Cognitive Computing in Retail

This report analyzes the implementation of cognitive computing in the Australian retail sector, focusing on Woolworths and Coles. It examines how these companies are using AI to address challenges in business process management, improve customer experience, and enhance operational efficiency. The report also discusses the challenges and opportunities associated with cognitive computing in retail.

Research Report

Contents
INTRODUCTION...........................................................................................................................1
BODY..............................................................................................................................................1
Business Process Management (BPM) with Cognitive Computing.......................................1
Woolworths and Artificial intelligence..................................................................................5
Coles and Cognitive Computing............................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business Process Management (BPM) has seen a significant transformation over last
some decades. BPM is a discipline of operations management which is aimed at significantly
managing the business processes and activities in order to ensure efficiency of operations and
high speed performance. Some of the techniques that are widely used by business entities so as
to ensure effectiveness and efficiency across all the activities and processes of organisation are
machine learning, cognitive computing (inclusive of Artificial Intelligence), Language
Processing, Retention Learning etc. This research paper is based upon Woolworths Supermarkets
which is an Australian grocery store chain which is owned and run by Woolworths Limited and
was found in 1924.This organisation possesses specialisation in product segments such as sale of
groceries (packaged food, vegetables, meat, fruits etc.), DVDs, stationery items, magazines,
household products, health & beauty products and pet and baby supplies. At present this
organisation is operating across around 1000 stores within Australia inclusive of 976
Supermarkets as well as 19 convenience outlets. The organisation also has an online presence
with the name of Woolworths Online (at Woolworths.com.au) which is basically a “click &
collect” and home shopping delivery service which was originally renowned as "HomeShop".
This company is implementing Artificial Intelligence (part of Cognitive Computing). The
purpose of this research is to take into the process of Artificial Intelligence and its
implementation across the organisational premises with a view to look into the issues of business
process management that this technique possesses the ability to create solutions for.
BODY
Business Process Management (BPM) with Cognitive Computing
Business process management refers to the process in which companies mainly evaluates,
develops, edits and predicts overall process that will help company in enhancing business
growth. It can be seen as the process or sequence of tasks that are essential for company to
perform in order to attain their business objectives in effective manner. This can be well
understood with the help of example i.e., Goods which are purchased by customers are result of
various business processes that are executed or completed by different business companies.
According to the thoughts presented by Storey and Song (2017), it can be said that business
process is neither related to task management nor its a part of project management. The author
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have further represented that Business process management (BPM) is mainly centric towards
ongoing and repetitive processes which basically follows process management and predictable
pattern. An effective usage of business process management is helpful for company in enhancing
their productivity, consumes less time in execution of work, reduces chances of mismanagement,
motivates employees, manages documentation in company and many other works.
It can be said that if an organisation is having good business process management then it
is helpful for them in sustaining longer at market place and raise their profit margins with
minimal issues or conflicts. With the changing time, it has been realised if business processes are
not managed in effective manner then it might develop vast range of problems for company.
Some of its main problems and issues that are raised due to ineffective business process includes
no solution of problem as it is tool which can be used by employees to resolve problems,
deficiency of assignment of responsibilities, the process is too lengthy which might develop
situation of forgotness from employees side as they are not able to remember each and every step
of process. In order to overcome these issues or problems, top management of staff or other
authorised people of companies focus on adopting other technology for the purpose of reducing
its effect on business growth of companies. Cognitive technology is considered as the best
technology which ultimately helps companies in overcoming negative impact of ineffective
business process execution at workplace. This technology basically helps companies by
replacing work of human being with robots. These technologically updated robots are fully
programmed and own capability of performing similar kind of work like human based
employees in order to reduce chances of mistakes that are conducted by them.
In today's era where technology is completely transformed, the role of cognitive
computing is very important and necessary to make the business process management more
effective and productive. As per the views of Glykas (2013), this is a kind of system which uses
computerized models in order to stimulate a level of human cognition process to find effective
solution in very critical and complex situation. It refers to new software or hardware which
imitates functions of human brain and thereby assists in improvisation of decision making.
