BMG738 Digital Transformation
BMG738 Digital Transformation
Introduction
The procedure by companies that integrate innovations to bring about substantial shifts is known as digital transformation. This is fundamental since technology boosts productivity and flexibility, which in return brings new and novel possibilities for generating value for customers, stakeholders, and workforce. The following assessment has been persistent on analysing the context of digital transformation while focusing on Walmart as the chosen organisation. Through this study, the organisation would be critically evaluated while focusing on the related changes and behavioural, social, and ethical perspectives within the context of literature understanding. Other than this, an appropriate understanding regarding the evolution of the digital technology used in the organisation would be evaluated with evidence and justification. Furthermore, 3 future digital challenges and opportunities will be identified referring to Walmart with a recommendation that would impact the entire digital performance of the organisation. In addition, a brief reflection will be presented that would impact the entire understanding and learning that has been experienced during the following module.
Evaluation of digital technology usage over time
Organisational overview
Walmart is a global retail company that runs a network of department stores, supermarkets, and hypermarkets. The organisation has grown both domestically and abroad establishing thousands of new locations (Walmart, 2023). Besides this, the organisation is using innovation to create seamless online and in-store shopping experiences for customers at all locations. Throughout the world, they are generating opportunities and adding value for their customers and local community (Walmart, 2023). This has impacted the entire market capitalisation of the organisation, as mentioned in Figure 1.
The organisation has gained a total worth of $414.71 billion with a growth of 8.46% in 2023 (Companies Market Cap, 2023) (Refer to appendix 1). In addition, the organisation has 10,500 shops and clubs in 19 countries while running 2.1 million associates globally including 1.6 million in the US alone (Walmart, 2023).
Literature review
Concept of digital transformation
As identified in the research of Verina and Titko (2019), little transformation is a trendy term in the academic aspect. During the fourth industrial revolution, every industry is being digitised including education, business, retail, banking, government, and manufacturing.
In this context, the emergence of growing significance in new digital technology, for example, as suggested in the findings of Verina and Titko, (2019) big data, mobile devices, social media, software, and analytics. All of these have increased the pressure on businesses to align their business strategies with the changes in the technology environment, the competitive landscape, consumer behaviour expectations, business practices, and the production of delivery of goods (Tomičić Furjan et al. 2020). This has been significantly transformed due to the technology integration in the businesses that have drastically altered the entire business function.
Consequently, as identified by Proskurnina et al. (2023), the approach of an omnichannel strategy is the digitalised approach that has been the catalyst for developing the “smart trade” aspect in the retail industry. It can be stated that digitalisation in an organisation matters the most in the business, as it can lead to a long-term consumer behaviour understanding with increased operational efficiency and better profit growth with sustainable context and approaches.
Digital transformation strategy development
As per the studies of Li et al. (2021), digital transformation strategy development is noted to involve alignment of organisational goals with technology in order to enhance efficiency and competitiveness in the market. It focuses on assessing current processes, identifying technology solutions and fostering a culture conducive to innovation. Thereby, the strategy aims to leverage digital tools for improved customer experience and streamline operation operational activities in order to improve the overall service, providing capabilities of an organisational management. Besides, successful implementation of digital transformation strategy is noted to require leadership commitments, employee training, and continuous adoption of emerging technologies in the market (Kazim, 2019). It helps in ensuring sustained growth and relevance in the rapidly evolving digital landscape.
As referred to in the above figure, Technology Acceptance Model (TAM) is noted to assess user adoption of technology by successfully emphasising pre-received ease of use and usefulness (Mustafa and Garcia, 2021). The theory of TAM mainly focuses on identifying users’ attitude in influencing their intention to use a particular technical tool. Hence, the model has been significant in understanding and predicting acceptance of technology across different domains. TAM developing a digital transformation plan entails recognising and resolving people’ attitudes towards technology change (Park et al. 2022). TAM highlights apparent utility and ease of use as critical elements affecting technology adoption. Thus, to advance user acceptability in digital transformation, organisations need to be assured that the changes that are being offered are in line with the TAM principles. Organisational management can assess thoroughly their current course to develop an effectual plan, considering the aptitudes through which digital technologies may facilitate in enhancing productivity as well as user experiences (Park et al. 2022). During this phase, TAM’s prominence on user perceptions turns out to be even more crucial, as strategies must highlight the constructive benefits of the digital developments and offer priority to ease of use.
