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What do we mean by digital business?

What do we mean by digital business? This article explores how the rapid advancement of technology has changed the way we do business.

The rapid advancement of technology has made the world smarter, more intelligent and more interconnected. This has changed how we live, work and communicate, as well as how we do business.

What is digital business?

Digital Business refers to the use of digital technologies and resources to drive day-to-day business operations, develop revenue and performance and deliver personalised, meaningful experiences to customers (McKendrick, 2020).

In digital business, digital technologies are employed in all areas of the business, to optimise internal and external processes and business activities.


This is the key difference between traditional and digital business models. Take Uber, for example. Uber is an example of a successful digital business that was able to transform the taxi industry and offer low-cost services to consumers while developing their own performance and revenue.

Traditionally, taxi providers owned and maintained vehicles that made taxi services deficient and expensive. For customers, time and location were the main problems for finding an economical taxi provider.

Uber employs various digital technologies and information systems – such as GPS navigation, big data algorithms and trustable payment mechanisms – to build a digital business platform that connects drivers and customers through their smartphones.

They provide a ride from anywhere to anywhere, and the price is set based on the demand for rides and the supply of drivers. Their digital business model varies the cost of a journey dynamically by assessing supply and demand in real-time: ‘more expensive if there are fewer taxis than clients and cheaper if the balance swings the other way’ (Knight, 2018).

However, digital business is not just about using information technology (IT) in an organisation – it represents a more extreme revolution:

Digital business is changing the way organisations use and think about technology, moving technology from a supporting player to a leading player in innovation, revenue and market growth.
(Gartner, 2014)

Digitalisation vs digitisation

Digitalisation is often misinterpreted as digitisation. Digitalisation (sometimes just ‘digital’) relies on using digital technologies to transform a process or business functions. For example, using Artificial Intelligence (AI) in business operations and using its insights for decision making.
Digitisation, on the other hand, refers to converting analogue data into digital datasets, for example, converting paper documents to PDFs or creating a digital file of analogue audio for a presentation event.


Gartner. (2014, May 21). Gartner identifies six key steps to build a successful digital business. Web link

McKendrick, J. (2020, July 10). Digital is great, but where are the new business models? Forbes. Web link

Knight, W. (2018). Disruption – The Uber story. Think Digital First. Web link

© Coventry University. CC BY-NC 4.0
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Introduction to Digital Transformation and E-Commerce

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