FINAL REPORT

SUBJECT: DIGITAL TRANSFORMATION

Group’s name: …GROUP 2….........................................

Lecturer: …...........VO PHUOC TAI...............................

Year: ……..............2023..................

Class:……...............B06E................

Ho Chi Minh City, 2023

 FINAL REPORT

SUBJECT: DIGITAL TRANSFORMATION

Class: .....................B06E................................

Group’s name: ….GROUP 2..........................

Date of submit: ....7/1/2024.............................

Group’s members:

Full name Assigned tasks Contribution (%)

Nguyễn Bá Linh Chapter 5 100%

Trần Tôn Nữ Thục Anh Chapter 4 100%

Võ Xuân Cẩm Tiên Chapter 1 100%

Nghiêm Thiên Vỹ Chapter 3 100%

Nguyễn Đức Duy Chapter 2 100%

Ho Chi Minh City, 2023

 CONTENTS

CONTENTS .............................................................................................................................. 1

LIST OF CHARTS, TABLES, IMAGES ................................................................................. 6

ABSTRACT .............................................................................................................................. 7

CHAPTER 1. OVERVIEW OF DIGITAL TRANSFORMATION. CONTEXT OF DIGITAL

TRANSFORMATION AND THE REASONS WHY LEADS TO DIGITAL
TRANSFORMATION IN BUSINESSES ................................................................................ 8

1.1 Digital transformation context ........................................................................................ 8

1.1.1 Definition of digital transformation ......................................................................... 8

1.1.2 External factors ........................................................................................................ 9

1.1.3 Internal factors ....................................................................................................... 12

CHAPTER 2. TECHNOLOGIES DRIVES TO DIGITAL TRANSFORMATION. ............. 15

2.1 Digital technology landscape ........................................................................................ 15

2.1.1 The development process of digital technology .................................................... 16

2.1.2 Digital technology in business ............................................................................... 17

2.1.3 Digital technology in society ................................................................................. 18

2.2 Automated decision-making systems ........................................................................... 19

2.2.1 Decision support system ........................................................................................ 20

2.2.2 Expert systems and machine learning .................................................................... 23

2.2.3 Supply chain management systems ....................................................................... 25

2.2.4 Specialized decision-making systems and other applications ............................... 27

CHAPTER 3. ANALYSIS OF DIGITAL TRANSFORMATION TOOLS (BIG DATA, AI,
IOT, ELASTIC CLOUD...) .................................................................................................... 30

3.1 Big Data ........................................................................................................................ 30

3.1.1 Definition of Big Data ........................................................................................... 30

3.1.2 Example of Big Data.............................................................................................. 30

3.1.3 The Vs of Big Data ................................................................................................ 31

3.1.4 How does Big Data work? ..................................................................................... 32

3.1.5 Benefits of Big Data .............................................................................................. 33

3.1.6 Challenges of implementing Big Data Analytics .................................................. 34

3.2 Internet of Things (IoT) ................................................................................................ 35

3.2.1 Definition of IoT .................................................................................................... 35

3.2.2 Example of IoT applications .................................................................................. 36

3.2.3 Benefits of IoT ....................................................................................................... 37

3.2.4 Risks and Challenges in IoT .................................................................................. 37

3.2.5 The technologies that make IoT possible .............................................................. 38

3.3 Artificial Intelligence .................................................................................................... 39

3.3.1 Definition of AI ..................................................................................................... 39

3.3.2 Types of artificial intelligence—weak AI vs. strong AI........................................ 41

3.3.3 Deep learning vs. Machine learning ...................................................................... 41

3.3.4 Artificial Intelligence applications......................................................................... 42

3.3.5 AI benefits and dangers ......................................................................................... 44

 3.4 Elastic Cloud ................................................................................................................. 46

3.4.1 Definition of Elastic Cloud .................................................................................... 46

3.4.2 Features of Elastic Cloud ....................................................................................... 46

3.4.3 Applications of Elastic Cloud ................................................................................ 48

3.4.4 Benefits of Elastic Cloud ....................................................................................... 49

3.4.5 Risks of Elastic Cloud............................................................................................ 50

3.5 Blockchain .................................................................................................................... 51

3.5.1 Definition of Blockchain ....................................................................................... 51

3.5.2 Why blockchain is important? ............................................................................... 51

3.5.3 Key elements of a Blockchain ............................................................................... 52

3.5.4 How blockchain works. ......................................................................................... 52

3.5.5 Benefits of Blockchain........................................................................................... 53

3.5.6 Types of Blockchain networks .............................................................................. 53

3.5.7 Features of Blockchain .......................................................................................... 54

3.5.8 Applicability of Blockchain ................................................................................... 55

3.5.9 Pros and Cons of Blockchain ................................................................................. 56

CHAPTER 4. THE DIGITAL ENTERPRISE (THE DIGITAL ADVERTISING) ............... 59

4.1 Definition of targeted marketing and advertising ......................................................... 59

4.2 Benefits of utilizing digital channels ............................................................................ 59

4.2.1 Increased reach and visibility ................................................................................ 59

4.2.2 Ability to target specific audience segments ......................................................... 60

 4.2.3 Cost-effective compared to traditional advertising................................................ 61

4.3 Case study - The digital enterprise ............................................................................... 62

4.3.1 About L’Oreal ........................................................................................................ 62

4.3.2 About CeraVe ........................................................................................................ 62

4.3.3 Digital Marketing of CeraVe ................................................................................. 63

4.3.4 Compare to the competitor - Cetaphil ................................................................... 67

4.3.5 Lessons learned and best practices ........................................................................ 69

4.4 Conclusion .................................................................................................................... 70

4.4.1 Recap of the importance of utilizing digital channels for targeted marketing and
advertising ....................................................................................................................... 70

4.4.2 Potential for business growth and success through effective implementation ...... 71

CHAPTER 5. THE CHALLENGES WHEN BUSINESSES RESIST DIGITAL

TRANSFORMATION AND THE BENEFITS WHEN BUSINESSES UNDERGO DIGITAL
TRANSFORMATION. ........................................................................................................... 72

5.1 Advantageous factors if businesses conduct digital transformation ............................. 72

5.1.1 Improve performance and boost productivity........................................................ 72

5.1.2 Good use of resources ............................................................................................ 72

5.1.3 Enhance customer experience and value. .............................................................. 73

5.1.4 Gain a competitive advantage in the market.......................................................... 73

5.2 Disadvantageous factors if businesses conduct digital transformation ........................ 76

5.2.1 Not enough information for market research and product development ............... 77
 5.2.2 Missed opportunities to find potential employees ................................................. 78

5.2.3 Information without alignment in business management ...................................... 79

5.3 Difficult to achieve goals in customer care: ................................................................. 82

5.4 Difficulties in reaching customers: ............................................................................... 83

CONCLUSION ....................................................................................................................... 86

REFERENCES ....................................................................................................................... 87
 LIST OF CHARTS, TABLES, IMAGES
Figure 1. 1 Spending on digital transformation technologies and services worldwide from
2017 to 2026 (in trillion U.S. dollars) ..................................................................................... 11

Figure 1. 2 Main regulators of the digital economy in Vietnam ............................................ 12

Figure 2. 1 What disturbs every business ............................................................................... 17

Figure 2. 2 The interaction-based digital transformation framework ..................................... 19

Figure 4. 1 Official website of CeraVe ................................................................................... 63

Figure 4. 2 Fanpage of CeraVe Vietnam ................................................................................ 64

Figure 4. 3 CeraVe’s official TikTok account ........................................................................ 66

Figure 4. 4 KOLs/KOCs use the CeraVe’s products and use affiliate links .......................... 67

Figure 4. 5 Top 5 best-selling facial cleanser brands in March on Shopee and Lazada Source:
YouNet ECI ............................................................................................................................ 68

Figure 5. 1 Nike's profits......................................................................................................... 75

Figure 5. 2 GDP statistics for the Asia Pacific region ............................................................ 76

Figure 5. 3 Illustration of a digital transformation system in a manufacturing process ......... 81

Figure 5. 4 Statistics on spending on online shopping 2019-2020 ......................................... 83

Figure 5. 5 User traffic statistics at Amazon.com................................................................... 84

Figure 5. 6 Social network user traffic statistics..................................................................... 85

 ABSTRACT
The report titled “Digital Transformation” was meticulously conducted by the members of
group 2. The primary objective of this report was to delve into the profound impacts of digital
transformation on various aspects of society, with a particular emphasis on its implications for
businesses.

