CHAPTER 6

Digital Business & Big Data

Course: Introduction to Business

Course Code: BSIB1101
Economics & Business Administration College
LEARNING OUTCOMES:
1. Discuss the concepts and scope of
digital business and big data in
relation to the market sector

2. Recognize the key characteristics

and benefits of digital business and
big data to organizations

3. Identify the practices and application

of big data by organizations
Contents
1. Introduction to Digital Business
2. Benefits of Digital Business
3. Digital Business Models
4. Big Data
5. Big Data Analytics
1. Introduction to Digital Business

What is Digital
§ It's an electronic technology that :
§ creates, stores, and transforms data.

§ Digital technologies are :

§ electronic tools,
§ systems, devices and resources
§ that generate, store or process data.

§ Most popular digital technologies :

§ Artificial Intelligence,
§ Virtual Reality,
§ Robotic Process Automation (RPA),
§ Blockchain, 5G,
§ Internet of Things (IoT).
1. Introduction to Digital Business
What is Digital Business
§ In business, digital is :
§ a way of doing or delivering something
§ that combines the physical business world
with the digital one.

Digitalization

§ Transforming any business into a digital business

using digital technologies.

§ The main purpose of digitalization is :

§ to generate higher revenue
and
§ create new value-added opportunities.
1. Introduction to Digital Business
Main Examples –Popular Digital Businesses
Netflix:
§ Back in the day, Netflix used to supply DVDs to retail stores, and people used
to buy them.
§ Now people are allowed to stream videos online without having to purchase
CDs or DVDs.
§ Now, they can watch any movie or TV show very conveniently.

Uber:
§ Uber is a transportation technology that allows its users to ride from one place
to another.
§ Uber uses GPS technology to locate the users and gives them their ride to any
place they need, up to a certain distance.
§ Mostly, vehicle owners can tie themselves up to provide uber service to their
passengers.
§ Even delivering food is possible through uber.
2. Benefits of Digital Business
Key Benefits
1. Improve customer engagement:
§ Digitalization can facilitate better customer engagement through innovative communications
opportunities.

2. Increase productivity:
§ By transforming manual processes through automation, businesses can increase productivity.
§ Automation can decrease errors, accelerate processes, and increase efficiency.

3. Reduce operational costs:

§ Manual processes are more time-consuming and costly than automated systems.
§ Digitalizing processes can reduce these issues.

4. Enhance process quality and consistency:

§ Digitalization can help ensure processes are more consistent.
§ This can facilitate an improvement in product quality and services.

5. Develop advanced decision-making processes:

§ Digitalizing allows businesses to gather critical data about their operations, customers, and market
position and to make well-informed choices.
3. Digital Business Models
Common Models
1. E-Commerce(one side sales model)
§ Businesses sell products to online customers through a virtual store.

2. Marketplace(two-sided sales model)

§ Sellers and buyers can use a virtual third-party platform or marketplace to exchange goods and services.

3. Free
§ Companies typically offer customers a free service.
§ Companies then offer their user information to advertisers who target their ads.
§ Example is any social media site where users input or create useful data about themselves that
advertisers can use, such as their demographics, buying habits, and preferences.

4. On-demand
§ An on-demand model provides users with a virtual product or service when they want it.
§ Products are typically available for a specific length of time.
§ This is common with on-demand video services, where movies are typically available for only a few days.
4. Big Data
What is Big Data
§ Extremely large collections of data (data sets):

§ that may be analyzed to reveal

§ patterns, trends, and associations,

§ especially relating to

§ human behavior
and
§ interactions.'
4. Big Data
Sources of Big Data
Main Sources

1. Social (human)
§ This source includes all social media
posts, videos posted etc.

2. Machine (sensor)
§ This data comes from what can be
measured by the equipment used.

3. Transactional
§ This comes from the transactions
which are undertaken by the
organization.
§ This is perhaps the most traditional
of the sources.
4. Big Data
Characteristics of Big Data
§ The characteristics of big data, known as the 5Vs, are:
1. Volume 4. Veracity
§ Have to process high volumes of low-density, § Accuracy and truthfulness and relates
unstructured data. to the quality of the data.
§ E.g. Twitter data feeds, clickstreams on a web page or a
mobile app, or sensor-enabled equipment. 5. Value
§ Value it could create if gathered,
2. Variety analyzed and used wisely.
§ Refers to the many types of data that are available.
§ E.g. text, audio, and video,