In agreement to Jayawardena et al. (2020) leadership is one of the principal components while driving digital transformation, which is in line with TAM’s theory that consumers’ attitudes are constructively influenced by perceived organisational support. Moreover, a key component of TAM, continuous feedback loops are obligatory for optimising digital strategy in light of shifting technology environments and user experiences. Thus, by maintaining invariable alignment with user perceptions, this iterative process maximises the accomplishment of digital transformation projects.
Digital response to industry changes
Walmart has established a dynamic response to market movements by efficiently using digital technologies to adjust to transformations in the retail business (Mancuso et al. 2023). As organisational operations have changed over time, the corporation has espoused a number of technology efforts to stay competitive, develop client experiences, and amplify operational efficiency. Thus, it can be evident that these digital changes do conversely have consequences for behaviour, society, and ethics. Walmart has changed its approach to employ digital technologies in response to shifting customer demands. Walmart has been able to curtail stockouts and lessen excess inventory by optimising supply chain operations via the use of contemporary inventory management systems and data analytics (Aishwarya Lakshmi et al. 2023). Therefore, by reducing waste, this amplifies overall productivity and supports environmental initiatives. Within the e-commerce space, Walmart has advanced significantly. Walmart has established itself as a significant player in the digital retail business through the purchase of online shops, the creation of a strong online marketplace, and investments in user-friendly websites (Taherdoost, 2023). This action improves customer convenience, but it also brings up moral concerns about fair competition and the effects on neighbourhood businesses. In order to sustain a balance between digital development and bolstering local economies, the corporation needs to carefully manage these concerns. Better accuracy and transparency are achieved by Walmart’s use of technology such as RFID (Radio-Frequency Identification) for inventory tracking (Fenik et al. 2020). Therefore, in order to ensure ethical usage and preserve customer privacy, a commitment to strong data protection procedures is necessary given the large-scale collecting of client data for personalised marketing and operational optimisation.
The workforce will be impacted by the management’s concentration on automation, which includes the employment of robotics for jobs like order fulfilment and inventory management (Flechsig et al. 2022). Automation can increase productivity, but it also creates worries about job loss. Walmart has to take the initiative to solve these problems by funding programmes that re-skill employees and establishing career paths in the rapidly changing digital industry (Fenlon and Fitzgerald, 2021). Employing recommendation engines and dynamic pricing, Walmart’s machine learning (ML) and artificial intelligence (AI) projects help to provide individualised consumer experiences (Schrotenboer, 2019).
Ethical, social or behavioural implications associated with organisational digitisation
Digitizations in organisations are eminent to bring forth ethical, social and behavioural implications that contours its impact on individuals along with organisational culture (Isensee et al. 2020). In reference to the ethical factor, issues such as data privacy as well as security could arise by the implementation of digital transformation within an organisational management (Manita et al. 2020). Therefore, gathering, storing, and using a large amount of data set can raise questions regarding management capability of the organization to handle sensitive data. Therefore, maintaining an adequate balance between data leveraging for innovation and protecting individuals privacy becomes a vital ethical consideration. As per the social factor, advantages can be obtained from digitalisation in worsening existing disparities among the organisational management (Amankwah-Amoah et al. 2021). It allows accessibility to digital tools and variance in skill variance that could possibly help every group member within the management to be valued. Artificial Intelligence (AI) and automation have also sparked debate regarding job displacement and the necessity of labour re-skilling. Espousing digital procedure may have behavioural effects on workers’ well-being. Enhanced connectedness may generate setbacks like burnout by making it harder to settle on between work and personal life. The two further concerns are transparency and accountability that are brought up by organisational digitization (Mynenko and Liulov, 2020). There may be a lack of transparency when algorithms are used in decision-making courses, which raises questions about prejudice and discrimination. In the digital age, it is crucial to guarantee that these algorithms are just and responsible. It appears that organisational digitization raises ethical questions about data protection, social issues about inclusion and job displacement, and behavioural issues about interpersonal dynamics and work-life balance (Lilja, 2020). An inclusive strategy that places a high priority on social responsibility, ethical behaviour, and creating a superior digital culture inside businesses is needed to deal with these problems. Hence, by doing this, businesses may maintain justice, fairness, and worker well-being while navigating the challenges posed by digitization.