The report embarked on an in-depth exploration of the diverse range of technologies that are
instrumental in the process of digital transformation. It provided a detailed analysis of several
digital transformation tools that are at the forefront of this revolution. These include, but are
not limited to, Big Data, Artificial Intelligence (AI), the Internet of Things (IOT), and Elastic
Cloud. Each of these tools was examined thoroughly to understand their role and significance
in the digital transformation journey.

The report underscored the critical importance of digital transformation and digital integration
in today’s rapidly evolving digital landscape. It highlighted the myriad benefits that
individuals and businesses alike can derive from this digital transformation process. These
benefits range from improved efficiency and productivity to enhanced customer experience
and competitive advantage. Furthermore, the report presented a case study of the CeraVe
brand, demonstrating how the global beauty giant L’Oreal has harnessed the power of digital
transformation. It shed light on L’Oreal’s strategic application of digital transformation to its
e-commerce operations and its effective utilization of digital marketing strategies. This case
study served as a testament to the myriad benefits that businesses around the world can reap
in the era of Industry 4.0 through the adoption of digital transformation strategies.

The report posited that digital transformation represents a significant leap forward for society
and the times we live in. It emphasized that embracing digital transformation is not merely an
option but a necessity for businesses and individuals to thrive in the digital age.
CHAPTER 1. OVERVIEW OF DIGITAL TRANSFORMATION. CONTEXT OF
DIGITAL TRANSFORMATION AND THE REASONS WHY LEADS TO DIGITAL
TRANSFORMATION IN BUSINESSES
1.1 Digital transformation context

The narrative of digital transformation is no longer a bizarre one, as it appears to be an

essential component for any firm that wants to continue to thrive and flourish in today's
society. Especially when the local surroundings and global context have undergone significant
changes. As a result, companies have to be willing to refresh and adapt to "defend" themselves
against the "awakening" of the big wave of the technological revolution and the digital
transformation process. Let's find out what scholars say and define digital transformation.

1.1.1 Definition of digital transformation

“Digital transformation is better thought of as continual adaptation to a constantly changing

environment.” (Kane, 2017)
“Digital transformation is the fundamental rewiring of how an organization operates.” (Eric
Lamarre, 2023)
“Digital transformation is the process of integrating digital technologies into all parts of an
organization, such as products, services, or operations, to deliver value to customers.” (What
Is Digital Transformation? Definition, Strategy, and Examples, 2023)
“Digital transformation is concerned with the changes digital technologies can bring about
in a company’s business model.” (Hansen R, 2016)
Digital transformation is the combined effects of several digital innovations bringing about
novel actors (and actor constellations), structures, practices, values, and beliefs that change,
threaten, replace, or complement existing rules of the game within organizations, ecosystems,
industries, or fields. (Hinings B., Gegenhuber T., Greenwood R., 2018)
In simple terms, digital transformation is the process of digitizing occupations to create
favourable circumstances for integration and connection.
From there, it can be seen that digital transformation is an unavoidable process, and it emerges
as a concurrent opportunity and challenge offered to every business, organization, or
individual on the route to attaining their goals. pepper. So, why does the foregoing process
occur? Does digital transformation result from the internal dynamics of each institution, or is
it a forced situation? To arrive at a solution, the writers will evaluate all relevant factors and
make suitable conclusions.
1.1.2 External factors

1.1.2.1 In the world

Considering the global context when analyzing the current situation. One of the most
impactful events that has shaped our present circumstances is the COVID-19 pandemic, which
forced people to limit direct contact with each other. This was a crucial measure to prevent
the virus from spreading, but it also had far-reaching consequences on our daily routines and
the way we work. As a result, individuals and organizations alike have had to adapt to this
new reality, which has led to significant changes in the way we communicate, collaborate and
conduct business. Despite the challenges, this crisis has also spurred innovation and creativity,
as people have found new ways to connect and work together virtually. It remains to be seen
how these changes will shape our future, but one thing is clear: the impact of Covid-19 will
be felt for years to come. For instance: an estimated $6.8 trillion direct investment in digital
transformation between 2020 and 2023 (Jackson-Barnes, 2023)
Recent years have witnessed a significant change in people's lifestyles, especially among the
young generation, which comprises the majority of Generation Z. This change is reflected in
their daily routines and habits, which have evolved rapidly. One notable aspect of this shift is
the rise in electronic payment methods, particularly those utilizing e-wallets. These payment
methods have become increasingly popular due to their convenience and ease of use. E-wallets
are digital wallets where users can store their payment information, such as credit card details
or bank account information, and use it to make payments for various goods and services. E-
wallets are not only convenient but also secure, as they use encryption to protect users'
personal and financial information. As a result, they have become one of the most common
payment methods among the younger generation. (Wiliandri, 2020)
Furthermore, as technology advances, many new features are integrated into e-commerce
platforms (such as Shopee, Amazon,...) or popular social networks (such as Facebook,
Instagram, Twitter (X),...), which helps shorten and appears to completely blur the barrier
between reality and the virtual world. As a result, many organizations exploit and re-establish
competitive advantages in order to build a fresh gap with enterprises in the same industry.
Simultaneously, governments across the globe are increasingly embracing sustainable digital
transformation as a means of achieving their long-term goals. In this context, the example of
Dubai stands out as a remarkable success story. The city is currently undergoing a digital
revolution, with a clear objective of eliminating paper usage in all administrative activities by
the end of 2021. This ambitious campaign has already yielded impressive results, with 45
government entities in Dubai saving a staggering 336 million units of paper since 2018. These
savings amount to Dh1.3 billion (approximately $350 million) in related costs and have freed
up over 14 million man-hours. The government's efforts to promote digital transformation are
expected to create a ripple effect across various sectors, boosting the UAE's position as a
leader in technological innovation and sustainable development (Bhunia, 2018). Therefore,
the demand to embrace digital transformation has become a crucial factor for organizations.
Therefore, in the current business landscape, the adoption of digital technologies has become
a critical factor for companies to remain competitive and sustain growth. Moreover, many
organizations are undertaking digital transformation initiatives to streamline their operations,
enhance customer experiences, and stay ahead of the curve. This shift towards digitalization
has been driven by a variety of factors (including the element authors had recently addressed).
That’s why firms need to take action and embark on their digital transformation journey to
meet up with the demands of changing consumer behaviour, the increasing availability of
advanced technologies, and the pressure to optimize costs and improve efficiency. Ultimately,
digital transformation has become a key driver of innovation and growth for businesses across
industries.

