BUSINESS IN DIGITAL ERA
Author:-YASHSALUNKHEStream:- MMSRoll No:- 52Kohinoor Business School Abstract:-The objective of this research is to study business model transformation in the digital era. The target group is a group of 557 Gen Y (Generation Y) who are not over 41 years old and Gen Z (Generation Z) who were born between 1997 and 2010. Then the data were collected by convenience selection via online questionnaires and analysed by multivariate analysis of variance (MANOVA). The findings reveal that demographic factors including age, monthly income, and career relate to the business model in the digital era. The perception of information, the Internet use, and creative innovations have a relationship with the business model in the digital era at a significance level of 0.05. Since perceiving information affects consumer behaviour in the digital era, there should be equality in the access of online information; therefore, a policy regarding free internet connection provided by the government agencies such as the National Broadcasting and Telecommunications Commission (NBTC) is recommended.Keywords: Business Model, Digital Transformation, Generation Y, Generation ZIntroduction:-This is a time that digital transformation takes an important role in the business world; therefore, modifying business models in order to be a modern organization focusing on digital technology becomes a key of the administration of a business. Analysts from the Economic Intelligence Centre (EIC) describe the meaning of the digital transformation era as an era where technology is evolving rapidly and this can be seen from data warehouse systems such as Cloud, Big Data, Internet of Things (IoT), smart phones, social media, and other technologies. The key of digital transformation is to apply technology to every part of a business such as operation, product creation, communication, marketing, organizational culture, and business growth planning, so that a business can adapt quickly and can deal with new problems. Hence, a company needs risk management plans and real-time customer service centres for problem solving (Booasang, 2017). Apart from this, being a digital- transformed company could save the costs from less labours and loss from human errors (Chinachoti, 2018).According to a Forbes survey, 84% of businesses fail in digital transformation due to the lack of accurate analysis in applying digital technology to their businesses and many companies have no proper plans such as a Five Business Model (Chantorn, 2018). Business models are essential for market economies where there are competition, consumer choice, transaction costs, and heterogeneity amongst consumers and producers. Technological innovation creates the needs to bring discoveries to markets and the opportunities to satisfy unrequited customerneeds leading to the necessity of business models, while new business models themself can be a form of innovation (Teece, 2010).20 Digital Technology Examples:-Digital technology has radically transformed almost every aspect of human life in recent years, including communications, the workplace, entertainment, travel, banking, and shopping.This article lists 20 examples of digital technology and then explains each in more detail.1. Websites2. Buying and Selling Online3. Smartphones4. Digital Televisions5. Video Streaming6. eBooks7. Digital Music8. Geolocation9. Blogs10. Social Media11. Computers12. Printers13. Self-Scan Machines14. ATMs15. Digital Cameras16. Cars and Other Vehicles17. Clocks18. Robotics19. Drones and Guided Missiles20. Banking and Finances What Is a Digital Business?In today’s work-from-home world, it feels like everyone is running a digital business. But the reality is that top business leaders have different definitions of what it means to go digital. As a result, priorities vary when it comes to technology adoption and transformation.Generally speaking, digital businesses rely on technology to operate and grow. Depending on your industry, that might look like: Using productivity apps and task management systems to automate workflows Leveraging AI to improve customer experience Capturing data to improve business intelligence Or, for online-only companies, doing 100 percent of your work via digital platformsBut just downloading a few apps doesn’t make you a digital business. True digital transformation is the slow process of shifting away from manual processes and toward a customer-centric, technology-focused business model.Becoming a digital business impacts every part of your organization, from employee experience to customer service to back-end maintenance and management.Examples of Digital Business:-One example of a digital business is Amazon.com. Amazon.com started as an online. bookstore, but they have since expanded to become a powerful e-commerce platform. Amazon.com uses digital technology to connect buyers and sellers and to facilitate transactions. Another example of a digital business is UberDigital Business Benefits:-What is digital business and what are its benefits? To answer this question: there are numerous advantages of transforming a business into a digital business. It improves the effectiveness and efficiency of organizations. Apart from that, it also boosts productivity. Below given are some of the pros of digital business1. Enhances ProductivityAutomating manual processes has a huge