Basically, it is a scientific discipline which is based on signal processing and artificial
intelligence. It aggregates speech, vision, natural language processing, human computer
interaction, reasoning and machine learning. Furthermore, it makes use of adaptive page displays
and data analysis by which content can be adjusted as per specific person. It was designed to
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respond to critical conditions which are characterized by vagueness and have impact on business,
healthcare, etc. These systems have both unstructured as well as structured data by which they
have capability to render expert assistance and deep domain insight. These systems have
formulated engagement model which furnish contextual relationship between entities. Moreover,
they also possess decision making abilities for which modelled reinforcement learning has been
utilized. These decisions are dependent actions, results and new information which have been
acquired. Example of this is IBM Watson which is used mainly in healthcare. This system
collects information about patients related with their history and diagnosis, thereby makes
decision by decreasing manual work. Thus, cognitive computing tends to act as an effective
measure through which the business processes of an organisation can be effectively handled.
Some cognitive computing landscapes are: Microsoft Cognitive Services, IBM Watson,
Deepmind and many more are there. Watson is supercomputer which makes use of AI and
refined analytical software to have nominal performance based on questions and their answers.
For this Watson made use massive probabilistic processing techniques to reduce cost and have
optimal results (Schoenherr and Speier‐Pero, 2015). By making use of Microsoft Cognitive
Services, developers can have additional intelligent features like vision, speech recognition,
sentiment detection, knowledge, language understanding and emotions in specific application
like Chabot Specter by which efficiency can be improvised. Google Deepmind consisted of
reinforcement learning, neural networks and systems neuroscience inspired models. These are
some of the exemplary companies which have made use of cognitive computing as a system to
carry out the business process management with a view to ensure increased efficiencies and
higher performance across the organisational premises.
Though there are certain affirmative points but along with that there are some drawbacks
also. Cognitive systems are not able to analyze results due to unstructured data. Consider an
example to understand this aspect like if predictive model determine oil exploration location,
then they also need to analyze whether there is any kind of alteration made in government
policies. By this risk analysis can be done and appropriate decisions can be made. Another
drawback is that cognitive system needs to understand the entire process that means they need
training. That is the reason for its slow adoption. System needs review each single detail of
medical policies, for this staff gives the necessary input to system. This makes it more expensive
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and intricate. At present they are only used in assistance in intelligence augmentation rather than
artificial intelligence.
Issues of the cognitive computing: According to the David Kenny (2017), the goal of
cognitive computing is to transform human thought process in a computerized manner. Cognitive
technology has led tech industry from storm and gave new shape in business or working at an
optimized manner. This has created a kind of Buzzword among growing an entrepreneur and
tech enthusiast. Apart from major advantages of cognitive computing in human life, there are
several issue which are highly linked to cognitive computing in context of business process
management are as follows:-
Security: Cognitive computing uses to consider heavy level of security, as there is high
level of huge transform or sharing of data from one place to another or storing. In cognitive
computing, when any digital devices manage critical information, question mark of security
simply arises to protect any valid information or knowledge either valuable or matter
(Ottensooser and et. al., 2012). With a capability to handle a big level of data, cognitive
computing deals with huge cost and time to manage which is a big deal to be done.
Adoption: For business entities, adoption of cognitive computing is a biggest hurdle, as
this is why, because adopting any kind of technology involves bigger level of cost and time,
which will be threat for business process to enhance suitability of its working. As, this is a kind
of voluntary adoption. In order to make cognitive computing successful, this will be prominent to
create long term vision of how this level of technology can be processed to make better and
reliable (Hurwitz, J., Kaufman and et. al., 2015).
Change management: This is most crucial challenge for business process to work along
with this, as this requires consistent level of change to get its right use in given period of time
and saving major level of cost to be saved. This kind of technology majorly works over in Sync
with humans. Human beings are needs to coordinate with increasing scenario of cognitive
computing, as it is part of technology which in reality needs big efforts. This is why, technology
has needs to be initiated by human beings and maintain it for longer period of time and indulging
higher level of cost and tools & techniques to do so. Cognitive computing is the greater example
of human interaction with machine which has led people to accept greater level of change in
enhancing business operations at a greater or optimized stage.
