Netflix Information System
Description of Technology The information systems that Netflix uses to run their business are proprietary software – in other words, most of its technology was built in-house. Since Netflix technology was built in-house, the company can be private about sharing the exact details about how exactly their technology works (McGregor 2005). The essential systems that Netflix uses are the following: supply chain management systems and customer relationships management systems.
Customer Relationship Management Systems Netflix uses customer relationship management (CRM) systems to serve customers more efficiently. CRM systems discover the needs, wants, and behaviors of the customers. This information is then placed in a data warehouse and then analyzed by the CRM system. The goal of having CRM systems is to limit negative experiences with the company and provide positive experiences instead (Haag 50). One of the most important technologies that support Netflix’s customer relationship management is its custom-built intelligent agent. An intelligent agent is artificial intelligence software that helps or acts on behalf of the user to perform repetitive-computer related tasks (Haag 224). In particular, Netflix uses a buyer agent, also known as a shopping bot. A buyer agent is an intelligent agent on a website that assists the consumer in finding a product or service that he or she wants (Haag 225). Netflix’ shopping bots use two techniques in order to predict customers’ DVD preferences: collaborative filtering and adaptive filtering. Collaborative filtering is when a customer is matched with a group of users who have similar tastes. Then, the customer is presented with common selections in that group (Haag 225). Adaptive filtering is when the consumer is asked to rate a product or situation and then monitored over time (Haag 226). Ultimately, Netflix will know what the customer likes and dislikes. By using a hybrid technique, Netflix is able to give
Customer Relationship Management Systems Netflix uses customer relationship management (CRM) systems to serve customers more efficiently. CRM systems discover the needs, wants, and behaviors of the customers. This information is then placed in a data warehouse and then analyzed by the CRM system. The goal of having CRM systems is to limit negative experiences with the company and provide positive experiences instead (Haag 50). One of the most important technologies that support Netflix’s customer relationship management is its custom-built intelligent agent. An intelligent agent is artificial intelligence software that helps or acts on behalf of the user to perform repetitive-computer related tasks (Haag 224). In particular, Netflix uses a buyer agent, also known as a shopping bot. A buyer agent is an intelligent agent on a website that assists the consumer in finding a product or service that he or she wants (Haag 225). Netflix’ shopping bots use two techniques in order to predict customers’ DVD preferences: collaborative filtering and adaptive filtering. Collaborative filtering is when a customer is matched with a group of users who have similar tastes. Then, the customer is presented with common selections in that group (Haag 225). Adaptive filtering is when the consumer is asked to rate a product or situation and then monitored over time (Haag 226). Ultimately, Netflix will know what the customer likes and dislikes. By using a hybrid technique, Netflix is able to give
Bibliography: Greene, Kate. “Netflix: DVDs at Your Door.” PC Magazine. 19 February 2003. 16 November 2006 < http://www.pcmag.com/article2/0,4149,894278,00.asp>. ---. “The $1 Million Netflix Challenge.” Technology Review. Oct. 2006. 15 Nov. 2006 . Haag, Stephen, Maeve Cummings, Donald J. McCubbrey, Alain Pinsonneault, and Richard Donovan. Management Information Systems for the Information Age. 3rd ed. Toronto, ON: McGraw-Hill Ryerson, 2006. McGregor, Jena. “High-tech Achiever: Netflix.” Fast Company. October 2005. 15 November 2006 < http://www.fastcompany.com/magazine/99/open_customer-netflix.html>. Margulius, David L. “Breaking Away.” InfoWorld. 27.49 (2005): 28. Stevens, Larry. “We Try Harder; At Netflix the technology is the operations. But can that business model handle its rapid growth?.” CIO Insight. 1.59 (2005): 17 pars. 18 November 2006 .