Value creation in the digital economy: The digital economy is set to change the way

value is created. But what does the digital economy actually mean and how can it influence value
creation?

When we talk about digitization today, we mean the impact of digital technologies on the
economy and society. A change that is often termed “digital transformation”.
New forms of digital value creation are changing the structures of value creation itself:
intermediaries in value chains, such as retailers or banks, are changing, or even becoming
superfluous. New types of intermediaries are emerging, such as those in mortgage lending, retail
or digital payment transactions.

This transformation of intermediaries is making new forms of value creation process

possible

One important development is interactive value creation. Customers are actively integrated into
the shaping of a product – either in its design (open innovation) or in its final form (mass
customization). In the retail sector in particular, a dramatic form of transformation is taking
place: traditional intermediaries (e.g. retailers) have long since ceased to be the first point of
contact for customers looking to make a purchase, with various online portals (= intermediaries)
instead helping them choose a product or service. Where the social networking of customers via
social media plays an important role in the buying process, this is known as social commerce,
while dialogue-oriented forms of exchange between users and companies, e.g. via chatbot or
voice assistant, are referred to as conversational commerce.

Traditional value creation processes are changing

It is now apparent that in the context of the digital transformation, traditional value creation
processes are undergoing massive change – primarily as a result of the emergence of new
intermediaries. In the area of services in particular, digitization makes entirely new forms of
value creation possible: content in digital format, for example, can be freed from its context and
pieced back together in completely new ways, e.g. for news, small ads or music (e.g. playlists)
and films. Existing services can also be rearranged to enable Mobility as a Service (MaaS) for
example. With sensors and communication technology, physical products become intelligent
products that generate added value through additional services, from Barbie dolls, TV sets and
smart watches to networked clothing and intelligent lighting that also acts as a burglar alarm. It is
becoming clear that the digital transformation at different levels is enabling new forms of value
creation that are a hallmark of the sustainable transformation towards a digital economy.

ERP systems typically cover all aspects of business operations and commonly
provide:

 An integrated system
 Common database 
 Real-time operation
  Support for all applications/components
 Common user interface across application/components
 On-premise, cloud hosted, or SaaS deployment

ERP software has the ability to collect and compare metrics across departments
and provide a number of different reports based on roles or specific user
preferences. The data collected makes finding and reporting on data faster and
gives a complete view of  business performance with complete insights on how
resources are being spent. 

ERP synchronizes reporting and automation by reducing the need to maintain

separate databases and spreadsheets that would have to be manually merged to
generate reports. This combined data collection and reporting offers valuable
insight, such as where to cut costs and streamline processes, providing the
information  to make real-time business decisions.