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Also, development cycle of cognitive computing is lengthy, as it simply reason human
efforts to be incurred along with efforts which have no real value to be measured or ascertain for
its major benefits. In order to overcome crisis of cognitive computing, collaboration between
various stakeholder’s are necessary such as technology developers, enterprises who provides
support to this computing, government and individuals may lead to adoption process may be
streamlined (Loebbecke and Picot, 2015). Also, this will be prominent, if business enterprise
would start making certain level of budget related cost and time, in that condition its impact will
be fallen down to major productive level of working. Thus, conducting business process
management by way of cognitive computing can largely provide assistance to an organisation
provided that its limitations are taken into account and controlled by the management of
company so as to avail the desired outcomes.
Woolworths and Artificial intelligence
Woolworths is a Australian Supermarket that basically offers its products in retail stores
as well as on online sites too. The company is one among top leading company of Australia
which offers best products to its customers. It has been seen that working responsibilities of
Woolworth is much more expanded thus it is required by them to use effective business process
in order to remain competitive at market. But, as per observation, it has been realised that
currently the company is facing some issues related to in efficiency of business processes as its
employees are not able to remember all steps of whole process. Thus, it is required by the
company to focus on minimising this issue by adopting advance technology for remaining
competitive. In this regard, top management team of this company has finalised to adopt artificial
intelligence so that problems related to employee’s deficiency in execution of business process
could be tackled. In addition to this, it can be said that there are several problems which are
addressed by adopting artificial intelligence.
One of the main problems that have been frequently observed is related to in adequacy of
search engine. It is because; it does not provide search result to customers on the basis of
preferences. This ultimately dissatisfies customers as they feel that they are not able to approach
products which are being searched by them during their visit. Along with this, it has been further
seen that customers of Woolworths personally feels that their alignment with presentation is not
at all good. Behind this thought, these customers have said that they thinks quality of actual
tangible product and online represented product is varying which simply dissatisfy customers
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and also influences them to switch to another brand. Thus, it can be said that with the usage of
Artificial intelligence Woolworth can improvise its search process by providing facility of
personalised search to customers so that they can get better results. It will also show results
customers on the basis of their previous search or transaction (Kelly, 2015). On the basis of this,
it can be said that by adopting Artificial intelligence, Woolworths can improve its business
process and provide better satisfaction to customers and embrace their experience with the
company. It will ultimately contribute in providing sustainable growth to company with better
range of revenue. As a result, profitability of company will also be improved with the usage of
artificial intelligence.
Artificial intelligence can be used to resolve the problems and issues that are related to
logistics and delivery of a product of end consumer. AI acts as a one of the most crucial factor
which can be utilized on various set of parameters. With the help of AI Company can effectively
optimise the transactions which are made by their customers and further provide assistance to
organisations to increase their revenue generation capabilities. In addition to this, AI provide
strong assistance to companies to hire employees by short-listing them on the basis of pre-
programmed metrics that include, experience in sales, reasoning skills and previous work
experience (Woolworths looks to large-scale conversational AI, 2019). In addition to this
Artificial intelligence benefits Woolworths limited to effectively measure their consumer
retention rate and increase the same with the help of AI based forecast modelling. Company by
implementing data modelling module can easily compute their revenues and sales which are
earned by way of promotional events and discounts offerings. This means that the business
processes will be managed in a better and effective manner owing to the use of AI across the
organisational premises.