impact. For example, imagine you automate an assembly sector inside your industry. Now, there is zero to the minimum need for manual labor to work in that particular sector because everything will be done with the help of robots. Therefore, there will only be minimal mistakes. Apart from that, the process is also faster.2. Lower Operational CostsThe main objectives of every business are to save time and money. Doing manual processes and tasks is extremely time-consuming and relatively slower than automated techniques. In addition, you also need to pay the laborers on a monthly or hourly basis, which would involve a lot of money.It has been proven that inefficient processes can cost companies up to 25 % of their revenue. When the processes are done manually, there are higher chances of mistakes. In such cases, digitalizing the organization will be more efficient and less expensive.An interesting fact about digitalization is that it can save up to 90 % of the companies’ operational costs.3. High Quality and ConsistencyA major advantage of having a digital business is that it can guarantee that all the operations are made consistently. It provides high-quality outputs.For instance, automating a customer service sector will provide the consumers of that sector with high-quality information and support.4. Governance and ReliabilityThe automated services are very consistent, enabling the user to rely on them. It will help in the following way: Run your business. It helps in giving reliable procedures and methods to the clients.5. Better Decision MakingInformation management and digitization work very closely. When the information is analyzed, it will help transform it into knowledge. Knowledge helps in making better decisions.Concepts of Digital Business:-Becoming a digital business is a foundational shift, so it’s important to consider the key concepts guiding your transformation.What are businesses looking to achieve by going digital? Most organizations cite the following four concepts:1. FlexibilityOur world is constantly changing, and companies are looking for a business model that allows them to be more flexible. During the COVID-19 pandemic, for instance, businesses realized that technology could help them pivot from on-site to work-from-home and back again without creating a logistical nightmare. Going digital allows you to adapt to change quickly without the dead weight of time-consuming manual processes.2. ScalabilityWith scalability, processes match fluctuations in your workload. Digital businesses can quickly scale up or down to meet the needs of the organization. As an example, a scalable business can efficiently onboard new employees during periods of growth or expand their data storage when taking on a large client.3. CultureDigital business requires changing how you operate, and this starts with changing how you think. To truly become a digital business, you need your staff to be on board. Though tech leaders in your organization may be at the forefront of this work, building a philosophy of productivity, efficiency, and automation into every department’s mission is vital to success.4. QualityOur final digital business concept seems straightforward, but it’s important to keep in mind that quality is key as you make big changes. Often, we become swept up in innovation for innovation’s sake. But this won’t add value to your business. If your new processes aren’t enhancing quality, you need to rethink your strategy.Components of Digital Business:-To digitize a business, there are some essential components that the business should possess. Let us see what they are:1. Artificial IntelligenceThe other name for Artificial Intelligence is AI. It is considered one of the most efficient methods in digital businesses. It helps the organizations anticipate customers’ desires, faster forecasting outputs, etc. It can detect what is happening and calculate the reasons for it. It also provides the most appropriate solutions for any problem that occurs.2. Internet of ThingsAnother name for the Internet of Things is IoT. It can help develop smart products. Also, the arrival of 5G internet will help businesses reach their goals faster. It will also help increase the productivity of the processes.3. Digital EngineeringThis technology plays a vital role in transforming customers’ journeys. It also enables rapid innovation, which will help launch new brands and technologies.Growth of the Digital Economy:-The digital economy is growing at an unprecedented rate. In 2016, it was estimated that the global economy was worth $11.5 trillion, which is expected to increase to $19 trillion by 2025. This growth is driven by several factors, including the increasing popularity of online shopping, the proliferation of mobile devices, and the rise of the sharing economy. As more and more businesses move online, it is becoming increasingly important for companies to have a solid digital presence.The digital economy has increased in recent years as more and more businesses move their operations online. This trend is driven by several factors, including the increasing accessibility of the Internet, the growing number of consumers who are shopping online, and the ease with which businesses can set up and operate a digital presence. The result is that the digital economy is now worth trillions of dollars and is expected to grow in