee working hours, 2015 was the USPS’s ninth con­ secutive year of losses.

A Variety of Solutions

To address these problems, the USPS is implementing a variety of solu­ tions. The agency is redesigning its mail-tracking system to encode as much information as possible on its letter and parcel bar codes with its Intelligent Mail bar code (IMB) system. The IMB uses automatic scanning devices and sorting equipment to scan bar codes to capture billions of data points and transmit them to a central database. Data range from the type of mail being delivered to a parcel’s final destina­ tion.The IMB enables the agency’s postal processing facilities to oper­ ate more efficiently.

In addition to supporting this real-time responsiveness, the USPS is also using data to enhance mail delivery. Accurately tracking how mail moves around the country, from the moment a delivery vehicle arrives at a dock to the second a letter reaches a delivery point, provides the agency with massive amounts of data. Data analytics enables the USPS to develop dynamic routing—the use of sophisticated algorithms to map out the most efficient and cost-effective mail delivery routes.

In addition, mobile computing is driving innovation at the USPS. The agency has been replacing letter carriers’ cellphones with mobile delivery devices (MDDs). These handheld devices access multiple wireless networks to track parcels in real time. In addition, the MDDs provide the USPS with location data from its delivery vehicles. This process helps the agency to ensure its employees’ safety, predict deliv­ ery times, and pick up urgent materials from its customers.

In the fall of 2014, the agency introduced an augmented reality technology designed to convert standard print ads into interactive experiences. The system enables consumers to use a free Android or iOS app to view digital presentations when they scan special icons that marketers attach to advertising brochures sent through the mail.

In November 2013, Amazon entered into an arrangement with the USPS to deliver packages on Sundays in select cities. The partnership created an opportunity for the USPS to establish a stronger foothold in the growing package-delivery market. Consequently, its package reve­ nue increased 12 percent from 2012 to 2014.

In response to the Inspector General’s criticisms regarding cloud applications, the USPS is utilizing the Federal Cloud Credential Exchange. The exchange is a cloud-based clearing service that acts as a hub for validating the digital credentials of people who want access to online government services. As a result, the Exchange also provides a high level of security for USPS applications running in the cloud.

And the largest missed opportunity for a possible solution? If federal privacy guidelines allowed the practice, the USPS could use the IMB to help retailers and catalog companies create successful marketing campaigns. Consider a retailer that receives an e-mail or a text message alert from the USPS that a particular customer has just received the company’s catalog. The retailer could immediately e-mail the customer a digital coupon or a promotional offer in an effort to drive sales and enhance the overall customer experience.

The Results

The CIO of the USPS notes that information technology has become a core function within the agency. That is, IT is no longer a cost center. Instead, it adds essential value to the organization. However, the suc­ cess or failure of these diverse initiatives remains to be seen. That is, can the USPS stop losing so much money each year, or at least slow the hemorrhage?

Sources: Compiled from D. Leonard, “From: Postmaster General;

To: Amazon,” Bloomberg BusinessWeek, August 3-9, 2015; S. Tracy, “Autonomous Vehicles Will Replace Taxi Drivers, but That’s Just the Beginning,” Huffington Post, June 12, 2015; “Intelligent Mail Barcode

for Mailpieces,” United States Postal Service, May 4, 2015; S. Edelstein, “U.S.P.S. ‘Long Life’ Vehicles Last 25 Years, But Age Shows Now,” Green Car Reports, February 17, 2015; J. Williams, “Heading into 2015, USPS Looks to Tech to Reshape Model,” fedscoop, December 31, 2014; C. Waxer, “Digital SOS: How Technology Can Save the USPS,” Computerworld, December 8, 2014; C. Waxer, “Modernizing the Mail,” Computerworld, December, 2014; J. Williams, “USPS Cloud Systems Don’t Comply with Established Standards, OIG Says,” fedscoop, September 10, 2014; M. Ashley, “Why Amazon Locker Is Better Than Home Delivery,” TechHive, July 28, 2014; “U.S. Postal Service Parcel Delivery Lockers,” Office of Inspector General, United States Postal Service; December 2013; J.    Edgar, “How Technology Is Changing the USPS,” The Wall Street Journal, October

10, 2013; W. Jackson, “USPS Set to Put Federal ID System to the Test,”

GCN.com, August 22, 2013; www.usps.gov, accessed July 14, 2015. Questions

1. Provide specific examples of how information technology is nega­ tively impacting the USPS.

2. Provide specific examples of how information technology is posi­ tively impacting the USPS.

3. Describe how information technology both positively and nega­ tively impacts your university.

4. Is it possible to generalize and describe information technology as a “two-edged” sword for all organizations? Why or why not?           

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