Figure 1. 1 Spending on digital transformation technologies and services worldwide from

2017 to 2026 (in trillion U.S. dollars)

As per the findings of Statista, the extent of global digital transformation is witnessing a
continuous expansion, and the financial allocation for this process has shown substantial
growth in recent years, with a projected continuation in the foreseeable future.
1.1.2.2 In Vietnam
That's the globe, but how are
things in Vietnam? According
to research, Vietnam placed
86th out of 193 nations and
territories in digital governance
last year (2022) (Chung, 2023).
(2019, Cameron)

Figure 1. 2 Main regulators of the digital economy in

Vietnam
It can be observed that the digital transformation process is taking place in all aspects of
Vietnam; it is a comprehensive system that is tightly organized in important sectors of the
country via departments, branches, and ministries from the government.

1.1.3 Internal factors

On the other side, digital transformation is triggered by each company's desire to enhance
profitability. That might be a reference to the need to reinvent ourselves before being
decimated by other industry competitors. The self-awareness required to sustain the
connectivity and operation of the entire organization in the face of disturbances from external
forces is a typical component to come. Additionally, to prepare first is to arm first; nothing
beats it when each organization improves itself to keep ahead of any trend and use it as a
chance to advance.

Particularly, businesses to keep up with consumer preferences so they can provide a smooth
and enjoyable purchasing experience. Customers expect to have control over every aspect of
the process, especially when it comes to convenience, speed, and ease. They want to be able
to place orders online, have items delivered to their homes, and make purchases in person,
with all experiences being equally satisfying. To meet these expectations, businesses need to
carefully understand their customers' needs and tailor their strategies accordingly to generate
profits.
Besides, in today's fast-paced world, organizations have realized the importance of efficient
and connected processes. This not only helps in reducing errors but also enables them to
provide quicker solutions to the problems that arise. For instance, cloud-based applications
can be used to manage employee access and permissions, categorize and define appropriate
restrictions to improve connection efficiency for employees and businesses, irrespective of
their location - be it at the workplace, working from home or even travelling to other locations
on business.
Decision-making has become more complex and data-driven. It is no longer sufficient to rely
on qualitative information alone. Every decision needs to be backed by justifications,
arguments, and evidence based on quantitative data sources. Such data sources allow us to
measure and make judgments about various aspects of a business, such as project performance,
customer engagement, and more. Thus, the data sources we use today are not just historical
records of past performance, but they are predictive. They allow us to anticipate future
outcomes and trends, and make decisions accordingly. For instance, we can use predictive
analytics to identify potential risks and opportunities and take proactive measures to mitigate
or capitalize on them. Plus, data sources are also used to establish the touch points between
customers and companies. By analyzing customer behaviour and preferences, companies can
identify the key moments of interaction with customers, and personalize their offerings
accordingly. This helps companies to improve customer satisfaction and loyalty, and finally
drive growth and sustainable profitability.
Employees should be upgraded, their workloads and working hours should be optimized, and
work efficiency should be increased. The digital transformation process provides effective
assistance in the form of tools and consulting to establish initiatives and a strong basis for each
individual's formation and growth.
In conclusion, digital transformation is more than just a passing fad; it is also a watershed
moment for many firms in the process of modernizing and developing sustainable values for
the future of the business. In the following chapters, the authors will go further and dive into
related problems.
CHAPTER 2. TECHNOLOGIES DRIVES TO DIGITAL TRANSFORMATION.
2.1 Digital technology landscape

The world's technology is changing at breakneck speed “The changes that the digital
technology causes or influences in all aspects of human life” (Stolterman & Fors, 2004, p.3).
The increasing usage of and reliance on digital technologies is ushering in a myriad of major
changes, reshaping not only the business landscape but also the very fabric of society.

Using new technology, each individual can more easily build a daily schedule for work,
entertainment, living, etc., access products at more reasonable prices, and participate in social
networks. new, better educational opportunities and fewer manual labor jobs as job trends
have changed.

The impacts on individuals, businesses, organizations,... and society in general create

influence and promote each other's development, for example, people will choose digital
technology more often, increasing work productivity. By enhancing individuals' digital skills,
companies will have the opportunity to access a better skilled workforce

Digital transformation creates potential for sectors: commerce, industry and society in general,
it is supported by a series of new interconnected technologies. This technology has made
certain jobs easier, performing tasks that were previously impossible and designing better
services and products.

Digital transformation is not about innovating a single technology, in fact, it is a series of other
technologies that have the ability to come together and be successfully implemented to a level
where they can be used. used for commercial use. We have gone through a decades-long
history of digital technology.
2.1.1 The development process of digital technology

According to the history of digital development, we can easily realize that we have just gone
through a few decades, the world has had many great changes opening up a new era of
technology. According to the digital technology axis, we are divided into the 5 largest waves
of innovation in history.

The first wave of technology was in the 70s with initial IT solutions for the automation of
simple tasks using computer technology (Legner et al., 2017; Venkatraman, 1994)

Later, internet or ICT solutions for faster information sharing and connectivity become
prevalent (Heavin & Power, 2018; Legner et al., 2017)

With the massive rise in popularity of digitalized tasks and the internet, more integration
solutions arrived such as applications to connect a large amount of data, users, and computers
in smart software solutions (Heavin & Power, 2018)

The fourth and current wave, as portrayed by most models, entails the massive rise in social
media, mobiles, analytics, cloud computing, and the Internet of Things (SMACIT) (Chanias,
2017; Legner et al., 2017; Vial, 2019)
 Figure 2. 1 What disturbs every business
In the next wave of technology, including new technologies that have not yet fully exploited
their potential such as blockchain (and smart contracts), robotics (including 3D printing),
artificial intelligence (AI), and cognitive and quantum computing (BRAICQ) (Schwab, 2015;
Verhoef et al., 2019) It is reshaping the way people work, learn and even automate decision
making for humans

2.1.2 Digital technology in business

In the business sector, the adoption of digital technology is disrupting traditional models and
paving the way for innovative approaches to operations, communication and customer
engagement, companies must gradually change to adapt to the market if you don't want to be
left behind
First, organizations started to digitize or automate internal business processes and individual
operations. After that, the connectivity between different business processes, suppliers,
systems, or customers got transformed from manual and physical to digital. The next
transformation took place in the offering of the business. Products and services were
digitalized and integrated to follow the rapidly changing needs and demands (Hartl & Hess,
2017; Henriette et al., 2015; von Leipzig et al., 2017). The increased velocity of digital
innovation that became apparent at this point, encouraged companies to start changing their
organizational structure to be more agile and innovative to respond quickly to changes in the
market

2.1.3 Digital technology in society

Moreover, the impact extends far beyond the corporate environment. Society as a whole is
undergoing a transformative journey fueled by the digital revolution. The ways individuals
communicate, access information, and make decisions have been fundamentally altered. First,
the daily tasks people perform in their private lives and at their jobs, in line with the business
transformation, have changed considerably compared to the pre-digital era (Reddy & Reinartz,
2017). Secondly, communication has changed significantly. Not only the medium but the
speed and ubiquitous reach have had a drastic impact on the world. The ubiquity of
smartphones, the prevalence of social media, and the interconnectedness facilitated by the
internet have given rise to a hyper-connected global community.

The digital transformation is not merely a technological shift it is a cultural and societal shift.
The boundaries between physical and digital spaces are becoming increasingly blurred,
creating new opportunities and challenges. For example, more and more people can work and
perform basic services at home, we can study and work online with just a laptop or phone. All
of this is changing the possibilities of how to structure our society (Reddy & Reinartz, 2017).
 Figure 2. 2 The interaction-based digital transformation framework

2.2 Automated decision-making systems

Automated decision-making involves decisions made through purely technological means

without human input. However, Automated decision-making technologies and applications
can take many forms ranging from decision-support systems that make recommendations for
human decision-makers to act on, sometimes known as augmented intelligenceor shared
decision-making to fully automated decision-making processes that make decisions on behalf
of individuals or organizations without human involvement.