the coming years. This growth has a profound impact on how businesses operate and is transforming how the economy functions.Common Elements of a Digital Business:-A digital business is a company that uses digital technologies as an integral part of its business model and operations. Many digital businesses are born-digital companies, but even traditional businesses use digital technologies to create new value for their customers and shareholders. The critical elements of a digital business are:1. A customer-centric business model that delivers value to customers in a new or differentway.2. An agile organization that can rapidly respond to market or customer needs changes.3. A data-driven culture that uses data to drive decision-making.4. A focus on creating a great customer experience.How to Build a Successful Digital BusinessWith so many benefits to starting a digital business, you might be wondering: how do I get started?Whether you’re taking your traditional business into the digital world or starting a company from scratch, here are five tips to help you build a successful digital business.1. AutomateDigital businesses have one thing in common: they automate everything. Why waste time doing mundane tasks that AI can do for you when you could be spending that time growing your business? Examine your processes and start automating wherever possible.2. Train Your TeamPeople are the foundation of everything you do. Invest in upskilling your team so they feel confident using new technology. They’ll help you find new ways to embrace tech as your business grows.3. Stay AgileDigital transformation takes time, and staying agile is one of the foundational digital business concepts. By making micro-adjustments to your digital business strategy as you go forward, you’ll have a more satisfactory end-product. Evaluate your transformation frequently and gather as much data as you can to help you make the right long-term decisions.4. Invest in Digital MarketingYou can have the most efficient organization in the world, but it won’t do you any good if you don’t have any customers. Invest in a smart digital marketing strategy for your organization. Train your marketing team on the best digital marketing strategies for today’s market, from SEO optimization to social media management and beyond.5. Don’t Be Afraid to Go BigDigital businesses have huge room for growth, so don’t set your sights too low. There’s no telling where this new technology could take you.FAQs1. What are the challenges of digitalization?Below mentioned are some of the biggest barriers to digitalization: Lack of vision of corporate Change in management capabilities Legacy systems Inability to experiment quickly Risk-aversive culture Inadequate and improper collaboration between lines of business and IT. Lack of talent2. What are the advantages of digitalization?Following are the benefits of digitalization: Lesser error or mistake Enhanced agility Streamline processes Decreased operational expenses Higher productivity Enhanced transparency Reliability and governanceFast Track Your Career in Digital Business:-Learn the pragmatic aspects of digital marketing by enrolling in Simplilearn’s Professional Certificate Program In Digital Marketing, offered in partnership with Purdue University. Learn top digital marketing tools and techniques with this certification featuring masterclasses from Purdue and Facebook, while working on real-world case studies from Harvard Business Publishing. This certification program is designed for professionals looking to pursue a career in digital marketing and seasoned marketers who want to learn the latest digital marketing skills.Research Objective:-The objective is to study business models and the factors affecting business models in the digital era.Conceptual Framework:-Independent variables include demographic factors, gender, age, monthly income, education level, occupation, community tools, and the perception of information in changes such as online connections, Internet use behaviour, and creative innovations.Dependent variables are business models in the digital era referred from the theory of digital transformation Five Business Model, including (1) discounting pricing to earn more profits, (2)selling at the price celling, (3) using cutting-edge technology for convenience, (4) testing it first and purchasing it with willingness later, and (5) understanding customers desire exclusively.Definition:-Five Business Model is a business model for digital transformation which can adapt to a wide range of businesses such as retail business, printing media business, manufacturing, the banking and finance industry, the public utility industry, the medical and healthcare industry, cargo transportation, insurance, and logistic business (Chantorn, 2018).(1) Discounting Pricing to Earn More Profits: This business model aims to get more market share within the industry in order to earn higher profits. It is applied to the big market by focusing on selling merchandise at the lowest price with an agreement between business partners and suppliers.(2) Selling at the Price Ceiling: Owning big data might not achieve victory in business competition, but the right analysis and proper application are essential tools of business. This method could be applied by quoting the maximum price and offering new and unique innovations which other companies cannot beat. Then the selling company will seek clients who look for the new and unique products because these customers are willing to purchase merchandise at a high price in order to improve their trendy image.