Identify the top 3 future digital challenges/opportunities
Future digital challenges
Through the support of digital transformation, a company has the opportunity of completely reaching how to operate using digital tools and processes in the existing marketplace (Zaki, 2019). With outstanding advantages, aspects, and growth, the digital transformation process, thus, comes up with significant challenges, for example, a shortage of technological resources, and increased security.
Issues with skilled workforce
Poorly skilled employees can influence the entire digitalisation purpose of an organisation (Balsmeier and Woerter, 2019). Regarding this, there is a misconception that technological information can only offer advantages, however, there are issues and challenges that exist in the marketplace, and the shortage of skilled individuals is one of the most evident challenges for organisations to come up with solutions with digital transformations. For evidence, it has been identified that 81% of organisations admitted that they have a deficiency in power user or developer technical skills (EY, 2023).
Additionally, only 19% of organisations claim to have created the talent taxonomy but 43% have carried out employee-level skill benchmarking (EY, 2023). Besides, an organisational culture that is risk-averse stifles change and obstructs expansion advancement (Bluestein et al. 2023). New technology option is met with resistance from C-level executives to staff members. Regarding this, the increased roles and duties that accompany digital transformation may cause issues for employees.
Increased security risks
In response to an abrupt shift in customer needs a lot of businesses hurriedly adopted digital solutions (Jones et al. 2021). They were exposed to higher cyber security risks due to this concern. This also scared other companies from having the same security vulnerabilities while launching their projects. It has been identified that the retail sector had more attacks than any other industry and accounts for 24% of all events in 2022 with 629 confirmed incidents and 241 breaches (Mohammad, 2023). Furthermore, the average price of retail data breaches has increased to $3.28 million (Mohammad, 2023). Besides this, ransomware attacks affected 77% of retail businesses in 2021 compared to 44% in 2020 (Mohammad, 2023). Additionally, the retail industry saw 629 events of which 98% had a financial motivation, which has led to company losses in 89% of cases (Mohammad, 2023).
Digital opportunities
Digital transformation is the new normal and it has been considered very well by organisations. Even though most retail purchases are done in the physical store frequently with cash, the bulk of significant advertisement campaigns in this sector (Silva et al. 2020). This has included the prospect of digitalisation and transformation that offers opportunities in terms of sustainability, competitive growth, and numerous aspects.
Drive sustainability
Retailers are now managing the operations, environmental initiative, and supply chain differently while focusing on engaging with customers with appropriate assistance of digital transformation (Creazza et al. 2022). Within the dynamic realm of digital transformation and several critical technologies transforming entire sectors that are radically changing how businesses function and engage with their consumers while improving business procedures. Within the dynamic aspect, there are numerous key technologies, for instance, artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), blockchain, big data analytics, cloud computing, augmented reality (AR), and virtual reality (VR), and significant others (Rane et al. 2023).
With a market valuation of $5.79 billion in 2021, the global AI in the retail market is having a growth of 23.9% between 2022 to 2030 (Grand View Research, 2023). With the necessity of monitoring and surveillance in physical stores along with an ever-increasing number of internet users, the digital transformation in the retail Industry has significantly improved. Even, with the support of these digital transformations, organisations are being able to address consumer requirements and needs while offering them the essence of a better experience and digitalised operation (Grand View Research, 2023).
Critical appraisal
Evaluation criteria
Rising emission and the context of global wastage has been crucial challenges in the retail industry (Refer to appendix 2). Therefore, technologies are working as the key context in terms of preventing these issues majorly. To comprehend the context of innovative technology, which is increasingly important for responding to organisational practices and educating practitioners about how to have a better relationship with human behaviour and systems, the technology acceptance model, or TAM, can be aligned.