Automated decision-making systems increasingly permeate all aspects of society

(AlgorithmWatch 2019; Cath 2018). Examples of the use of ADMS are abundant and include
potentially sensitive areas like medical diagnostics (Grote and Berens 2020) and the issuing
of loans and credit cards (Lee et al. 2020) To perform tasks, Automated decision-making
systems rely on a plurality of statistical techniques, from decision trees to deep neural
networks, to draw inferences from the growing availability of fine-grained data. It can bring
both economic and social benefits, can reduce costs, increase consistency and create new
innovative solutions

On the other hand, the use of Automated decision-making systems is coupled with ethical
challenges.They can also enable human wrongdoing or remove human responsibility (Yang
et al. 2018; Tsamados et al. 2020). Therefore, we need to use it for the right purpose and
ethically. Below are four main groups related to the Automated Decision Making System
system.

2.2.1 Decision support system

2.2.1.1 Decision support system (DSS)

Decision Support System is a computerized system designed to assist decision-makers in the

process of making informed judgments. It equips decision-makers with the necessary tools
and knowledge to analyze data, model various situations, and develop potential scenarios. The
features of a DSS encompass the ability to collect data from diverse sources, employ various
data analysis techniques, construct prediction or categorization models, and ultimately provide
valuable advice based on the data and analytics.

In practical terms, DSS finds wide-ranging applicability across different sectors. In the
business realm, it proves instrumental in finance, manufacturing, marketing, and sales by
offering insights that contribute to strategic decision-making. In the medical field, DSS plays
a crucial role in terms of diagnosis, treatment planning, and overall healthcare management.
Security concerns are addressed through DSS as it facilitates the monitoring and protection of
critical systems and infrastructure. Governments leverage DSS for financial management,
optimizing public services, and enhancing national security measures.
2.2.1.2 Warehouse management system (WMS)

Warehouse management system stands as a pivotal software solution, streamlining and

automating the diverse facets of warehouse administration. From the initial stages of receiving
and storing goods to the intricacies of picking, packaging, shipping, and comprehensive
inventory tracking, WMS encompasses the entire spectrum of warehouse operations.

Key features of a WMS include robust inventory management capabilities, enabling precise
control and visibility over stock levels. It efficiently manages order picking and putaway
processes, ensuring accurate and timely fulfillment of customer orders. Returns management
is another crucial aspect, allowing for seamless handling and processing of returned items.
Additionally, WMS extends its functionalities to yard management and receiving, enhancing
overall operational efficiency.

The applicability of WMS spans across various industries, with notable benefits observed in
the following sectors:

E-commerce: In the dynamic landscape of online retail, where swift and effective warehouse
management is paramount, WMS proves invaluable. It optimizes operations and efficiently
manages product storage, meeting the escalating demand for faster order processing and
delivery in the e-commerce sector.

Third-Party Logistics (3PL) Providers: WMS serves as a cornerstone for 3PL providers,
offering a robust platform to monitor and oversee daily warehouse operations. This ensures
that 3PL providers can deliver efficient services without compromising on quality, meeting
the diverse needs of their clients.

Distribution Organizations: Companies engaged in distribution activities experience enhanced

operational efficiency and adept handling of increased volumes through the implementation
of a WMS. The system contributes to streamlined processes, minimizing errors, and
improving overall warehouse productivity.

2.2.1.3 Project management system (PMS)

Project management system stands as a crucial resource system designed to facilitate planning,
organization, management, and resource estimation within diverse project environments. Its
multifaceted features contribute to the seamless execution of projects by providing
comprehensive tools for task creation and assignment, project scheduling, deadline tracking,
cost estimation, and cost control.

Task Creation and Assignment: PMS enables the creation and assignment of tasks, allowing
project managers to allocate responsibilities efficiently. This feature enhances collaboration
and ensures that team members are clear about their roles and responsibilities.

Project Scheduling and Deadline Tracking: The system offers robust project scheduling
capabilities, enabling project managers to create and manage timelines effectively. Deadline
tracking ensures that project milestones and goals are met in a timely manner, contributing to
overall project success.

Cost Estimation and Cost Control: PMS incorporates features for accurate cost estimation and
effective cost control. This ensures that projects stay within budget constraints, providing
transparency and accountability in financial aspects. The applicabilities of PMS are diverse,
with notable benefits observed in specific industries:

Software Development: PMS is particularly well-suited for software development initiatives.

It aligns with contemporary Software Engineering principles and incorporates features
inspired by Agile and Scrum methodologies. This adaptability makes PMS an ideal choice for
managing the complexities of software creation, ensuring efficient collaboration among
development teams.
Business Management: In broader business management, PMS plays a pivotal role in
enhancing executives' awareness of how technology influences work dynamics. It provides
insights into how a project management system impacts project completion, team efficiency,
and overall business processes. By utilizing PMS, firms can achieve greater transparency,
efficiency, and control in their project-related endeavors.

2.2.2 Expert systems and machine learning

2.2.2.1 Expert System (ES)

Expert System is a computer program designed to emulate human decision-making skills,

particularly in addressing unstructured and challenging situations. Its features include the
utilization of specialists' expertise and experience, the capability to address unstructured and
complicated challenges, and versatility with the ability to acquire knowledge.

In terms of applicability, ES finds significant use in medical diagnosis, where it leverages the
expertise of medical professionals to analyze symptoms and provide accurate diagnoses.
Additionally, ES is employed in techniques for financial assistance, offering intelligent
decision support by analyzing complex financial data and providing recommendations based
on financial specialists' knowledge. In legal domains, ES assists in navigating the complexities
of laws, providing valuable insights and decision-making support for legal professionals.

2.2.2.2 Machine Learning (ML)

Machine Learning operates as a subfield of artificial intelligence (AI) with a primary focus on
developing models capable of autonomous learning from data. Its utilization extends to the
creation of prediction and classification models, distinguished by features that involve the use
of machine learning algorithms for automatic data learning, the capability to forecast future
outcomes, and the adeptness in categorizing items or occurrences. In practical scenarios, ML
manifests its applicability through various domains:
Facial Recognition: ML, employing the training of artificial neural networks, analyzes and
interprets facial information extracted from videos or images. This process allows the system
to learn distinctive patterns and traits unique to each individual, making facial recognition an
integral technology in security and identification systems.

E-commerce: ML significantly contributes to the e-commerce landscape by optimizing social

media platforms and offering personalized product suggestions. Leveraging users' browsing
history, prior purchases, and shopping cart activity, ML enhances the overall user experience,
facilitating targeted and tailored recommendations.

Healthcare Advancement: ML plays a pivotal role in healthcare by collecting and analyzing

extensive patient data. Algorithms, designed to discern patterns from these datasets, empower
medical professionals to identify new diseases and predict treatment outcomes. The utilization
of ML-based systems and tools for data classification and categorization revolutionizes
diagnostic and treatment methodologies in healthcare.

