Executive summary
Digital business is transforming the corporate landscape and has had a significant impact on corporate financial performance. Digital business has given businesses new opportunities to generate income, cut costs, and boost efficiency—from expanding their client base to running their operations more effectively. However, there are considerable difficulties with the digital shift. To succeed, businesses must make investments in new technology, employees, and procedures. Businesses also need to be aware of the dangers posed by digital commerce, including cybersecurity issues, data privacy concerns, and a lack of customer confidence. Besides the difficulties, business owners are becoming more crucial to corporate success.
Table of Contents
The impact of digital business on corporate financial performance is important 4
How the Impact of Digital Business on Corporate Financial Performance developed. 4
Industry or group, digital and dynamic technology has an impact on them.. 6
Business tool effectiveness and comparison to the past 7
Relationship between Digital Technologies and Business/Management Theories. 8
1. Social Cognitive Theories. 9
2. Making Decision Theories. 9
Introduction
The global performance of corporate finances has been significantly impacted by the digital revolution. Companies have been able to save costs, reach new markets, and improve productivity thanks to digitalization. The impact of digital enterprises will be demonstrated in the report by using Google Pay as a historical and current example. Overview of how digital enterprises affects their utilization. the software versions, apps, and platforms that these technologies as well as associated business tools use. According to certain beliefs, digital business has an impact on both old and new organizations. e-commerce models of a certain type that incorporate some real-time business models.
SECTION 1
The impact of digital business on corporate financial performance is important
The effect of digital technologies and businesses on a company's financial performance is crucial. Because of the growing digital technologies, businesses that do not invest in digital business strategies run the risk of falling behind their rivals. As clients demand more seamless digital experiences from firms, this could result in a decline in financial performance.
Significant cost savings and chances for revenue growth can be found in digital business. Using automation and digital marketing initiatives, for instance, can assist in lowering expenses and reaching new clients, respectively. These advantages can boost profitability and revenue growth, which can have a favourable effect on a company's financial performance. Investors and other stakeholders are paying more attention to businesses that perform well in the digital economy. For businesses to remain competitive and experience sustainable growth, they must fully comprehend how digital business affects corporate financial performance.
How the Impact of Digital Business on Corporate Financial Performance developed
Corporate financial performance has been significantly impacted by the growth of the digital business over time. With the rise of e-commerce and the popularity of online shopping, companies that have embraced digital payment methods have been able to increase sales, cut expenses, and enhance consumer satisfaction.
Google Pay is one such digital payment platform that has experienced tremendous development. It was initially introduced in 2011 as Google Wallet, a tool that allowed users to save their financial information for use both online and offline. It was renamed Android Pay in 2015, expanding its capability to support NFC amounts paid in retail stores. In 2018, Google finally created Google Pay by fusing Google Wallet and Android Pay. The new platform offered Peer - to - peer payment options, the capability to store gift cards and loyalty cards, as well as the capacity for users to make transactions both in-person and online. Google Pay has developed further to accommodate the demands of its consumers. In conjunction with various financial institutions, the company expanded its services to include mobile banking alternatives in 2020 and introduced support for contactless payments made using QR codes (Cook and Raman, 2019).
Brief description of the technology used in digital business on the corporate financial performance and what it is used for.
The financial performance of a corporation is significantly impacted by the technology utilized in digital commerce. Virtualization, big information insights, intelligent systems (AI), and blockchain are a few examples of digital innovations used by enterprises. These innovations are used to improve efficiency, create better customer experiences, and streamline company processes. Cloud services allow businesses to save and retrieve information as well as applications from a distance, which lowers the cost of maintaining infrastructure and software. Businesses can efficiently personalize their offers by analysing client behaviour and preferences with the use of big data analytics. AI can be used to automate a variety of mundane jobs, including customer relations and promotional strategies, which will boost productivity and cut expenses. Digital technologies are crucial to a business's financial performance since it enables companies to increase productivity, cut expenses, and enhance consumer experiences.
The Technological platform, apps, and software versions used in the impact of digital business on the corporate financial performance.
A digital business's software platform, services, and software components can significantly affect how profitable it is as a whole. For instance, choosing the appropriate technical platform can aid a company in streamlining operations, improving customer satisfaction, and increasing production. Cost-saving measures, more revenues, and greater financial success may result.
Utilizing upcoming technologies like AI, deep learning, and blockchain can help a firm maintain a competitive edge by utilizing the correct apps and software versions. For instance, organizations can automate customer care, shorten response times, and boost customer satisfaction by utilizing AI-powered chatbots. Depending on the sector and unique business requirements, the effects of technology platforms, applications, and software components on company financial results (Vlachopoulou et al., 2021).