3. Velocity
§ Velocity is the fast rate at which data is received and
(perhaps) acted on.

§ Some internet-enabled smart products operate in real time

or near real time and will require real-time evaluation and
action.
5. Big Data Analytics
What is Big Data Analytics
§ Big data analytics refers to :
§ the methods, tools, and applications
§ used to collect, process, and derive insights
§ from varied, high-volume, high-velocity
data sets.

§ These data sets may come from a variety of sources,

§ such as web, mobile, email, social media, and
networked smart devices.
5. Big Data Analytics
Big Data Analytics Process
1. Collect
§ The data, which comes in structured, semi-structured, and
unstructured forms, is collected from multiple sources
across web, mobile, and the cloud.
2. Process
§ The stored data is verified, sorted, and filtered, which
prepares it for further use and improves the performance
of queries.
3. Scrub
§ Invalid or incomplete fields, and formatting errors within
the data set are corrected and cleaned.
4. Analyze
§ Analyzing big data is accomplished through tools and
technologies such as
§ data mining, AI, predictive analytics, machine
learning, and statistical analysis, which help define
and predict patterns and behaviors in the data.
5. Big Data Analytics
Big Data (DIKW) Pyramid
§ Rowley explained the pyramid: 'Typically information is
defined in terms of data, knowledge in terms of information,
and wisdom in terms of knowledge.’

1. Data:
§ A range of data can be collected from various sources –
this is raw data and not particularly useful in this form.

2. Information:
§ The raw data can be analyzed to look for trends or patterns.

3. Knowledge:
§ The information can be analyzed further to establish how
the identified links are connected.

4. Wisdom:
§ The knowledge gathered can be used to make informed
business decisions.
5. Big Data Analytics
Big Data (DIKW) Pyramid-Example
§ A soft drink manufacturer Wisdom:
makes a range of fruity How can this knowledge be used?
s o f t d r i n k s i n f o u r § The company should only produce lime flavor in plastic bottles and only
different flavors (orange, produce pear flavor in glass bottles.
apple, lime and pear).
Knowledge:
§ Further analysis has shown that
§ It has traditionally used
§ younger customers prefer the glass bottles while customers from the
plastic bottles but has
older age range prefer plastic bottles.
recently run a trial
§ lime flavor is almost exclusively only purchased by older customers
whereby two flavors were
and pear is almost exclusively only purchased by younger customers.
also made available in
glass bottles. Information:
§ The raw data was analyzed to look for trends or patterns.
§ It is making its plan for § The company finds that there appears to be a link between the types of
next year’s production bottles purchased by different age groups.
and is considering if it Data:
should expand the use of § The company has collected a range of data from previous purchases,
glass bottles. customer questionnaires, social media posts etc.
 Examples of companies using big data
Netflix:
Netflix began as a DVD mailing service and developed algorithms to
help it to predict viewers’ preferences and habits. Now it delivers
films over the internet and can easily collect information about
when movies are watched, how often films might be stopped and
restarted, where they might be abandoned, and how users rate
films.
This allows Netflix to predict which films will be popular with which
customers. It is also being used by Netflix to produce its own TV
series, with much greater assurance that these will be hits.
Amazon:
The world’s leading e-retailer collects huge amounts of information
about customers’ preferences and habits which allow it to market
very accurately to each customer. For example, it routinely makes
recommendations to customers based on products previously
purchased.

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References:

E-Book:
7th Edition (American Psychological Assoc.)Isaac Sacolick. (2017). Driving Digital :
The Leader’s Guide to Business Transformation Through Technology. AMACOM.

Web Links:
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VERSION HISTORY

Version No Date Approved Changes incorporated

01 Sem. (I) 2022/2023

18