(3) Using Cutting-Edge Technology for Convenience: AI is involved in our daily life in many ways, for example, driverless cars and cashier-less stores. Another interesting ultramodern technology is social media which is a low cost tool used to promote a brand, and the contents will be shared online via many platforms.(4) Testing First and Purchasing with Willingness Later: When customers decide to purchase something, they need product testing for decision-making. For example, customers might have concerns when they are buying new cosmetics. They might worry whether the cosmetics can cause makeup allergies or not. Therefore, if retailers allow customers to test the products, it will create reliability in online businesses.Research method Result:-This study is a quantitative research approach using online collection by convenience selection of the Gen Y and Gen Z population, accounting for 557 samples, and then it was analysed by MANOVA.After testing the relationship between dependent variables by MANOVA, dependent variables have to be metric variables and they have to be associated. In this study, dependent variables are business models in the digital era as referred to the theory of digital transformation Five Business Model.Correlations Discounting ProfitsSelling at CeilingUsing ConvenienceTesting LaterUnderstanding Pricing to the Price CuttingFirst and Customers Earn More Edge Purchasing Desire Technology with Exclusivelyfor Willingness Correlation1 .465** .454** .485** .342**Discounting More ProfitsPearson Pricing to Earn Sig.(2-tailed).000 .000 .000 .000N 557 557 557 557 557Correlation.465** 1 .428** .544** .544**Selling at the Price CeilingPearson Sig.(2-tailed).000 .000 .000 .000N 557 557 557 557 557Correlation.454** .428** 1 .489** .552**Using CuttingConveniencePearson Edge Technology for Sig.(2-tailed).000 .000 .000 .000N 557 557 557 557 557Correlation.485** .544** .489** 1 .552**Testing First LaterPearson and Purchasing with Sig.(2-tailed).000 .000 .000 .000Willingness N 557 557 557 557 557Correlation.342** .544** .552** .552** 1Understanding ExclusivelyPearson Customers Desire Sig.(2-tailed).000 .000 .000 .000N 557 557 557 557 557Correlation is significant at the 0.01 level (2-tailed)A value of statistic/std. error between +/-1.96 indicates a normal distribution. Statistic/std. error may be calculated by dividing the skewness statistic by std. error and dividing Kurtosis statistic by std. error and the results show negative values which are out of the range of +/-1.96. This indicates that five dependent variables have non-normal distribution with a negative skewness that can be seen in Figure 1. Figure 1 (left) shows the actual distribution of data, while the right one illustrates a normal distribution.Our Digital world:-Today, most of our world is digital. Our computers and smartphones carry all the data needed (and more) to be productive all day long – from email to calendars, from weather forecasts and global news, to food delivery services and transportation options.Computers powerful enough and portable enough, software intuitive enough for any user, network connectivity advancements enabling rich data to be shared and stored quickly and easily in huge cloud environments, where the capacity of data exchange and computation is many times greater than ever before, lay the foundation for the digital transformation of our society.Because everyone starts from a different place and the process is continuous, there’s no digital transformation framework or roadmap that can be universally applied. However, people are a critical factor as transformations are not dictated by the technology. They are defined by the goals we want to achieve and the ways in which we are organised to achieve them. Creating value through technology means tackling multiple interdependent dynamics simultaneously, and those factors depend on your culture. We carry the responsibility of shaping that culture and for this we all need to be actively involved in the way technology is built and used.Digital transformation is the inevitable step forward for technology. Just as water and steam power were used to mechanise production, and then electric power led to mass production, digital technology has automated processes that lay the foundation for new technologies to emerge and further transform the world as we know it.Discussion:-The findings indicate that demographic factors affect digital transformation, excepting gender and education level which have no relationship with some models such as selling at the price ceiling and testing it first and purchasing it with willingness later, respectively. Perception of information, internet use, and creative innovations, have a significant effect on digital transformation model. These findings agree with the study of Dumrongpong (2018) who stated that entrepreneurs are able to create new products. This idea is equivalent to the creative innovations of this study causing differences by using digital marketing such as online system or e-commerce. Therefore, it creates the global business competition leading to business sustainability in the digital economy era. Chesbrough