2.2.2.3 Image Classification System (ICS)

An Image Classification System harnesses the power of machine learning models and neural
networks to autonomously categorize images. This system proves versatile, finding
application not only in image classification but also in facial recognition, object detection, and
various other domains. The utilization of advanced algorithms enables the system to discern
patterns and features within images, providing a valuable tool for tasks ranging from
identifying objects in photos to recognizing faces in security applications. The continuous
advancement of image classification systems contributes to the enhancement of computer
vision capabilities, promising innovative solutions in diverse fields.
2.2.3 Supply chain management systems

2.2.3.1 Supply chain management system (SCM)

Supply chain management system involves the oversight and coordination of the flow of
commodities, data, and financial transactions associated with a product or service, spanning
from the procurement of raw materials to the eventual delivery of the final product.

The key features of an SCM system encompass the processing of customer requirements,
forecasting demand to optimize inventory levels, and managing relationships with suppliers
through Supplier Relationship Management (SRM). In terms of applicability, SCM systems
prove beneficial in various sectors:

E-commerce: These systems play a crucial role in optimizing processes and efficiently
managing product storage for e-commerce enterprises. By streamlining supply chain
operations, SCM contributes to faster order fulfillment and improved customer satisfaction.

Distribution: SCM systems are instrumental for distribution companies, aiding in the
enhancement of operational efficiency and effective handling of increased volumes. They
facilitate seamless coordination of logistics, reducing bottlenecks and improving overall
distribution processes.

Manufacturing: SCM systems are tailored to meet the specific demands of manufacturing
organizations. Efficiently managing the storage of raw materials, finished goods, and other
inventories, these systems contribute to streamlined production processes, reducing lead times
and ensuring timely delivery of goods.

2.2.3.2 Flimp and seekout

Flimp stands out as a premier HR system specifically designed for benefits administration and
employee communication. It boasts built-in communication solutions, decision-making tools,
and text messaging features, offering a comprehensive suite of functionalities. Key features
include assistance in employee benefit decision-making, remote communication solutions
with impressive engagement rates exceeding 70%, access to employee training materials and
a video collection, and a toolkit for automated onboarding.

This versatile system finds its applicability primarily in Human Resources, catering to
employers, HR consultants, insurance carriers, and healthcare providers. Flimp excels in
various aspects, including reducing the number of queries and meetings by educating staff on
intricate issues such as HMOs, PPOs, HSAs, IRAs, 401ks, HDHPs, and more. It also enhances
onboarding and retention by utilizing films, digital content, and centralized information.
Additionally, it delivers decision-support technologies, empowering workers to make
informed plan decisions.

SeekOut on the other hand, represents a cutting-edge AI-powered system tailored for hiring
highly skilled individuals. Its features include facilitating managers in diversifying talent
streams, reducing biased hiring, increasing applicant engagement, and seamless integration
with Applicant Tracking Systems (ATS). Furthermore, SeekOut offers talent analytics and
reporting capabilities.

SeekOut's primary applicability lies in the field of recruitment, where it streamlines the hiring
process by enabling recruiters to perform Boolean searches within specific fields. This
functionality allows recruiters to efficiently sift through a large pool of profiles, identifying
the top applicants for vacant positions. SeekOut's emphasis on leveraging AI for recruitment
underscores its commitment to providing efficient and effective talent acquisition solutions.

2.2.3.3 Cloud-based decision-making systems

Cloud-based decision-making systems utilize cloud computing technology to store and

execute decision-making applications. These systems find application across diverse
industries, offering features such as flexibility, affordability, and enhanced security.
In terms of flexibility, these systems can be accessed from any device with an internet
connection, streamlining decision-making processes for businesses and organizations. The
affordability of cloud-based decision-making systems is evident in their ability to save money
on infrastructure, operational, and maintenance costs. Additionally, the security aspect is
robust, as these systems are hosted on highly secure cloud servers, ensuring the protection of
sensitive data.

The applicability of these systems spans various sectors:

Business: In business, these systems aid decision-making in areas like marketing, sales,
manufacturing, and finance. For instance, they can analyze customer data to identify potential
customers, optimize marketing strategies, or predict product demand.

Healthcare: In healthcare, these systems support decisions related to diagnosis, treatment, and
patient management. They can analyze medical data to diagnose diseases, recommend
treatments, or predict the likelihood of patient outcomes.

Education: Within education, these systems contribute to decisions in teaching, assessment,

and student management. They can personalize curricula, recommend learning activities, and
predict student outcomes.

Other Industries: Cloud-based decision-making systems extend their utility to various

industries, including customer service, security, and more. They can analyze call data to
enhance customer service, detect security threats, or predict the timing of disasters.

2.2.4 Specialized decision-making systems and other applications

2.2.4.1 POS System

Point of sale system serves as the core hub of a firm, seamlessly connecting various crucial
aspects like sales, inventory management, payment processing, and client management. Its
versatile features include sales reporting and analytics, automatic discounts, customer
management, compliance, and security measures. In terms of applicability, POS systems find
widespread use in various industries:

Retail Businesses: Ranging from small local stores to major national chains, POS systems play
a pivotal role in the retail sector. They contribute to the efficient management of sales,
inventory, and customer relationships, making them an indispensable component of the retail
business.

Restaurants & Hospitality: In the hospitality industry, POS systems can handle orders, process
payments, and even manage bookings. Additionally, they prove beneficial in tracking
inventories, preventing waste, and ensuring the availability of ingredients.

Service Sectors: POS systems are valuable in service-oriented sectors like salons and spas.
They can efficiently manage appointments, facilitate payment collection, and handle customer
relationship management, streamlining operations in these service-focused businesses.

2.2.4.2 Self-driving car system

Self-driving car system employs camera sensor systems and artificial intelligence algorithms
to make real-time decisions regarding direction, speed, and responses to the surrounding
environment. This sophisticated technology allows the system to analyze data instantaneously,
ensuring optimal decision-making for traffic safety.

Examples of self-driving car systems include the Autopilot system in Tesla vehicles and
VinFast cars. These systems showcase the cutting-edge integration of sensors and AI, enabling
vehicles to navigate autonomously while prioritizing safety on the road.
2.2.4.3 Proposal and Recommendation System

Proposal and recommendation system leverages advanced algorithms and artificial

intelligence to gather user data, including demographics, preferences, and behavior. This data
is then used to provide personalized suggestions and options tailored to individual users. This
system enhances user experience and engagement by presenting content or products that align
with the user's interests and habits.

For instance, in the context of an e-commerce platform, the recommendation system utilizes
algorithms to analyze a user's past purchases, search history, and interactions on the platform.
As a result, when a user searches for a product, the system can suggest similar products or
complementary items, enhancing the user's shopping experience.
CHAPTER 3. ANALYSIS OF DIGITAL TRANSFORMATION TOOLS (BIG
DATA, AI, IOT, ELASTIC CLOUD...)
3.1 Big Data

3.1.1 Definition of Big Data

Big data refers to extremely large and diverse collections of structured, unstructured, and semi-
structured data that continues to grow exponentially over time. These datasets are so huge and
complex in volume, velocity, and variety, that traditional data management systems cannot
store, process, and analyze them.
The amount and availability of data is growing rapidly, spurred on by digital technology
advancements, such as connectivity, mobility, the Internet of Things (IoT), and artificial
intelligence (AI). As data continues to expand and proliferate, new big data tools are emerging
to help companies collect, process, and analyze data at the speed needed to gain the most value
from it.
Big data describes large and diverse datasets that are huge in volume and also rapidly grow in
size over time. Big data is used in machine learning, predictive modeling, and other advanced
analytics to solve business problems and make informed decisions.

