Topic Name:
Effect of Digital Transformation on Business – Review of literature
Submitted by:
Prajakta D. Vispute.
Objectives:
To study the impacts of Digital Transformation on Business.
1. Introduction:
During 2019, the economic was affected by COVID-19, which affected not only the health and lives of people, but also caused a new economic crisis. All around the world measures to slow the spread of the virus were introduced, including the closure of public places and borders in order to minimize interaction between people. The quarantine restrictions particularly affected those sectors of the world economy, which were directly related to the service and human participation. But not all companies have suffered losses due to the pandemic. We observed that some companies didn’t affect much even if physical store was not accessible. The reasons was they adopted Social Media, Digital Marketing and E-commerce. Digital marketing has enabled companies from various industries to obtain real-time customer insights and create and communicate value to customers more effectively. The booming digitization and virtualization trends, which have gained a momentous thrust during the COVID-19 pandemic, affect all aspects of human life with unprecedented speed and at a global scale. Most of the business expanded their business digitally.
2. Research methodology:
The articles related to the problem have been taken from ProQuest peer reviewed journals. The articles are from India as well as other countries, the articles so reviewed have been put into pattern and generalized trends have been observed to find out what are the major impacts Digital Marketing on business.
3 Literature Review:
3.1 What is Digital Transformation?
Chun-Liang et al (2021) defines Digital transformation as a “systematic approach,” “highly complex” and a “company-wide endeavor” to implement digital technologies innovatively, “that can substantially shape a company and its operations”. They also says Digital transformation provides an organization with a chance to rethink customers’ values to gain competitive advantages and enhance the organization’s business performance. Digital transformation focuses on increasing harmony among organization business functions to generate improvement in products, services, and business models by adopting digital technologies as leverage.
3.2 Various Factors helping business to grow Digitally
3.2.1 Digital Currency
Civelek et al (2021) found out in their research that business are interested with using a digital currency and approve the usage of QR codes, bank and credit cards and direct transfers when making sales and purchases. Majority of analyzed firms are also agreed to give bonuses to their workers with these digital currencies. The respondents have also declared the fact that fees, depreciations in the currencies might be acceptable for them although they have different ideas regarding percentages in the depreciation and fees in the transactions when using these currencies.
3.2.2 Digital Marketing
Habib et al (2022) says the goal of digital media marketing is to encourage people to visit your website and then convert those visitors into prospective consumer. That is what web marketing is all about. It has the same set of goals, including establishing and growing brand awareness, building brand image, and influencing consumer-purchasing behavior.
Meshko et al (2020) says Digital marketing strategies using situational analysis of the digital environment, which will allow companies to increase sales even in such a complex and unpredictable time as the pandemic. The success is increasingly dependent on using the power of digital models to create new values and experiences. Accelerating the digital transformation of a business with a specific purpose is important for companies to survive and thrive in the new environment.
3.2.3 Chatbot in E-commerce
Illescas-Manzano et al (2021) says that the full implementation of the chatbot to help highlight the brand and offer a linked value proposition. The chatbot was implemented successfully, effectively fulfilling the assigned tasks. This provides a clear differentiating point from the competition, although a longitudinal analysis of chatbot behavior is necessary to fully understand the consequences at the level of brand positioning with this technology in order to obtain more conclusions in this regard.
3.2.4 Digitalization through E-Commerce
Li et al. (2018) studied the cross-border digital e-commerce service provider role in transforming the small and medium-sized enterprises in China. The results concluded that, though small and medium-sized enterprises initiated their digital transformation, the digital e-commerce service providers play a crucial role in the business success and sustainability through training, mentoring, and facilitating the SMEs.
3.2.5 Social media Marketing
Mason et al (2021) says social media offers a valuable tool to enhance a business’ brands through increased brand awareness and preference. This study examined Indian consumers because of the size and growth trends in India relative to other economies in the world. Effective use of social media is recommended for business marketing strategies.
3.2.6 Accounting information systems
Yoon, S. (2020) says Korean companies designing process of accounting information by combining Big Data technology and accounting AI in practice. For example, Web Cash, a fintech start-up, utilizes a system that can automatically collect transaction data and generate the firm’s financial statements. In the field of financial accounting and auditing, companies have already been developing and applying programs, such as Smart A, Gyeongninara, agreement and so on, that can understand corporate data through cognitive AI and Blockchain technology.
3.2.7 Smart Manufacturing
As per Araújo et al (2021) smart manufacturing involves a new generation of production systems that comprise advanced technologies, such as machinery connected to the Internet, to monitor the production process and improve its performance. A smart factory must include not only automation but also human–machine collaboration that together will improve operational efficiency. As the IoT is integrated into more machinery and networks, greater levels of automation can be achieved. However, in addition to the IoT, other technologies play an essential role in smart manufacturing, which include AI, machine learning, edge computing, predictive analytics, and digital twins.