Industry or group, digital and dynamic technology has an impact on them
For many companies and organizations, the effect of digital business on corporate financial performance is becoming increasingly crucial. Digital platforms are being used by companies of all sizes to boost productivity and boost financial results, from small start-ups to massive multinationals. Businesses have been able to expand their consumer base, boost revenue, and improve operational efficiency thanks to digital technologies including cloud computing, online marketplaces, and mobile applications.
The corporate finance and accounting industries are progressively integrating digital business. The management of massive amounts of financial transactions and the gathering of information about financial performance are both done by financial professionals utilizing digital tools. Software-as-a-service (SaaS) solutions are also used by businesses to automate accounting procedures, improve customer service, and streamline supply chain management.
Business tool effectiveness and comparison to the past
Corporate financial performance is significantly impacted by the growing popularity of the digital business. Digital business tools make it easier to communicate more effectively, share information and resources, and collaborate with clients and business partners.
Companies have successfully improved their financial performance with the aid of digital business technologies. Companies have been able to save expenses and boost operational effectiveness because of it. The financial performance of businesses has benefited from the use of digital business technologies. Companies have been able to save expenses, enter new markets, and learn more about client preferences thanks to it. Digital business tools have been incredibly successful in assisting businesses to boost sales and enhance their financial performance (Syriopoulos et al., 2022).
SECTION 2
Relationship between Digital Technologies and Business/Management Theories
As organizations in all sectors continue to integrate digital technology into their operations, the effect of digitalization on their financial results is a subject that is receiving more and more attention. From advertising and client service through manufacturing and distribution, information devices have completely changed how organizations function. So, it should come as no surprise that business professionals are actively discussing how digital business will affect corporate financial performance. The interaction between traditional and contemporary conceptions of organizational and managerial structures and procedures and digital technology is intricate and varied. Digitalization is, on the one side, enabling companies to grow increasingly efficient and flexible to client needs, while, on the other hand, they are also opening up new potential for companies to enhance their reach and profitability. On the other side, as they frequently necessitate significant modifications to current organizational structures, procedures, and cultures, digital technologies are also posing new difficulties for traditional business models.
Technological advances have, at their most basic level, making it possible for companies to reduce costs and increase efficiency by automating operations like accounting, order processing, and customer support. Businesses can lower costs and raise the quality of the services and goods they provide by streamlining and automating business activities, which can eventually have a favourable effect on the financial performance of the company. Digitalization is empowering companies to build fresh methods for customer support, marketing, and product creation. Businesses may expand their consumer base, engage with customers more deeply, and develop new goods and services that can meet either current or future demand by utilizing digital technologies. This can significantly affect a company's financial performance because enterprises can boost earnings by generating additional income sources (Leksina et al., 2021).
Digital technologies are changing how companies run their operations, bringing about new organizational structures, processes, and management philosophies. This can help companies perform financially because they can react to market changes faster, cut expenses, and open up new development and expansion options. Digital technology and both traditional and recently developed ideas of organizational and managerial structures and procedures have a complicated and multifaceted relationship.
1. Social Cognitive Theories
In order to make wise decisions about their financial performance, individuals must have a clear view of and comprehension of their surroundings, according to social cognitive theory. According to this idea, people are likely to form attitudes and beliefs about their current financial status, which will affect the way they decide whether or not to engage in digital business (Otaye-Ebede et al., 2020).
2. Making Decision Theories
Decision-making theory examines the thought processes involved. This idea underlines how crucial it is to accurately assess the risks and benefits connected to various digital business solutions. People may make decisions that will improve their financial performance if they are aware of the benefits and hazards of the many digital business possibilities.
3. Quantitative theories
The quantitative theory examines how digital commerce affects a company's financial performance. Both the direct as well as indirect impacts of digital business on financial performance are examined in this theory, including the effects of digital platforms on acquiring and keeping clients, the effects of online advertising efforts on revenue, and the effects of digital technology on operating costs. Businesses can make wise decisions that will allow them to optimize their profits by knowing the quantifiable implications of digital business on corporate financial performance.
4. System Theories
According to the notion of systems, an organization's internal systems are intimately related to its financial success. It implies that a company's success is substantially influenced by its capacity to efficiently manage internal processes, including resource distribution, interactions, and decision-making. In order to take use of digital technology and the possibilities they present, businesses have had to modify their internal processes in response to the growth of digital commerce. This has made it possible for businesses to process more effectively, efficiently, and effectively.