In light of that, one of the factors that contribute most consistently to an improved comprehension of innovative technology is perceived ease of use, which suggests acceptance with significant practical value and favourably links the stated objective with a favourable assessment of technological productivity (Granić and Marangunić, 2019). Walmart would therefore be able to enhance its business environment while greatly adjusting technology in this context. Retailers would be able to lessen their carbon footprint by implementing energy-efficient practices while streamlining their supply chain and making data-driven decisions with digital transformation (Wahab and Nor, 2023). Walmart would be able to prevent transportation emissions while reducing unnecessary packaging in the supply chain through data analysis and real-time monitoring of energy efficiency. Heating, lighting systems, and cooling are made possible by Smart Technologies and Internet of Things sensors, which reduce energy utilisations.
On the other hand, the moral ramifications of algorithmic decision-making are highlighted, especially in light of potential biases. In order to maintain equity and avoid biased results, Walmart ensures that its algorithms are transparent and actively works to reduce biases (Iansiti and Lakhani, 2020). Walmart’s digital initiatives impact the societal sphere in both urban and rural communities. Walmart seems committed to doing business ethically, which includes addressing these social issues, strengthening local economies, and lessening adverse effects on society as a whole. Walmart’s digital transformation has an impact on customers’ behaviour while interacting with the company (Ferrell et al. 2020). In order to sustain the distinctive elements of its customer experience, Walmart must strike a balance between digital and in-person encounters because of the move to online platforms.
Walmart would be able to have a data-driven insight when it comes to sustainable practices such as eco-friendly products, sourcing, and designing. It has been identified that Walmart has been accused of greenwashing its household brands and misleading consumers about the use of rayon and bamboo (Pellegrino, 2023). However, the company announced Project Gigaton in 2017 to focus on sustainable aspects, on the contrary, the company itself has unsustainable prospects in the organisation (Pellegrino, 2023). Hence, by embracing digital transformations, organisations would be able to have a prospect of environmental benefits that can improve brand presence along with attracting eco-aware consumers.
Recommendations
Based on the challenges, it is advisable for Walmart management to implement multiple approaches to tackle the problems. First, it can be recommended to Walmart to spend money on thorough employee training and upskilling programmes to provide workers the digital skills they need to adapt to changing positions in a tech-driven workplace. In order to render training accessible, it can be recommended to the management to work with educational institutions and take advantage of online learning resources. Moreover, it might be suggested that Walmart’s management give strong cybersecurity measures top priority in order to reduce security concerns.
It is recommended that Walmart’s management boost efforts in renewable energy adoption and supply chain transparency for sustainability. For example, set aggressive targets for lowering carbon emissions, investing in renewable energy sources for operations, and encouraging suppliers to use sustainable practices (Khan et al. 2020). Hence, it can be recommended to adopt circular economy principles, such as waste reduction and recycling activities. Additionally, to meet rising customer expectations, emphasise sustainable product sourcing and eco-friendly packaging.
Conclusions
Based on the above findings, it can be concluded that Walmart’s smart use of digital technology has increased its worldwide retail reach and market value. The adoption of digital tools such as Artificial Intelligence (AI) and machine learning has optimised supply chains, improved consumer experiences, and increased online retail capabilities. This transition, however, brings with it ethical concerns such as data privacy, societal ramifications for inclusion and job displacement, and behavioural repercussions on employee well-being. Hence, Walmart must prioritise openness, engage in staff training, and commit to sustainable practices in order to overcome these hurdles.
References
Aishwarya Lakshmi, S., Keerthana, R. and Pradeep, S., (2023). The Use of Artificial Intelligence in Addressing Inventory Management Challenges in Manufacturing Industry. European Economic Letters (EEL), 13(4), pp.517-533.
Amankwah-Amoah, J., Khan, Z., Wood, G. and Knight, G., (2021). COVID-19 and digitalization: The great acceleration. Journal of business research, 136, pp.602-611.