With the help of AI algorithm game and data modelling theory Woolworths can conduct
their decision making process in relation to distribution of income amongst local people, opening
of new stores and more. With the use of SCM technologies algorithmic company can utilize data
from machine learning in relation with distribution and inventory management to conduct their
sales forecasting in effective manner (Bernhard, Recker and Burton-Jones, 2013). AI can give
strong assistance to company by safeguarding their financial information on online relating, for
instance in the business process of billing purpose via credit card there is possible chances of
information getting comprised with sophisticated malware thus, artificial intelligence provide
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effective assistance in securing existing security measure. In this AI take advantage of multilevel
encryptions which helps in resisting unwanted programmes and malware to affect security
controlling system. With the formative expansion of machine based learning algorithm based
programs changing perceptions of consumers can be effectively undertaken via re there online
activity. AI with the help of reinforcement learning can effectively contributes in upgrading
Woolworths security profile sites with the help of increment in their degree of scrutiny on
suspicious functions on their network. Artificial Intelligence can effectively substitute human
shopping specialist through customizations in options related to products which is mainly based
on customer behavioural analytics, up- gradations in relation to emerging utilization trends and
sensitivity of group of individuals and individuals towards various range of product offered
(Nambisan and et. al., 2017). Thus, implementing and creating a different set of developing AI
can effectively benefit a company to safeguard their retail management, consumer relationship
management and supply chain management. AI has capability to protect these divisions from any
kind of malware. Thus, with the help of Deep learning, natural language processing and
reinforced learning Woolworth can imperatively increase their efficiency.
In order to implement AI technology there is a requirement of reconfiguration of metrics
which helps in facilitating resources related to AI in the site metrics (Helfat and Peteraf, 2015).
In the first stage, there is an alignment in between AI and online sites that effectively require
additional server’s sets installation which helps in accumulating add of random access memory.
Coles and Cognitive Computing
Coles Supermarkets Australia Pty Ltd commonly regarded as Coles is a retail
supermarket and customer services chain which is headquartered within Melbourne, Australia.
This organisation was found in 1914 and operates around 807 supermarkets across the country
with a number of presently re-branded BI-LO Supermarkets. Coles has employed around
100,000 employees across the nation and together with its biggest rival Woolworths accounts for
more than 80 per cent of the overall share in Australian market. This company's online shopping
('click & collect' and home delivery) service operates under the name of Coles Online and gives
tough competition to Woolworths (Mishra, Lin and Chang, 2015). Over years, it had been
ascertained that the sales of this organisation has been falling owing to the long delivery time
that this enterprise takes to deliver products. This reflects the inefficiency persisting within the
business process management of operations of entity. Owing to this, the owner of this company
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recognised the need to implement a technology with which the processes of enterprise can
significantly pick a rapid pace.
As per the point of view of Bernhard, Recker and Burton-Jones (2013), digital disruption
as well as the cognitive era is encouraging companies to reimagine their operational limits
delineating the already existing and traditional sectors which still make use of traditional
technologies. Cognitive computing and AI augment human abilities and provide assistance in
generating insights for companies to act in accordance with the dynamics of marketplace.
Authors and academicians are of the belief that enterprises are required to constantly reinvent
themselves by examining and evaluating the position of company with respect to rivals in the
presence of evolving ecosystems (Bosua and Venkitachalam, 2013). Looking forward towards
cognitive capabilities with a view to redefine traditional business offerings such as products,
processes and services from slow and inefficient systems to effective, modern and high tech
methods with the aim to give a boost to the organisational performance. Cognitive computing not
just support simplified, cost effective and improved mode of operations but also allow new types
of innovations to substantially expand the revenue opportunities. Cognitive computing possesses
the ability to gain an understanding of unstructured data such as blogs, imagery, natural
languages as well as sounds found in emails, images, tweets, books, audio and video files
(Arpaci, 2017). Nevertheless, cognitive systems can also ensure more informed actions and
interactions in order to resolve the barriers between humans and machines and to enhance the
Business Process Management (BPM).
