Have you ever thought about using technology to improve your business? For example, creating a website where customers can buy your products or services online without visiting your physical office.
If you haven’t, you’re missing a huge growth opportunity. But maybe, like many business owners, you prefer to focus on what you already know and understand, right?
So, let’s take a closer look at the types of digitalization (digital transformation) that can help you get a clear view of the missing piece of the puzzle!
7 Types of Digitalization You Must Know as a Business Owner
There are 7 types of digital transformation that you must know as a business owner (or CEO), which are:
- Augmented Reality
- Artificial Intelligence
- Internet of Things
- Digital Platforms (ERP)
- Business Process Transformation
- Cultural Transformation
- Domain Transformation
Augmented Reality (AR)
Augmented Reality refers to adding virtual objects to the real-world environment, such as characters, marks, and animations, to enhance the user experience. An example of AR could be Instagram filters because they add virtual elements, like rabbit ears, to your photo. This means they place digital objects onto your face, integrating them into your real environment.
The difference between AR and Virtual Reality (VR) is that AR adds digital content to the real environment, while VR creates a completely virtual environment separate from the real one.
Business owners can take advantage of this technology by using it to make their ads or promotional offers stand out from their competitors.
For example, entrepreneurs can use websites like Spark AR from Facebook or Zapworks to create high-quality AR content, which can improve user engagement and lead to a better conversion rate.
Artificial Intelligence (AI)
Artificial Intelligence (AI) is the use of technologies like machine learning to enable computer systems to think like humans and perform tasks that typically require human intervention, without receiving direct instructions from a programmer.
AI is based on technologies such as machine learning (ML), computer vision, and natural language processing (NLP).
AI is a form of digitalization (digital transformation) because it utilizes advanced technologies to improve business workflows, create new revenue streams, or enhance existing ones.
Businesses can use AI to increase revenue, reduce costs, and complete many tasks more efficiently. For example, a business in the restaurant industry could use an AI chatbot like ChatGPT to optimize its menu in the best way possible.
This could encourage customers to order more dishes, increasing the average order value and leading to higher revenue.
Internet of Things
Internet of Things (IoT) refers to a network of devices, applications, and vehicles that are equipped with sensors to help them collect real-time data and process it using AI and cloud computing.
The IoT enables machines, such as cars, to mimic human decisions by following programmed logic and AI-powered predictions.
For example, with IoT, cars can be self-driving and take you to your desired destination without any action on your part.
IoT is used in a wide range of human activities, such as smart homes, healthcare wearables, and much more.
IoT relies on technologies like Wi-Fi, sensor data, AI, cloud computing, and programmed logic.
IoT is a form of digital transformation, as it helps businesses make better decisions based on data collected from various devices and vehicles. This leads to more efficient use of resources, ultimately increasing revenue for businesses.
Businesses can use IoT to increase revenue. For example, a healthcare business can use an IoT-integrated telehealth platform, which helps doctors connect with their patients remotely through a consultation payment system.
Digital Platforms (ERP)
Digital platforms, especially ERP, are software systems that provide complete digital transformation for an entire business.
ERP, which stands for Enterprise Resource Planning, offers solutions for digitizing core business activities such as HR, finance, accounting, and more.
ERP is based on technologies like:
- Databases
- Programming languages
- Cloud computing
- AI
- Blockchain
ERP is a form of digital transformation because it utilizes various technologies, such as cloud computing and artificial intelligence, to improve, optimize, and sometimes automate different business processes. This positively impacts the cost, speed, and quality of business outcomes.
Businesses can use ERP systems like Odoo to increase their revenue. For example, a mid-sized printing retail company can enhance its follow-up process by using Odoo CRM, which helps track customer interactions.
They could also use Odoo Marketing Automation to launch and manage loyalty programs more effectively.
Business Process Transformation (BPT)
Business Process Transformation (BPT) is a strategic approach that focuses on redesigning, improving, and creating new business processes within a company. This can lead to enhanced productivity, better time management, and improved overall work quality.
Business Process Transformation relies on various technologies, such as:
- Internet of Things (IoT)
- Automation
- Cloud Computing
- Blockchain
- Artificial Intelligence (AI) & Machine Learning (ML)
- Process Mining
- Big Data & Advanced Analytics
and other related technologies.
BPT is considered a form of digital transformation (digitization) because it utilizes various digital technologies to enhance performance, speed, and ultimately, business revenue.
For example, a fashion retail store struggling with invoice management can implement BPT by adopting an ERP system like Odoo, which provides a built-in accounting app.
The Odoo accounting app offers automation features such as automatic invoice generation and reporting, contributing positively to the business's efficiency and outcomes.
Cultural Transformation
Cultural transformation is a strategic change, shift, or evolution in the values, ideas, beliefs, and norms of a company, organization, or even a society.
This change is broad and is often driven by significant goals that need to be achieved.
Cultural transformation is enabled by technologies such as virtual communication tools, task management systems, and any other technology that can introduce new behaviors within the company.
Cultural transformation is a type of digital transformation because it helps businesses improve overall employee behavior in ways that support business goals and objectives.
For example, an electronics retail store that still relies on paper for its operations can undergo cultural transformation to achieve zero paper usage.
Zero paper usage can be implemented using technologies like the Odoo ERP system, which includes a document management app to simplify the documentation and storage of business files and folders.
Domain Transformation
Domain transformation refers to expanding a company from its original market to another market where its resources or expertise provide a competitive advantage.
Domain transformation is not based on specific technology; instead, it involves using different tools, digital technologies, and software according to each situation.
Domain transformation is a type of digital transformation because it utilizes various digital technologies to help businesses expand into new markets, leading to the creation of new revenue streams.
For example, Microsoft underwent domain transformation by entering new markets such as cloud computing (Azure) and search engines (Bing).