BM565 Digital Business and New Technologies Assignment Sample

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Introduction - BM565 Digital Business and New Technologies Assignment Sample

Artificial Intelligence (AI) is one of the key enablers of digital business transformation today, revolutionizing industries through efficiency, productivity, and improved customer experiences. This BM565 Digital Business Assignment Sample investigates AI’s impact on Amazon and Hermes, exploring challenges, strategies, and digital disruption. For students needing reliable support, our assignment help writing services provide expert assistance to excel in this complex topic.

Key Findings from Collective CW1

The contributions to the research on the use of Artificial Intelligence (AI) in the retail sector provided several important insights that demonstrate the potential of AI to revolutionize the way business is done. AI has been designed to mimic cognitive functions of the human brain and that makes it capable of solving problems that earlier needed intervention from human beings. This has been a significant advancement in various business operations, especially in the retail sector as AI has been used in decision-making, customer service, and management of stocks. For instance, the use of artificial intelligence for demand forecasting has been seen as a strategic tool for retailers through which they can properly manage their stock, minimize wastage, and ensure that the right products are in the market at the right time thus enhancing the organization's profitability and effectiveness (Abbasimehr, Shabani and Yousefi, 2020). In the same way, the application of AI solutions and platforms like Salesforce Einstein, and Google AI is now widespread to enhance business effectiveness, manage customers’ data, and enhance recruitment. The above advancements have enabled companies to get a better understanding of their customers’ behaviour, offer targeted marketing, and increase customer experience. However, as with any other industry, the application of AI in the retail sector has its own set of challenges (Albayrak, Sancar and Karasoy, 2023).. This is because technological advancement is a dynamic process and organizations are therefore required to change their technologies to meet the competitive challenge. Furthermore, there is the issue of risk that arises due to the dependence on AI, for instance, in the example of system failure or hacks. The overall discussion also underlines the need to consider the ethical issues that relate to the use of AI applications such as the protection of data and bias in the systems. In totality, AI has the potential to transform the retail industry and bring value and efficiencies to the sector, but the associated risks have to be well managed to achieve long-term success(Amoako, Dzogbenuku and Kumi, 2021).

BM565 Digital Business and New Technologies Assignment Sample

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Application of Key Findings to Amazon and Hermes

The following are the conclusions drawn from the synthesis of the literature on the use of AI in the retail industry to the case of Amazon and Hermes operating in the e-commerce and logistics industries respectively. Both organisations have adopted the use of AI in their business processes and are aware of the challenges that come with digital disruption and hence need to come up with strategic measures to address them.

Amazon: Leading Through Innovation but Facing Growing Pains

AI has been one of the most important technologies in recent years and Amazon is one of the companies that have been implementing it in many aspects of its operations such as inventory control, supply chain, customer service, and marketing. One of the most successful examples is Amazon’s recommendation engine powered by artificial intelligence which helped the company to increase sales and customer satisfaction through suggesting products that the customer has already bought or viewed. This system with the help of the Customer Relationship Management (CRM) model enables Amazon to tailor shopping experiences and thus increases customer loyalty and retention (Bharadiya, Ahuja and Kothari, 2023). But, as Amazon moves forward with its business in different countries, the company faces numerous problems because of disruption. One of the most important problems is the growing challenge of controlling its very extensive and multifaceted supply chain. It is very crucial to note that AI helps predict the demand of consumers and manage inventory but this has to be done very often and with the increasing data, there is a need for continual enhancement. One of the major issues is that AI-based decisions may result in stockouts or overstocks as the case of Sainsbury’s is evidence of. Thus, the usage of AI is a problem due to the violation of data security and privacy as Amazon gathers a lot of customers’ data to train the AI (Gil-Gomez et al., 2020). The other developing issue for Amazon is the legal concerns on the use of artificial intelligence. It also raises the concern of how such AI systems are to make decisions that could eventually be biased and not in the best interest of all the customers. For instance, AI algorithms may have been trained on data that is skewed to either demographic or geographic preferences which in turn would produce unequal service delivery. There is also a legal concern in the use of AI technology in business operations as governments and regulatory authorities are paying much attention to the application of AI technology in business especially on data protection and consumer rights (Huberman, 2021).