Balsmeier, B. and Woerter, M., (2019). Is this time different? How digitalization influences job creation and destruction. Research policy, 48(8), p.103765.
Bluestein, B.W., Templeman, M.A. and Gruber, C.W., (2023). Innovation in the National Security Arena. In Fostering Innovation in the Intelligence Community: Scientifically-Informed Solutions to Combat a Dynamic Threat Environment (pp. 19-36). Cham: Springer International Publishing.
CBInsights, (2020). The State Of Sustainability In Consumer & Retail: Ahead In 2021. [Online]. Available at: https://www.cbinsights.com/research/report/sustainability-tech-consumer-retail-trends-2021/ [Accessed on 4 December 2023]
Companies Market Cap, (2023). Market capitalization of Walmart (WMT). [Online]. Available at: https://companiesmarketcap.com/walmart/marketcap/ [Accessed on 4 December 2023]
Creazza, A., Colicchia, C., Spiezia, S. and Dallari, F., (2022). Who cares? Supply chain managers’ perceptions regarding cyber supply chain risk management in the digital transformation era. Supply Chain Management: An International Journal, 27(1), pp.30-53.
EY, (2023). An Overwhelming Majority Of 81% Organizations Are Experiencing a Shortage in Skilled Tech Workers: EY and iMocha report. [Online]. Available at: https://www.ey.com/en_in/news/2023/05/an-overwhelming-majority-of-81-percent-organizations-are-experiencing-a-shortage-in-skilled-tech-workers [Accessed on 4 December 2023]
Fenik, A.P., Mackie, M.M., Allman, H.F. and Keller, S., (2020). No More Missing Inventory: Blockchain and RFID Technology Applications within the Retail Inventory Management System. Journal of Transportation Management, 30(2), p.4.
Fenlon, M.J. and Fitzgerald, B.K., (2021). Creating the future workforce today. Business-Higher Education Forum, Washington, District of Columbia.
Ferrell, O.C., Thorne, D.M. and Ferrell, L., (2020). Business & society: A strategic approach to social responsibility & ethics. SAGE Publications.
Flechsig, C., Anslinger, F. and Lasch, R., (2022). Robotic Process Automation in purchasing and supply management: A multiple case study on potentials, barriers, and implementation. Journal of Purchasing and Supply Management, 28(1), p.100718.
Grand View Research, (2023). AI In Retail Market Size, Share & Trends Analysis Report By Component, By Technology (Chatbots, Natural Language Processing), By Sales Channel, By Application, By Region, And Segment Forecasts, 2022 – 2030.https://www.grandviewresearch.com/industry-analysis/ai-retail-market-report
Granić, A. and Marangunić, N., (2019). Technology acceptance model in educational context: A systematic literature review. British Journal of Educational Technology, 50(5), pp.2572-2593.
Iansiti, M. and Lakhani, K.R., (2020). Competing in the age of AI: Strategy and leadership when algorithms and networks run the world. Harvard Business Press.
Isensee, C., Teuteberg, F., Griese, K.M. and Topi, C., (2020). The relationship between organizational culture, sustainability, and digitalization in SMEs: A systematic review. Journal of Cleaner Production, 275, p.122944.
Jayawardena, C., Ahmad, A. and Jaharadak, A.A., (2020). The leadership and technology acceptance perspective of digital transformation in Sri Lankan hotels: A pilot study. Solid State Technology, 63(2s), pp.3782-3801.
Jones, M.D., Hutcheson, S. and Camba, J.D., (2021). Past, present, and future barriers to digital transformation in manufacturing: A review. Journal of Manufacturing Systems, 60, pp.936-948.
Kazim, F.A., (2019). Digital transformation and leadership style: a multiple case study. The ISM journal of international business, 3(1), pp.24-33.
Khan, S.A.R., Zhang, Y. and Nathaniel, S., (2020). Green supply chain performance and environmental sustainability: A panel study. LogForum, 16(1), pp.141-159.
Li, H., Wu, Y., Cao, D. and Wang, Y., (2021). Organizational mindfulness towards digital transformation as a prerequisite of information processing capability to achieve market agility. Journal of Business research, 122, pp.700-712.
