Digital Business Functions

Objectives
• Learn how to leverage digitization to improve business function
performance
• Understand how digitization is transforming various business functions
and organization units
Digital Marketing
The Evolution of Marketing Across Decades
• 1950s: Marketing was primarily done through TV, with only a few
products serving specific customer segments. At this time,
advertisements targeted a mass audience with general messages. For
example, you might have had just a few products catering to different
skin types (oily, normal, dry).
• 1980s: The rise of cable television created more channels, allowing
companies to target different consumer segments with tailored
messages on specific channels, such as targeting younger or older
audiences.
The Evolution of Marketing Across Decades
• 1990s: The technology revolution led to data-driven marketing, where
companies could segment their audience more precisely, going from a
handful of segments to hundreds. This was when direct marketing,
direct mail, and customization started to grow.
• Today (AI-driven marketing): AI has taken marketing to the next level,
where companies can now personalize their marketing efforts for
millions of individual customers, tailoring products, offers, and
services to their specific needs and preferences.
The Value Marketing Brings
One constant truth in marketing is the value that the product brings to
the consumer.
A company can advertise all the ingredients in its product (like aloe
vera in a moisturizing cream), but what the consumer truly cares about
is how the product makes them feel.
Personalized Marketing Process
• Customer Acquisition
• Customer Retention
• Customer Growth
• Consumer Advocacy
Digital Finance
Fintech is not entirely new
Term “Fintech” sounds modern
Many technologies have reshaped finance:
• The first credit card (1950)
• ATMs (1967)
• Interbank systems like SWIFT (1970s)
• Bloomberg (1981), which provided real-time financial data
• The launch of online banking by ING Direct (1997)
what makes today’s Fintech different and
disruptive?
• The 2008 Global Financial Crisis
• The emergence of Bitcoin (2009)
• The rise of smartphones, the Internet, and social media
Changing consumer behavior
• Consumers can now switch banks or services with a single tap.
• They expect personalized, user-friendly, transparent experiences.
• Fintech wins because it offers:
• Lower prices
• Better user experience
• Social proof and online feedback
Legal and technological enablers
• Regulations like PSD and PSD2 (Payment Service Directive: in
Europe) forced banks to open up customer data via APIs (with
customer consent).
• This allowed startups to:
• Help people manage their savings
• Compare interest rates
• Avoid overdrafts
Tech giants entering the financial space

• Companies like Amazon now offer financial services to small

businesses—on par with big banks like Wells Fargo.
• AI and machine learning help Fintech deliver tailored, affordable
financial solutions using user data.
• Cloud computing enables startups to scale quickly and cheaply.
Relationship between traditional banks and
Fintechs
• They're not just competitors but also “frenemies”:
- Fintechs rely on banks for product distribution and regulatory
licenses.
- Banks rely on Fintechs to modernize, innovate, and scale using new
technologies.
The strategic question
In this competitive environment, businesses must ask:
• Should we build our own solution?
• Should we partner with Fintechs?
• Should we imitate successful models?