3.1.2 Example of Big Data

Data can be a company’s most valuable asset. Using big data to reveal insights can help you
understand the areas that affect your business—from market conditions and customer
purchasing behaviors to your business processes. Here are some big data examples that are
helping transform organizations across every industry:
Tracking consumer behavior and shopping habits to deliver hyper-personalized retail product
recommendations tailored to individual customers
Monitoring payment patterns and analyzing them against historical customer activity to detect
fraud in real time
Combining data and information from every stage of an order’s shipment journey with
hyperlocal traffic insights to help fleet operators optimize last-mile delivery
Using AI-powered technologies like natural language processing to analyze unstructured
medical data (such as research reports, clinical notes, and lab results) to gain new insights for
improved treatment development and enhanced patient care
Using image data from cameras and sensors, as well as GPS data, to detect potholes and
improve road maintenance in cities
Analyzing public datasets of satellite imagery and geospatial datasets to visualize, monitor,
measure, and predict the social and environmental impacts of supply chain operations

3.1.3 The Vs of Big Data

Big data definitions may vary slightly, but it will always be described in terms of volume,
velocity, and variety. These big data characteristics are often referred to as the “3 Vs of big
data” and were first defined by Gartner in 2001.
Volume: As its name suggests, the most common characteristic associated with big data is its
high volume. This describes the enormous amount of data that is available for collection and
produced from a variety of sources and devices on a continuous basis.
Velocity: Big data velocity refers to the speed at which data is generated. Today, data is often
produced in real time or near real time, and therefore, it must also be processed, accessed, and
analyzed at the same rate to have any meaningful impact.

Variety: Data is heterogeneous, meaning it can come from many different sources and can be
structured, unstructured, or semi-structured. More traditional structured data (such as data in
spreadsheets or relational databases) is now supplemented by unstructured text, images, audio,
video files, or semi-structured formats like sensor data that can’t be organized in a fixed data
schema.
Veracity: Big data can be messy, noisy, and error-prone, which makes it difficult to control
the quality and accuracy of the data. Large datasets can be unwieldy and confusing, while
smaller datasets could present an incomplete picture. The higher the veracity of the data, the
more trustworthy it is.
Variability: The meaning of collected data is constantly changing, which can lead to
inconsistency over time. These shifts include not only changes in context and interpretation
but also data collection methods based on the information that companies want to capture and
analyze.
Value: It’s essential to determine the business value of the data you collect. Big data must
contain the right data and then be effectively analyzed in order to yield insights that can help
drive decision-making.

3.1.4 How does Big Data work?

The central concept of big data is that the more visibility you have into anything, the more
effectively you can gain insights to make better decisions, uncover growth opportunities, and
improve your business model. Making big data work requires three main actions:
Integration: Big data collects terabytes, and sometimes even petabytes, of raw data from many
sources that must be received, processed, and transformed into the format that business users
and analysts need to start analyzing it.
Management: Big data needs big storage, whether in the cloud, on-premises, or both. Data
must also be stored in whatever form required. It also needs to be processed and made
available in real time. Increasingly, companies are turning to cloud solutions to take advantage
of the unlimited compute and scalability.
Analysis: The final step is analyzing and acting on big data—otherwise, the investment won’t
be worth it. Beyond exploring the data itself, it’s also critical to communicate and share
insights across the business in a way that everyone can understand. This includes using tools
to create data visualizations like charts, graphs, and dashboards.

3.1.5 Benefits of Big Data

Improved decision-making: Big data is the key element to becoming a data-driven

organization. When you can manage and analyze your big data, you can discover patterns and
unlock insights that improve and drive better operational and strategic decisions.
Increased agility and innovation: Big data allows you to collect and process real-time data
points and analyze them to adapt quickly and gain a competitive advantage. These insights
can guide and accelerate the planning, production, and launch of new products, features, and
updates.
Better customer experiences: Combining and analyzing structured data sources together with
unstructured ones provides you with more useful insights for consumer understanding,
personalization, and ways to optimize experience to better meet consumer needs and
expectations.
Continuous intelligence: Big data allows you to integrate automated, real-time data streaming
with advanced data analytics to continuously collect data, find new insights, and discover new
opportunities for growth and value.
More efficient operations: Using big data analytics tools and capabilities allows you to process
data faster and generate insights that can help you determine areas where you can reduce costs,
save time, and increase your overall efficiency.
Improved risk management: Analyzing vast amounts of data helps companies evaluate risk
better—making it easier to identify and monitor all potential threats and report insights that
lead to more robust control and mitigation strategies.
3.1.6 Challenges of implementing Big Data Analytics

While big data has many advantages, it does present some challenges that organizations must
be ready to tackle when collecting, managing, and taking action on such an enormous amount
of data. The most commonly reported big data challenges include:
Lack of data talent and skills: Data scientists, data analysts, and data engineers are in short
supply—and are some of the most highly sought after (and highly paid) professionals in the
IT industry. Lack of big data skills and experience with advanced data tools is one of the
primary barriers to realizing value from big data environments.
Speed of data growth: Big data, by nature, is always rapidly changing and increasing. Without
a solid infrastructure in place that can handle your processing, storage, network, and security
needs, it can become extremely difficult to manage.
Problems with data quality: Data quality directly impacts the quality of decision-making, data
analytics, and planning strategies. Raw data is messy and can be difficult to curate. Having
big data doesn’t guarantee results unless the data is accurate, relevant, and properly organized
for analysis. This can slow down reporting, but if not addressed, you can end up with
misleading results and worthless insights.
Compliance violations: Big data contains a lot of sensitive data and information, making it a
tricky task to continuously ensure data processing and storage meet data privacy and
regulatory requirements, such as data localization and data residency laws.
Integration complexity: Most companies work with data siloed across various systems and
applications across the organization. Integrating disparate data sources and making data
accessible for business users is complex, but vital, if you hope to realize any value from your
big data.
Security concerns: Big data contains valuable business and customer information, making big
data stores high-value targets for attackers. Since these datasets are varied and complex, it can
be harder to implement comprehensive strategies and policies to protect them.
3.2 Internet of Things (IoT)

3.2.1 Definition of IoT

The Internet of Things (IoT) refers to a network of physical devices, vehicles, appliances and
other physical objects that are embedded with sensors, software and network connectivity that
allows them to collect and share data. These devices — also known as “smart objects” — can
range from simple “smart home” devices like smart thermostats, to wearables like
smartwatches and RFID-enabled clothing, to complex industrial machinery and transportation
systems. Technologists are even envisioning entire “smart cities” predicated on IoT
technologies.
IoT enables these smart devices to communicate with each other and with other internet-
enabled devices, like smartphones and gateways, creating a vast network of interconnected
devices that can exchange data and perform a variety of tasks autonomously. This can include
everything from monitoring environmental conditions in farms, to managing traffic patterns
with smart cars and other smart automotive devices, to controlling machines and processes in
factories, to tracking inventory and shipments in warehouses.
The potential applications of IoT are vast and varied, and its impact is already being felt across
a wide range of industries, including manufacturing, transportation, healthcare and agriculture.
As the number of internet-connected devices continues to grow, IoT is likely to play an
increasingly important role in shaping our world and transforming the way we live, work and
interact with each other.
In an enterprise context, IoT devices are used to monitor a wide range of parameters such as
temperature, humidity, air quality, energy consumption and machine performance. This data
can be analyzed in real time to identify patterns, trends and anomalies that can help businesses
optimize their operations and improve their bottom line.
3.2.2 Example of IoT applications

