There have only been a handful of revolutions in human history that have significantly altered the way we do business. The industrial revolution laid the foundation stone for modern manufacturing and automation procedures. However, today the industrial revolution is being dwarfed by the digital revolution.
Emerging digital businesses and transformations are prime examples and indicators of what this revolution can achieve. With the network of connected devices increasing exponentially with time, humans are devising ways in which this can be used to increase effectiveness of business processes.
Digital business is not a new term, but it is one that is widely misunderstood. Many people are confused about what a digital business is and how it operates. This article sheds light on some of the basic aspects of a digital business.
What is a Digital Business?
A digital business is a model that dissolves the lines of differentiation between digital and physical elements of a business. It creates seamless integration between the two so that they function effectively, as coordinated team members share information rapidly amongst each other.
There are two main definitions that are provided by marketing experts with respect to digital businesses. According to Gartner; “a digital business is the creation of new value chains and business opportunities that traditional businesses cannot offer.” McKinsey on the other hand explains it in the following words; “digital should be seen less as a thing and more as a way of doing things.”
Digital Businesses, eCommerce and the Internet of Things
This is the area where the concept of a digital business becomes confusing to many. The concept and implementation of digital businesses is quite different when compared to eCommerce and the Internet of Things (IoT).
eCommerce and IoT rely entirely on digital technologies with little or no integration with the physical world. A digital business, on the other hand, involves close coordination of things and people so that operations can be streamlined, and productivity increased.
For instance, an example of a digital business could be advanced computer systems installed in vehicles, which at the time of a crash could analyze the health and extent of injuries suffered by the occupants as well as the damage to the car. This information can immediately be sent to emergency services as well as the insurance company so that they can ascertain the future state of the policy and how they’ll have to proceed with the case.
Elements of a Digital Business
It is estimated that by 2020, there will be 30 billion devices all over the world connected to the Internet. This shows the extent of connectivity and how digital businesses will impact the overall landscape of trade operations and transactions between people and things. The common elements of a digital business include the following:
- It involves the exploration of new business models that involve faster and more efficient interaction between humans and digital technologies
- It indicates the need to accept the importance of digital transformation. With the growth of digital technologies, traditional businesses will require restructuring, to accommodate these changes
In the end, it is important to know the idea behind digital businesses so that when these systems begin to flourish, it is easier to come up to speed with them.