Hermes: Embracing AI While Navigating Disruption in Logistics

Another example is Hermes, a logistics company, that has leveraged the use of AI in its operations to determine the best routes for delivery, manage its logistics networks, and interact with customers through chatbots and tracking systems. Hermes has been able to achieve efficiency, cut down on cost, and improve the services they offer their customers through the incorporation of AI. For instance, artificial intelligence is applied in information systems to make better estimates of delivery times and to determine the best routes that would be used to reduce fuel consumption and time delivery. However, Hermes has certain problems which are attributable to digital disruption. A major problem is the need to be innovative in a field that is fast being mechanized. Even though AI has helped in enhancing the efficiency of operations, it has also brought in new challenges (Kulal, Singh and Gupta, 2024). For example, the adoption of AI in the logistics field entails huge capital expenditure on technology and human resources to support the systems. This creates concern about dehumanization in decision-making because many decisions are now being made by Artificial Intelligence systems. A major problem for Hermes is the competition in the market. The logistics sector has been on the path of innovation with emerging players using AI and other technology innovations to challenge conventional models. It (logistics service) is also competitive as companies such as Amazon that are its customers are building their logistics capacities, thus creating more competition (Musa, Belk and Chai, 2024). This means that Hermes has to provide innovation and differentiate its services in the face of this disruption. Also, the ethical and legal issues that have been discussed about AI are relevant to Hermes. AI in logistics means dealing with data, which includes and probably primarily consists of the personal data of clients and their preferences regarding delivery (Morandini, Bellini and Gatti, 2023).\.

From a theoretical point of view, the Technology Acceptance Model (TAM) can be used to understand how both Amazon and Hermes can address the challenges that are associated with AI implementation. According to the model, users’ acceptance of new technologies is determined by two factors, namely perceived usefulness and perceived ease of use. Hence, for Amazon and Hermes, it is crucial that the AI systems are easy to use and the benefits obtained from using them are tangible. This means not only the development of new technologies but also the hiring of new workforce and retraining current workers to cope with the new AI systems’ interface.

Strategic Recommendations for Addressing Digital Disruption

To effectively manage the challenges posed by digital disruption, both Amazon and Hermes should implement the following strategic recommendations:

• Enhance AI Governance and Ethics: Thus, both companies have to develop clear AI governance guidelines that would cover ethical issues, such as bias, and legal requirements. Thus, they can avoid the potential issues connected with privacy, security, and fairness by implementing ethical AI principles and by being open about the data used.
• Invest in AI Innovation and Infrastructure: It is imperative to continue with the investments in AI infrastructure. Amazon should concentrate on improving its stock control AI while Hermes should leverage AI in logistics to come up with efficient routes that also cut down on emissions. Both should also focus on developing their employees to work on such complex and sophisticated systems. (Pallathadka, Singh and Sharma, 2023).
• Diversify and Differentiate Services: First, Hermes should pay attention to its logistics services in which the company should provide various sustainable logistic services and premium delivery services. Nevertheless, Amazon has AI support that can help it design performance that is even more tailored to the specific consumers’ needs and this may be its major competitive advantage.

Conclusion

Both Amazon and Hermes must take a strategic approach to integrating AI to be able to cope with the challenges that digital disruption brings to sustain competitive advantage.

References

• Abbasimehr, H., Shabani, M. and Yousefi, M. (2020) 'Demand forecasting in the retail sector using AI-based models', Journal of Retailing and Consumer Services, 55, pp. 1-12.
• Albayrak, T., Sancar, A., and Karasoy, A. (2023) 'AI in Retail: Enhancing Inventory Management and Customer Service', Journal of Business Research, 136, pp. 152-160.
• Amoako, G.K., Dzogbenuku, R.K. and Kumi, D.K. (2021) 'Artificial Intelligence for Customer Experience and Competitive Advantage: A Study of Amazon', International Journal of Retail & Distribution Management, 49(4), pp. 500-519.
• Bharadiya, V., Ahuja, M. and Kothari, A. (2023) 'Competitive Advantage Through AI in Retail: A Case Study of Amazon', Journal of Business Strategy, 44(1), pp. 66-79.
• Gil-Gomez, H., Guerola-Navarro, V., Oltra-Badenes, R. and Lozano-Quilis, J.A. (2020) 'Customer Relationship Management: Digital and AI Transformation in Retailing', Journal of Business & Industrial Marketing, 35(3), pp. 547-559.
• Huberman, M. (2021) 'AI and Retail Supply Chain Management: Amazon's Success', Supply Chain Management Review, 19(2), pp. 112-129.
• Kulal, A., Singh, J. and Gupta, R. (2024) 'Leveraging AI for Enhancing Customer Experience in Retail', Journal of Marketing Management, 40(6), pp. 705-721.
• Morandini, M., Bellini, F. and Gatti, M. (2023) 'Artificial Intelligence in Retail: Impacts on Business Processes and Customer Experience', Journal of Retailing and Consumer Services, 67, pp. 1-14.
• Musa, A., Belk, R. and Chai, A. (2024) 'Technology Acceptance Model and AI in Retail: A Case of Amazon Go', Journal of Consumer Behaviour, 23(1), pp. 90-103.
• Pallathadka, H., Singh, P. and Sharma, S. (2023) 'AI-Driven Supply Chain Optimization in Retail', Journal of Operations Management, 62, pp. 89-99.