Healthcare: In the healthcare industry, IoT devices can be used to monitor patients remotely
and collect real-time data on their vital signs, such as heart rate, blood pressure and oxygen
saturation. This sensor data can be analyzed to detect patterns and identify potential health
issues before they become more serious. IoT devices can also be used to track medical
equipment, manage inventory and monitor medication compliance.
Manufacturing: Industrial IoT devices can be used in manufacturing to monitor machine
performance, detect equipment failures and optimize production processes. For example,
sensors can be used to monitor the temperature and humidity in an manufacturing facility,
ensuring that conditions are optimal for the production of sensitive products. IoT devices can
also be used to track inventory, manage supply chains and monitor the quality of finished
products. Industrial IoT is such an expansive new technology space, that it is sometimes
referred to by its own abbreviation: IIoT (Industrial IoT).
Retail: In the retail industry, IoT devices can be used to track customer behavior, monitor
inventory levels and optimize store layouts. For example, sensors can be used to track foot
traffic in a store and analyze customer behavior, allowing retailers to optimize product
placement and improve the customer experience. IoT devices can also be used to monitor
supply chains, track shipments and manage inventory levels.
Agriculture: IoT devices can be used in agriculture to monitor soil conditions, weather patterns
and crop growth. For example, sensors can be used to measure the moisture content of soil,
ensuring that crops are irrigated at the optimal time. IoT devices can also be used to monitor
livestock health, track equipment and manage supply chains. Low-power or solar-powered
devices can often be used with minimal oversight in remote locations.
Transportation: In the transportation industry, IoT devices can be used to monitor vehicle
performance, optimize routes and track shipments. For example, sensors can be used to
monitor the fuel efficiency of connected cars, reducing fuel costs and improving sustainability.
IoT devices can also be used to monitor the condition of cargo, ensuring that it arrives at its
destination in optimal condition.

3.2.3 Benefits of IoT

IoT is important for business for several reasons. Here are the core benefits of IoT:
Improved efficiency: By using IoT devices to automate and optimize processes, businesses
can improve efficiency and productivity. For example, IoT sensors can be used to monitor
equipment performance and detect or even resolve potential issues before they cause
downtime, reducing maintenance costs and improving uptime.
Data-driven decision-making: IoT devices generate vast amounts of data that can be used to
make better-informed business decisions and new business models. By analyzing this data,
businesses can gain insights into customer behavior, market trends and operational
performance, allowing them to make more informed decisions about strategy, product
development and resource allocation.
Cost-savings: By reducing manual processes and automating repetitive tasks, IoT can help
businesses reduce costs and improve profitability. For example, IoT devices can be used to
monitor energy usage and optimize consumption, reducing energy costs and improving
sustainability.
Enhanced customer experience: By using IoT technology to gather data about customer
behavior, businesses can create more personalized and engaging experiences for their
customers. For example, retailers can use IoT sensors to track customer movements in stores
and deliver personalized offers based on their behavior.

3.2.4 Risks and Challenges in IoT

IoT offers many benefits, but it also poses several risks and challenges. Here are some of the
most significant ones:
Security and privacy risks: As IoT devices become more widespread, security and privacy
become increasingly important. Many IoT devices are vulnerable to hackers and other cyber
threats, which can compromise the security and privacy of sensitive data. IoT devices can also
collect vast amounts of personal data, raising concerns about privacy and data protection.
Interoperability issues: IoT devices from different manufacturers often use different standards
and protocols, making it difficult for them to perform what’s called “machine to machine”
communication. This can lead to interoperability issues and create silos of data that are
difficult to integrate and analyze.
Data overload: IoT devices generate vast amounts of data, which can overwhelm businesses
that are not prepared to handle it. Analyzing this data and extracting meaningful insights can
be a significant challenge, especially for businesses that lack the necessary analytics tools and
expertise.

Cost and complexity: Implementing an IoT system can be costly and complex, requiring
significant investments in hardware, software and infrastructure. Managing and maintaining
an IoT system can also be challenging, requiring specialized skills and expertise.
Regulatory and legal challenges: As IoT devices become more widespread, regulatory and
legal challenges are emerging. Businesses need to comply with various data protection,
privacy and cybersecurity regulations, which can vary from country to country.

3.2.5 The technologies that make IoT possible

Sensors and actuators: Sensors are devices that can detect changes in the environment, such
as temperature, humidity, light, motion or pressure. Actuators are devices that can cause
physical changes in the environment, such as opening or closing a valve or turning on a motor.
These devices are at the heart of IoT, as they allow machines and devices to interact with the
physical world. Automation is possible when sensors and actuators work to resolve issues
without human intervention.
Connectivity technologies: To transmit IoT data from sensors and actuators to the cloud, IoT
devices need to be connected to the internet. There are several connectivity technologies used
in IoT, including Wi-Fi, Bluetooth, cellular, Zigbee and LoRaWAN.
Cloud computing: The cloud is where the vast amounts of data generated by IoT devices are
stored, processed and analyzed. Cloud computing platforms provide the infrastructure and
tools needed to store and analyze this data, as well as to build and deploy IoT applications.
Big data analytics: To make sense of the vast amounts of data generated by IoT devices,
businesses need to use advanced analytics tools to extract insights and identify patterns. These
tools can include machine learning algorithms, data visualization tools and predictive analytics
models.
Security and privacy technologies: As IoT deployments become more widespread, IoT
security and privacy become increasingly important. Technologies such as encryption, access
controls and intrusion detection systems are used to protect IoT devices and the data they
generate from cyber threats.

3.3 Artificial Intelligence

3.3.1 Definition of AI

While a number of definitions of artificial intelligence (AI) have surfaced over the last few
decades, John McCarthy offers the following definition in this 2004 paper , " It is the science
and engineering of making intelligent machines, especially intelligent computer programs. It
is related to the similar task of using computers to understand human intelligence, but AI does
not have to confine itself to methods that are biologically observable."
However, decades before this definition, the birth of the artificial intelligence conversation
was denoted by Alan Turing's seminal work, "Computing Machinery and Intelligence", which
was published in 1950. In this paper, Turing, often referred to as the "father of computer
science", asks the following question, "Can machines think?" From there, he offers a test,
now famously known as the "Turing Test", where a human interrogator would try to
distinguish between a computer and human text response. While this test has undergone much
scrutiny since its publish, it remains an important part of the history of AI as well as an ongoing
concept within philosophy as it utilizes ideas around linguistics.
Stuart Russell and Peter Norvig then proceeded to publish, Artificial Intelligence: A Modern
Approach , becoming one of the leading textbooks in the study of AI. In it, they delve into
four potential goals or definitions of AI, which differentiates computer systems on the basis
of rationality and thinking vs. acting:
Human approach: Systems that think like humans, systems that act like humans
Ideal approach: Systems that think rationally, systems that act rationally
Alan Turing’s definition would have fallen under the category of “systems that act like
humans.”
At its simplest form, artificial intelligence is a field, which combines computer science and
robust datasets, to enable problem-solving. It also encompasses sub-fields of machine learning
and deep learning, which are frequently mentioned in conjunction with artificial intelligence.
These disciplines are comprised of AI algorithms which seek to create expert systems which
make predictions or classifications based on input data.
Over the years, artificial intelligence has gone through many cycles of hype, but even to
skeptics, the release of OpenAI’s ChatGPT seems to mark a turning point. The last time
generative AI loomed this large, the breakthroughs were in computer vision, but now the leap
forward is in natural language processing. And it’s not just language: Generative models can
also learn the grammar of software code, molecules, natural images, and a variety of other
data types.
The applications for this technology are growing every day, and we’re just starting to explore
the possibilities. But as the hype around the use of AI in business takes off, conversations
around ethics become critically important. To read more on where IBM stands within the
conversation around AI ethics, read more here.