and Rosenbloom (2002) define a business model as “the creating where many viewpoints are accumulated to set the framework and to connect to each other using specific technology and potentiality as materials in order to transfer customers and markets into economic products.” They also define the six components used to create a business model. The first model is that free goods and services are offered, but income comes from ads and critical mass. This model is popular in many online start-ups. For example, Facebook is a free service, but their income comes from selling advertisements. This is beneficial for customers; however, this model is awful for startups who have inadequate funds. This model is similar to the findings of this study, where a target group agrees with offering free services and earning profits afterward. This method might profit by selling advertising or by gaining popularity that will lead to the purchase of goods and services later on. Another model is to offer free products but collect payment for services after that. The products are offered for free, but the clients will be charged for the installation, adjustment, training, and other services. This model agrees with the findings that customers agree with the idea of free products, but they will pay for the services with willingness later on.Recommendation:-The findings of this study shows that perceiving information affects consumer behaviour in the digital era and the study of Meechunek (2017) confirmed that Generation Y is active social media user. They prefer exclusive experience rather than having cool products and they has a natural propensity to spend money and time on products which promote their lifestyles. Therefore, using social media literacy and viral marketing can impact Generation Y social behaviour. Due to this reason, a policy regarding free internet connection provided by the government agencies such as the National Broadcasting and Telecommunications Commission (NBTC) is recommended. The public free Internet should be available widely and easy to be accessed.In addition, the results show the relationship between demographic factors and business model in digital era. This finding is in accordance with Karnreungsiri and Praditsuwan’s study (2017) stating that the essential components of a marketing strategic model are defining customers based on the their age, career, income, attitude, personality, and lifestyle, promoting positive value of a product benefits, and improving product’s packaging, branding, and variety of a products. It is obvious that entrepreneurs can create new business concepts based on the demands of target groups which have differences in gender, age, education, income, and occupation, and this method is called niche marketing.Conclusion:-Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end the beginning.Winston Churchill (1942)1Now that weâ€ ™re at the close of our journey to mastering digital business, I hope that the discussion of disruptive technologies, platform business models, digital services mastery and innovation management approaches has helped to shed some light into the practices of todayâ€ ™s digital business leaders and provide a glimpse of whatâ€ ™s to come in the future, along with some strategic considerations, techniques and approaches that you can apply within your own initiatives.Digital transformation is a broad subject that requires competency across strategy and vision, people and culture, processes …We hope this course has provided you with a sound foundation and ignited a lot of curiosity about the digital world we are living in, with all the opportunities and challenges it opens up.As we have seen throughout the course, the digital revolution has many sides, and this has led to technology being adopted in almost every area of our daily lives to improve or replace whatever existed before. We can look at it like a puzzle, with each component – computing, software, connectivity and data storage revolutions – building on each other and coming together to transform existing tools and methods. One innovation leads to another, and new technology leads to process improvements which lead to better products and services.The first truly disrupting computers – mainframes – led to servers, and once servers connected into networks, they became the foundation infrastructure for the internet. With increasing connectivity, the infrastructure became key to hosting applications. As many integral business processes – logistics, manufacturing, research, development, management –depended on applications, technological advancements led the server infrastructure to support cloud hosting and computing, ensuring greater flexibility and scalability. Benefiting from this improved infrastructure, applications kept serving new demands, from business to consumer needs, and taking advantage of mobile device connectivity, applications are now central to how we manage everyday tasks.Reference:-Booasang, P. 2017. “Digital Transformation: Transform the business with digital concepts.”Money and Banking (429): 1-4.Chantorn, K. 2018. 5 Exotic Business Models that Arise in the Digital Transformation Era. 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Non-normal Distribution and How to Fix the Skewness and Kurtosis? – Descriptive Statistics. Retrieved from www.youtube.com/watch?v=o21 Mnq8paIg.