The right answer depends on the financial sector: banking, insurance,

payments, investing, or compliance.
Digital Operations
Why do companies exist?
• Companies exist to create value by offering products or services that
meet unmet needs in the market.
Example:
- Henry Ford created the assembly line to mass-produce cars at a lower
cost → more people could afford them.
- Tesla developed high-quality electric vehicles to meet the growing
demand for eco-friendly transportation.
- Serivces: Uber, Lyft
What is Operations Management?
Operations management is about how companies:
• Receive inputs (materials, labor, technology…)
• Transform them into value
• Deliver that value to customers
Excellent operations management
1. Alignment with value proposition:
- If offering luxury goods/services: operations focus on quality and
customer experience
- In cost-competitive markets: operations focus on reducing waste and
cost, while still maintaining acceptable quality
Excellent operations management
2. Standardized process
- Great companies have repeatable, consistent systems:
- Use systems like the Toyota Production System, Lean, Agile, or
Design Thinking
- The goal: ensure consistent, efficient production or service delivery
Excellent operations management
3. Proactive mindset on trade-offs
- Instead of choosing either low cost or high quality, excellent firms
aim for both
- This continuous improvement mindset is a hallmark of strong
operations management
The global supply chain challenge
Due to global trade agreements and the standardization of shipping
containers, supply chains:
• Are now complex and international
• Often suffer from blind spots and inefficiencies
Digital technologies can help manage these challenges more effectively
Three tech trends shaping operations
management
Digitization
• Use of IoT, sensors, smartphones, wearables… to collect data
• This data helps optimize operations and enhance customer offerings
Automation
• Robotics, autonomous vehicles, and AI are enabling workflow automation
• Frees up human workers to focus on higher-value tasks
Enhancement
• New tech also changes what companies can offer
• Example: With Augmented Reality (AR), experts can remotely guide
customers in real-time without traveling → faster, more efficient service
What won’t change?
• Companies still need to align their operations with the value they
promise
• They must have a repeatable and reliable system (Lean in Toyota,
Agrile, Design Thinking...)
• And they must embrace emerging technologies to deliver more value
in new ways
Digital Communications
Timeless Communication Principles
• Pathos: Emotional appeal (e.g., commercials with babies or pets)
• Logos: Logical appeal (e.g., comparing product features)
• Ethos: Ethical appeal (e.g., corporate social responsibility)
These principles continue to shape advertising and public relations
strategies.
Digital Marketing & Consumer Data
Companies use digital platforms to:
• Personalize recommendations (e.g., Amazon)
• Gather consumer preferences (e.g., Cadbury’s Facebook campaign)
• Achieve higher engagement and conversion rates
Workplace Communication Tools
Digital platforms have revolutionized internal communication:
• Tools like Slack, Trello, Basecamp, Zoom support real-time
collaboration, task tracking, and project transparency.
• Video conferencing transcends geographical boundaries.
• Messaging apps keep communication flowing beyond office hours.
Finance & Consumer Empowerment
Digital communication in finance allows:
• Real-time stock monitoring through apps
• Direct consumer investment via GoFundMe, Kickstarter
• Greater control over personal financial decisions
Artificial Intelligence (AI)
AI enables automation in content creation:
• News outlets use AI to write templated articles (e.g., Bloomberg,
Associated Press)
• Frees journalists to focus on investigative reporting
AI is also embedded in daily life:
• Smart assistants like Alexa and Siri manage home functions
• Deliver real-time updates and perform tasks
Looking Ahead
• Digital communication will expand further
• Smart technology will become more trusted in everyday life (e.g.,
transportation)
• Customized, authentic, and transparent messages will continue to be
essential
Digital Policy
Three Cs
• Community – The networks of people and organizations connected to
a business, such as customers and employees.
• Content – Any form of digital data (text, images, video, code) created
or shared by users or the company.
• Commerce – All forms of trade, including ads, sales, and even payroll.
Key Issues in Digital Policy
• Copyright Law: With software now considered protected content,
companies entering digital spaces are entering the copyright space,
often unintentionally. Legal battles like Google vs. Oracle can now
affect any business creating software.
• Content Moderation: Companies are allowed to moderate user
content on their platforms (thanks to early legislation), but new
debates are challenging this protection. Social media policies now
impact nearly every company that markets online.
Key Issues in Digital Policy
• E-Commerce and Taxation: Online sales tax is now more
standardized, but the broader impact of e-commerce laws extends to
data usage, infrastructure, and privacy.
• Network Infrastructure: Previously, mobile and fixed internet
providers were regulated differently. Since 2018, both can manage
data on their networks if they disclose this, which can cause app
issues that confuse users—and companies get blamed.
• Data Privacy: With little federal oversight in the U.S., state and
international regulations like GDPR and CCPA now set the standard.
Businesses must be ready to let users access or delete their data—
even if they just make a smart lightbulb
Digital HR
The Origins of Human Resource Management
• Began in the 18th century during the Industrial Revolution.
Scientific Management (Early 1900s)
• Led by Frederick Taylor (time & motion studies).
• Focus on measurement and efficiency.
• Workers were treated as resources to optimize.
Core HR Questions
• How to attract, retain, and motivate the best people?
• Early HR involved measuring people and using data to inform business
decisions.
Digital Transformation in HR
Technology Advances
• Smart apps, wearables, sociometric badges → track behaviors with
precision.
• We now measure not just work tasks, but also sleep, mood, conversations,
health, etc.
• Rise of People Analytics
• Using data-driven approaches to manage employees.
• AI & Machine Learning help analyze massive data sets and inform
decisions.
• HR becomes more sophisticated, but the core focus on productivity
remains.
New Challenges in the Digital Age
Evolving HR Questions
• How should we define talent today?
• What is the role of automation and AI in the workforce?
• How do we define performance, merit, and leadership in the future?
Key Concerns
• Fairness and bias reduction.
• Enhancing employee engagement and meaningful work.
Future Outlook
• We must shift from seeing technology as just a tool → to seeing it as a
teammate.
• Human-technology collaboration is crucial to shape the future of HR.