3.2.8 Cloud Computing
Gharpure et al (2021) says cloud computing is the most cost effective, time-saving business technology solution available for business organizations of all sizes and scales. Cloud computing can reduce the cost through reduced administration and infrastructure cost and improved utilization. Digital transformation based on cloud computing can be the vehicle through which business operations can be transformed and long-term financial benefits can be stimulated for business firms.
4. Government to Enhance Digital Transformation
Chun-Liang et al (2021) says from a technology diffusion perspective, funding and resources are the main barriers to digital transformation in small service business. Small businesses require the government to provide funding programs to solve funding and resource problems. The government is also suggested to create a digital learning platform to enhance small service business’ digital capabilities. Moreover, small businesses must deal with human resource and technical problems to achieve digital transformation success.
5. Upper level implications:
The most important key message delivered by Kim et al (2021) is that digital transformation is the process that connects the analogue or physical and digital or virtual worlds, through which firms face changes in all innovation activities. There is a gap between firms depending on their individual characteristics in terms of how they perceive digital transformation and their views on the necessary capabilities and anticipated performance, and this gap may have a significant impact on firms digital transformation strategies and on the government’s digital transformation policies in the future. Therefore, firms must enhance their competencies on their own so that their size and industry type do not serve as handicaps, and the government must develop and apply policies that are suitable for each industry type and size to achieve the overall sustainability of firms.
Cheng et al (2021) also says traditional retailers to implement Internet market innovation and transformation projects. The results also have several implications relevant to the management of enterprises.
Conclusion:
This study found that business mostly apply digital transformation to enhance the customer experience, increase engagement, and collaborate with customers Digital transformation is a process that combines the digital technologies developed recently with long-existing analogue technologies. Therefore, it is necessary to take an approach in terms of technological convergence or systems instead of developing and adopting a single technology. Accelerating the digital transformation of a business with a specific purpose is important for companies to survive and thrive in the new environment.
References:
Araújo, N., Pacheco, V., & Costa, L. (2021). Smart additive manufacturing: The path to the digital value chain. Technologies, 9(4), 88. doi:http://dx.doi.org/10.3390/technologies9040088
Cheng, L., Gu, T., Chen, J., & Liu, Z. (2021). Will internet market newness improve performance? an empirical study on the internet market innovation of offline retailers in china. Sustainability, 13(22), 12619. doi:http://dx.doi.org/10.3390/su132212619
Chun-Liang, C., Yao-Chin, L., Wei-Hung, C., Cheng-Fu, C., & Pandia, H. (2021). Role of government to enhance digital transformation in small service business. Sustainability, 13(3), 1028. doi:http://dx.doi.org/10.3390/su13031028
Civelek, M., Ključnikov, A., Kloudová, J., & Vozňáková, I. (2021). DIGITAL LOCAL CURRENCIES AS AN ALTERNATIVE DIGITAL PAYMENT METHOD FOR BUSINESSES TO OVERCOME PROBLEMS OF COVID-19 PANDEMIC. Polish Journal of Management Studies, 23(2), 57-71. doi:http://dx.doi.org/10.17512/pjms.2021.23.2.04
Gharpure, R., & Ghodke, M. (2021). Effect of cloud computing technology adoption on reduction in costs: A critical review from the perspective of business. Turkish Journal of Computer and Mathematics Education, 12(10), 4391-4399. Retrieved from https://www.proquest.com/scholarly-journals/effect-cloud-computing-technology-adoption-on/docview/2628341190/se-2
Habib, S., Hamadneh, N. N., & Hassan, A. (2022). The relationship between digital marketing, customer engagement, and purchase intention via OTT platforms. Journal of Mathematics, 2022 doi:http://dx.doi.org/10.1155/2022/5327626
Illescas-Manzano, M., Noé Vicente López, Nuno Afonso González, & Carmen Cristofol Rodríguez. (2021). Implementation of chatbot in online commerce, and open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 7(2), 125. doi:http://dx.doi.org/10.3390/joitmc7020125
Kim, S., Choi, B., & Lew, Y. K. (2021). Where is the age of digitalization heading? the meaning, characteristics, and implications of contemporary digital transformation. Sustainability, 13(16), 8909. doi:http://dx.doi.org/10.3390/su13168909
Mason, A. N., Brown, M., Mason, K., & Narcum, J. (2021). Pandemic effects on social media marketing behaviors in india. Cogent Business & Management, 8(1) doi:http://dx.doi.org/10.1080/23311975.2021.1943243
Meshko, N., & Savinova, A. (2020). Digital marketing strategy: Companies experience during pandemic. VUZF Review, 5(4), 41-49. doi:http://dx.doi.org/10.38188/2534-9228.20.4.05
Yoon, S. (2020). A study on the transformation of accounting based on new technologies: Evidence from korea. Sustainability, 12(20), 8669. doi:http://dx.doi.org/10.3390/su12208669