5. Contingency theories
According to the contingency hypothesis, an organization's financial performance depends on how well its capabilities match up with the requirements of its external world. Companies must adjust to shifting economic conditions & cutting-edge digital technologies as digitalization continues to develop. Companies that can modify their capabilities to reap the benefits of the most recent technological advancements will have the opportunity to surpass their rivals and experience higher economic security.
E-commerce Business model
On the financial performance of many organizations, digital business transformation has had a significant impact. As e-commerce has expanded and the internet has grown, businesses can now transact web presence in several ways. There are six main kinds of e-commerce models that can be utilized depending on the type of business and the market segmentation.
The most typical e-commerce approach is known as business-to-consumer, in which companies sell goods or services to customers directly. Retail portals, online travel agencies, and media streaming platforms can all be considered here.
When consumers sell goods or services to businesses (B2C), consumer-to-business is the opposite. Freelance websites are an illustration of this where businesses can employ independent contractors to carry out a certain activity.
Businesses offer goods or services to other businesses in a transaction known as B2B. For example, software providers offer their services to other businesses or suppliers selling raw materials to producers.
C2C refers to the direct sale of goods or services by customers to other consumers. Usually, websites like eBay, Craigslist, and Etsy are used for this kind of online trading.
Businesses that sell to government organizations or other organizations are known as business-to-administration enterprises. For instance, this kind of e-commerce is used to submit grant applications and bid on government contracts.
Consumers can also provide goods or services to organizations like governmental bodies or educational institutions through the Consumer-to-Administration channel. When people apply for government aid or file their taxes online, for instance, this happens (Aspara et al., 2021).
The financial results of many different organizations have been significantly impacted by these six different e-commerce model types. In addition to lowering overhead expenses related to traditional brick-and-mortar establishments, businesses can now reach more consumers. Also, by utilizing e-commerce methods, organizations have been able to increase their level of market competition globally and seize previously unattainable prospects.
Conclusion
Digital commerce has an unmistakable effect on a company's financial performance. Businesses have been able to successfully integrate digital technologies into their company operations because of the online infrastructure's quick development, the rapid advancement of digital technology, and the creation of new business models. Businesses have benefited as a result of greater profitability, consumer engagement, and efficiency. Digital business has established itself as a potent tool for enhancing an organization's financial performance and for forging advantageous market positions. Thus, companies need to keep making investments in digital technology and tactics to be competitive in the constantly shifting business environment.
Reference list
- Aspara, J., Grant, D.B. and Holmlund, M., (2021). Consumer involvement in supply networks: A cubic typology of C2B2C and C2B2B business models. Industrial Marketing Management, 93, pp.356-369. https://doi.org/10.1016/j.indmarman.2020.09.004
- Bican, P.M. and Brem, A., (2020). Digital business model, digital transformation, digital entrepreneurship: Is there a sustainable “digital”?. Sustainability, 12(13), p.5239. https://www.mdpi.com/2071-1050/12/13/5239
- Cook, W. and Raman, A., (2019). National Payments Corporation of India and the remaking of payments in India. Consultative Group to Assist the Poor Working Paper, pp. 1-28. https://www.cgap.org/sites/default/files/publications/2019_05_07_NPCI_Working_Paper.pdf
- Leksina, A., Nesmyslenov, A. and Bryzgalina, M., (2021). Digital business model of the agricultural organization of the region. Scientific Papers Series Management, Economic Engineering in Agriculture and Rural Development, 21(3), pp.529-538. http://managementjournal.usamv.ro/pdf/vol.21_3/Art61.pdf
- Otaye-Ebede, L., Shaffakat, S. and Foster, S., (2020). A multilevel model examining the relationships between workplace spirituality, ethical climate and outcomes: A social cognitive theory perspective. Journal of Business Ethics, 166(3), pp.611-626. https://link.springer.com/article/10.1007/s10551-019-04133-8
- Syriopoulos, T., Tsatsaronis, M. and Gorila, M., (2022). The global cruise industry: Financial performance evaluation. Research in Transportation Business & Management, 45, p.100558. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7519395/
- Ukko, J., Nasiri, M., Saunila, M. and Rantala, T., (2019). Sustainability strategy as a moderator in the relationship between digital business strategy and financial performance. Journal of Cleaner Production, 236, p.117626. https://doi.org/10.1016/j.jclepro.2019.117626
- Vlachopoulou, M., Ziakis, C., Vergidis, K. and Madas, M., (2021). Analyzing agrifood-tech e-business models. Sustainability, 13(10), p.5516. https://www.mdpi.com/2071-1050/13/10/5516/pdf
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