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23 Apr 2024
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Digital Business – Importance, Difference, And More

In e-business, digital business companies strive to develop new business models with added value and not to maintain existing business models. Technologies help not only digital companies to improve customer-centric processes but also optimize internal processes and skills.

Digital business is a holistic management concept focusing on new business models with a strong technological focus. Digital companies are based on digital technologies, digital transformation, and new business models.

Growing Importance Of The Digital Economy

Information technologies have changed the infrastructure and processes of companies from the moment the internet became available for companies and consumers. Digital transformation has a significant impact on companies. It has revolutionized the way companies go about their day-to-day operations. In addition, it has also accelerated business activities and processes to make the new possibilities of digitization usable at a strategic level. A Digital Business fully utilizes all digital transformation opportunities to remain competitive and thrive in the technological economy.

Digital companies are trying to benefit from the change in consumer behavior. Consumers are using digital channels as a source of information. They recognize the added value of digital products and services and are now very familiar with them. In the absence of any other means of differentiation, more and more companies see new competitive advantages in the digital economy.

Digital companies know how to create value for customers beyond what an online shop can offer. Digital business is a holistic concept that understands the creation of new value chains and the developing of innovative business opportunities through technology. Successful digital companies create value through a skillful combination of physical and digital resources. At best, this combination of factors creates a competitive advantage that other traditional companies cannot imitate.

Digital Business Definitions

There are different definitions of digital business in business practice and academic research. For example, Gartner defines digital businesses as “(…) the creation of new business designs by blurring the digital and physical worlds. It creates new value chains and business opportunities that traditional businesses cannot offer.” Gartner is thus focusing on the development of new business models through the use of digital and physical resources.

Accenture has a similar view. The management consultant describes the term: “Digital business creates competitive edge based on unique combinations of digital and physical resources. They do things that others cannot and in ways that build a comparative advantage.”. Here, the innovative combination of factors and the resulting unique competitive advantage is the focus of consideration here.

These two perspectives of digital business can also be found in academic literature. For example, Bharadwaj et al. (2013) Digital business as an enterprise can create a competitive advantage through digital resources. What is meant here, in particular, is a comprehensive reorganization of numerous areas of the company (supply chain, marketing, etc.) through digital technologies.

Digital companies are a category of companies that have transformed business models and processes toward the digital world. This change is called digital transformation. It encompasses the entire company, which means new entrepreneurial potential can be harnessed.

D business vs. E-business

Both terms should not be considered synonyms. Instead, one can determine a difference in the terminology based on the various stages of development at which a company is located. Digital Business (D-Business) means that a company creates revenue and value from an unprecedented combination of people, technology, and resources. These factors create new values ​​and experiences, giving the company a significant competitive advantage over its competitors. Digital companies are therefore developing new business models. In this, most of the business processes are digitally driven.

An electronic business (e-business) company usually maintains its existing business model. Technologies are only used in this company to improve these models by increasing efficiency and avoiding redundancies. E-business is, therefore, about bringing current business processes online. For example, Zappos successfully brought its shoe store online. So it’s an electronic business.

Ultimately, the difference between D-Business and E-Business is due to the digital maturity or digitization of the business model.

Possibilities Of Digital Change

In a digital world, it makes sense for companies to examine the possibilities of digital business for themselves. First, by comparing it with your traditional business model, the potential and possible applications of digitization can be identified. Then, the company can carry out a digital transformation. Starting points for changes can be found in the following areas:

Leveraging Digital Technologies

Digital businesses are focused on leveraging the competitive advantages that technology can unlock. Technologies not only enable an increase in effectiveness in the company (such as the creation of a better, personalized customer experience based on existing user data). You also realize increases in efficiency through cost reductions.

Use Of The Digital Transformation

Successful digital companies manage not only to perceive the changes in the corporate world but also to incorporate them into their corporate philosophy and strategy. Ultimately, they differ from traditional companies because they have a different corporate culture. This culture enables the emergence of new roles and responsibilities in the company. The IT area, in particular, is becoming more involved in strategic decisions. Still, using digital services as an integral business model component means that organizational restructuring is also necessary.

Use Of Modern Business Models

With digitization, customers have become the focus of consideration and digital strategies. The development of a unique customer experience that meets the demands of modern consumers is considered the most significant differentiating factor in today’s digital economy. Digital services enable many starting points to optimize this customer experience and create extensive customer satisfaction.


The IT area is becoming more involved in strategic decisions. Still, using digital services as an integral business model component means that organizational restructuring is also necessary.

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