Thus, to bring pace to its delivery systems and to ensure operational efficiency across the
organisational premises, Coles has planned to implement Cognitive Computing largely with the
aim to enhance the experience driven by customers and to ensure that people have access to
much better range of products sold by this company with increased freshness, additional delivery
windows and a website which will not at all be clunky to cause inconvenience to customers
(Welcome to supermarkets 3.0: Robots, AI and dark stores, 2019). The pace of deliveries will be
quick owing to the use of robots for this. This reflects that with the assistance of cognitive
computing, business process management within the company will become effective and
company would regain the revenues and profits lost as a result of inefficiency of business
processes.
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CONCLUSION
From the above report, it has been concluded that business process management is a key
aspect of every organisation which aims at utilisation of models to measures, analyse , optimise,
improve and automate the business process with a view to facilitate increased efficiencies across
the organisational premises. Also, it has been analysed that cognitive computing is an effective
technique that is adopted by a number of business organisations with an aim to increase the pace
of operations and provide assistance to the process of the human processes and human decision
making. However, it has been ascertained that this exceptional technique possesses a number of
key issues that are associated with its overall implementation and execution across the
organisational premises. One of the biggest challenges in this regard is the training that is
required to be provided to personnel so as to successfully execute the implementation of this
process and make effective use of this technique to pace up the existing speed of business
operations. Another key issue that is faced by organisations post the formulation of cognitive
computing is that this high end technology fails to take into account the risks associated with
cultural, political, socio-economic environments as well as rivals present within the industry.
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REFERENCES
Books and Journals
Glykas, M., 2013. Fuzzy cognitive strategic maps in business process performance
measurement. Expert Systems with Applications, 40(1), pp.1-14.
Schoenherr, T. and Speier‐Pero, C., 2015. Data science, predictive analytics, and big data in
supply chain management: Current state and future potential. Journal of Business
Logistics, 36(1), pp.120-132.
Ottensooser, A. and et. al., 2012. Making sense of business process descriptions: An
experimental comparison of graphical and textual notations. Journal of Systems and
Software, 85(3), pp.596-606.
Hurwitz, J., Kaufman, M., Bowles, A., Nugent, A., Kobielus, J.G. and Kowolenko, M.D.,
2015. Cognitive computing and big data analytics (p. 28). Hoboken: John Wiley &
Sons.
Loebbecke, C. and Picot, A., 2015. Reflections on societal and business model transformation
arising from digitization and big data analytics: A research agenda. The Journal of
Strategic Information Systems, 24(3), pp.149-157.
Bernhard, E., Recker, J. C. and Burton-Jones, A., 2013. Understanding the actualization of
affordances: A study in the process modeling context.
Nambisan, S., Lyytinen, K., Majchrzak, A. and Song, M., 2017. Digital innovation management:
Reinventing innovation management research in a digital world. Mis Quarterly, 41(1).
Helfat, C. E. and Peteraf, M. A., 2015. Managerial cognitive capabilities and the
microfoundations of dynamic capabilities. Strategic Management Journal, 36(6),
pp.831-850.
Kelly, J. E., 2015. Computing, cognition and the future of knowing. Whitepaper, IBM
Reseach, 2.
Arpaci, I., 2017. Antecedents and consequences of cloud computing adoption in education to
achieve knowledge management. Computers in Human Behavior, 70, pp.382-390.
Storey, V. C. and Song, I. Y., 2017. Big data technologies and management: What conceptual
modeling can do. Data & Knowledge Engineering, 108, pp.50-67.
Bosua, R. and Venkitachalam, K., 2013. Aligning strategies and processes in knowledge
management: a framework. Journal of Knowledge Management, 17(3), pp.331-346.
Mishra, N., Lin, C. C. and Chang, H. T., 2015. A cognitive adopted framework for IoT big-data
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Online
Woolworths looks to large-scale conversational AI. 2019. [Online]. Available
Through:<https://www.itnews.com.au/news/woolworths-looks-to-large-scale-
conversational-ai-518016>.
Welcome to supermarkets 3.0: Robots, AI and dark stores. 2019. [Online]. Available
Through:<https://www.smh.com.au/business/companies/welcome-to-supermarkets-3-0-
robots-ai-and-dark-stores-20190326-p517pq.html>.
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