Lilja, J., (2020). Digitalisation and well-being at work: Understanding work transformation and the role of acceptance through thematic narrative analysis (Master’s thesis).
Mancuso, I., Petruzzelli, A.M. and Panniello, U., (2023). Innovating agri-food business models after the Covid-19 pandemic: The impact of digital technologies on the value creation and value capture mechanisms. Technological Forecasting and Social Change, 190, p.122404.
Manita, R., Elommal, N., Baudier, P. and Hikkerova, L., (2020). The digital transformation of external audit and its impact on corporate governance. Technological Forecasting and Social Change, 150, p.119751.
Mohammad, Y., (2023). 10+ Retail Cybersecurity Statistics (Latest Data & Numbers). [Online]. Available at: https://www.onlinedasher.com/retail-cybersecurity-statistics/ [Accessed on 4 December 2023]
Mustafa, A.S. and Garcia, M.B., (2021), November. Theories integrated with technology acceptance model (TAM) in online learning acceptance and continuance intention: A systematic review. In 2021 1st Conference on online teaching for mobile education (OT4ME) (pp. 68-72). IEEE.
Mynenko, S.V. and Liulov, O.V., (2022). The Impact of Digitalization on the Transparency of Public Authorities.
Park, E.S. and Park, M.S., (2020). Factors of the technology acceptance model for construction IT. Applied Sciences, 10(22), p.8299.
Park, I., Kim, D., Moon, J., Kim, S., Kang, Y. and Bae, S., (2022). Searching for new technology acceptance model under social context: analyzing the determinants of acceptance of intelligent information technology in digital transformation and implications for the requisites of digital sustainability. Sustainability, 14(1), p.579.
Pellegrino, S., (2023). Explainer: Household brands accused of greenwashing. [Online]. Available at: https://capitalmonitor.ai/sector/consumer/explainer-household-brands-accused-of-greenwashing/ [Accessed on 4 December 2023]
Proskurnina, N.V., Shtal, T.V., Slavuta, O.I., Serogina, D.O. and Bohuslavskyi, V.V., (2021). Omnichannel Strategy of digital transformation of retail trade enterprise: From concept to implementation. Studies of Applied Economics, 39(6).
Rane, N., Choudhary, S. and Rane, J., (2023). Enhanced product design and development using Artificial Intelligence (AI), Virtual Reality (VR), Augmented Reality (AR), 4D/5D/6D Printing, Internet of Things (IoT), and blockchain: A review. Virtual Reality (VR), Augmented Reality (AR) D, 4.
Schrotenboer, D.W., (2019). The impact of artificial intelligence along the customer journey: a systematic literature review.
Silva, E.S., Hassani, H. and Madsen, D.Ø., (2020). Big Data in fashion: transforming the retail sector. Journal of Business Strategy, 41(4), pp.21-27.
Taherdoost, H., (2023). Evolution and Applications of the Internet in E-Business. In E-Business Essentials: Building a Successful Online Enterprise (pp. 77-103). Cham: Springer Nature Switzerland.
Tomičić Furjan, M., Tomičić-Pupek, K. and Pihir, I., (2020). Understanding digital transformation initiatives: Case studies analysis. Business Systems Research: International journal of the Society for Advancing Innovation and Research in Economy, 11(1), pp.125-141.
Verina, N. and Titko, J., (2019), May. Digital transformation: conceptual framework. In Proc. of the Int. Scientific Conference “Contemporary Issues in Business, Management and Economics Engineering (pp. 9-10).
Wahab, N.A.B.A. and Nor, R.B.M., (2023). The Role of Enterprise Resource Planning (ERP) Systems in Facilitating Sustainable Business Practices. AI, IoT and the Fourth Industrial Revolution Review, 13(9), pp.29-39.
Walmart, (2023). About. [Online]. Available at: https://corporate.walmart.com/about [Accessed on 4 December 2023]
Zaki, M., (2019). Digital transformation: harnessing digital technologies for the next generation of services. Journal of Services Marketing, 33(4), pp.429-435.
Know more about UniqueSubmission’s other writing services:
