What is a Digital Business?

A digital business uses technology to create new value on the business models, customer experiences, and internal capabilities that support the core of operations. The term includes both digital native brands and those that are transforming their business with digital technologies.

Growth of the digital economy

Today, people spend more money online, which has shifted the business emphasis to digital sources of income and digital channels. The growth of the digital economy has made people more familiar with digital products and services, leading companies to seek new competitive advantages in the digital environment.

But the digital business has evolved more than simple online sales; According to Accenture, “Digital companies create competitive advantages based on unique combinations of digital and physical resources. They do things that others cannot and in ways that build comparative advantage. ”

Common elements of a digital business

There are varying opinions from industry experts on the exact definition of digital business. Gartner affirms that digital business is the creation of new value chains and business opportunities that traditional companies cannot offer. McKinsey emphasizes that "digital should be seen less as something and more as a way of doing things."

Most digital companies fit one or both of these points; focus on creating value across new frontiers for their core business, or use digital technology to drive growth, revenue and performance in ways that would be impossible with traditional models.

It can be helpful for companies to review the common elements of digital business and compare them with their own business models. These are some of the trends that differentiate digital processes from traditional ones.

Use existing technologies to reduce costs, collect data, and provide a better customer experience. Digital companies focus on the competitive advantages that technology offers them, either by reducing expenses or by providing new value to their customers.

Adopt the concept of digital transformation and the cultural changes it requires. The implementation and management of digital services may require organizational restructuring, especially as new roles are created and greater attribution is given to strategic IT decisions.

Explore new business models that put the customer experience at the center of the digital strategy. People are often willing to spend more for an exceptional customer experience, making it a key differentiator in the digital economy. Business models that align with a focus on customer satisfaction will focus on digital services, as digital is the increasingly preferred experience for users.