3.3.2 Types of artificial intelligence—weak AI vs. strong AI

Weak AI—also called Narrow AI or Artificial Narrow Intelligence (ANI)—is AI trained and
focused to perform specific tasks. Weak AI drives most of the AI that surrounds us today.
‘Narrow’ might be a more accurate descriptor for this type of AI as it is anything but weak; it
enables some very robust applications, such as Apple's Siri, Amazon's Alexa, IBM watson,
and autonomous vehicles.
Strong AI is made up of Artificial General Intelligence (AGI) and Artificial Super Intelligence
(ASI). Artificial general intelligence (AGI), or general AI, is a theoretical form of AI where a
machine would have an intelligence equaled to humans; it would have a self-aware
consciousness that has the ability to solve problems, learn, and plan for the future. Artificial
Super Intelligence (ASI)—also known as superintelligence—would surpass the intelligence
and ability of the human brain. While strong AI is still entirely theoretical with no practical
examples in use today, that doesn't mean AI researchers aren't also exploring its development.
In the meantime, the best examples of ASI might be from science fiction, such as HAL, the
superhuman, rogue computer assistant in 2001: A Space Odyssey.

3.3.3 Deep learning vs. Machine learning

Since deep learning and machine learning tend to be used interchangeably, it’s worth noting
the nuances between the two. As mentioned above, both deep learning and machine learning
are subfields of artificial intelligence, and deep learning is actually a sub-field of machine
learning.
Deep learning is actually comprised of neural networks. “Deep” in deep learning refers to a
neural network comprised of more than three layers—which would be inclusive of the inputs
and the output—can be considered a deep learning algorithm. This is generally represented
using the diagram below.
The way in which deep learning and machine learning differ is in how each algorithm learns.
Deep learning automates much of the feature extraction piece of the process, eliminating some
of the manual human intervention required and enabling the use of larger data sets. You can
think of deep learning as "scalable machine learning" as Lex Fridman noted in same MIT
lecture from above. Classical, or "non-deep", machine learning is more dependent on human
intervention to learn. Human experts determine the hierarchy of features to understand the
differences between data inputs, usually requiring more structured data to learn.
"Deep" machine learning can leverage labeled datasets, also known as supervised learning, to
inform its algorithm, but it doesn’t necessarily require a labeled dataset. It can ingest
unstructured data in its raw form (e.g. text, images), and it can automatically determine the
hierarchy of features which distinguish different categories of data from one another. Unlike
machine learning, it doesn't require human intervention to process data, allowing us to scale
machine learning in more interesting ways.

3.3.4 Artificial Intelligence applications

There are numerous, real-world applications of AI systems today. Below are some of the most
common use cases:
Speech recognition: It is also known as automatic speech recognition (ASR), computer speech
recognition, or speech-to-text, and it is a capability which uses natural language processing
(NLP) to process human speech into a written format. Many mobile devices incorporate
speech recognition into their systems to conduct voice search—e.g. Siri—or provide more
accessibility around texting.
Customer service: Online virtual agents are replacing human agents along the customer
journey. They answer frequently asked questions (FAQs) around topics, like shipping, or
provide personalized advice, cross-selling products or suggesting sizes for users, changing the
way we think about customer engagement across websites and social media platforms.
Examples include messaging bots on e-commerce sites with virtual agents, messaging apps,
such as Slack and Facebook Messenger, and tasks usually done by virtual assistants and voice
assistants.
Computer vision: This AI technology enables computers and systems to derive meaningful
information from digital images, videos and other visual inputs, and based on those inputs, it
can take action. This ability to provide recommendations distinguishes it from image
recognition tasks. Powered by convolutional neural networks, computer vision has
applications within photo tagging in social media, radiology imaging in healthcare, and self-
driving cars within the automotive industry.
Recommendation engines: Using past consumption behavior data, AI algorithms can help to
discover data trends that can be used to develop more effective cross-selling strategies. This
is used to make relevant add-on recommendations to customers during the checkout process
for online retailers.
Automated stock trading: Designed to optimize stock portfolios, AI-driven high-frequency
trading platforms make thousands or even millions of trades per day without human
intervention.
3.3.5 AI benefits and dangers

AI has a range of applications with the potential to transform how we work and our daily lives.
While many of these transformations are exciting, like self-driving cars, virtual assistants, or
wearable devices in the healthcare industry, they also pose many challenges.
It’s a complicated picture that often summons competing images: a utopia for some, a dystopia
for others. The reality is likely to be much more complex. Here are a few of the possible
benefits and dangers AI may pose:
Potential Benefits
The integration of advanced technologies and artificial intelligence (AI) into various industries
has ushered in a myriad of potential benefits. One notable advantage lies in the realm of
manufacturing, where the precision and reliability of AI systems contribute to greater accuracy
in repetitive tasks like assembling vehicles or computers. This not only ensures consistency
but also enhances the overall quality of the end product.
Furthermore, the deployment of AI can lead to a significant reduction in operational costs as
machines demonstrate increased efficiency in carrying out tasks. With streamlined processes
and minimized errors, businesses can optimize resource utilization and enhance their bottom
line.
In the realm of digital services and products, AI facilitates a new era of personalization.
Tailoring experiences to individual preferences and behaviors becomes more refined, offering
users a more customized and engaging interaction. This level of personalization not only
improves user satisfaction but also fosters stronger brand loyalty.
Another noteworthy advantage of AI is its potential to revolutionize decision-making in
certain situations. By processing vast amounts of data at unprecedented speeds, AI systems
can analyze complex scenarios and provide valuable insights. This capability aids in making
informed decisions, particularly in areas where human cognition may be limited by the sheer
volume or complexity of information.
Moreover, AI's ability to generate content rapidly is a game-changer. Whether it be text,
images, or other forms of media, AI algorithms can swiftly create new and diverse content.
This not only saves time but also opens up possibilities for innovation and creativity across
various industries.

In summary, the incorporation of AI into different sectors holds the promise of greater
accuracy, cost-efficiency, personalization, improved decision-making, and rapid content
generation. As technology continues to advance, these benefits are likely to expand, driving
innovation and transforming the way we live and work

Potential Dangers
While the integration of artificial intelligence (AI) into various aspects of society offers
numerous advantages, it also raises concerns and potential dangers that must be addressed.
One significant apprehension is the potential for widespread job loss resulting from increased
automation. As AI systems take over repetitive tasks traditionally performed by humans, there
is a looming threat to employment opportunities in certain industries, necessitating a proactive
approach to reskilling and workforce adaptation.
Another critical issue is the inherent risk of bias and discrimination in AI applications. The
algorithms driving AI systems learn from vast datasets, and if these datasets contain biased or
discriminatory information, the AI may perpetuate and amplify these biases. This poses a
considerable ethical challenge, demanding ongoing efforts to ensure fairness and equity in AI
development and deployment.
Cybersecurity concerns also emerge as a significant danger associated with widespread AI
adoption. As AI systems become more integral to critical infrastructure and sensitive data
handling, the potential for malicious attacks and unauthorized access increases. Safeguarding
against cyber threats becomes paramount to prevent breaches that could have far-reaching
consequences.
The lack of transparency in AI decision-making processes is another potential danger. When
AI algorithms generate outcomes without clear explanations, it becomes challenging to
understand, interpret, and trust the decisions they make. This opacity may lead to suboptimal
solutions and hinder accountability, necessitating the development of transparent and
explainable AI systems.
Furthermore, the rapid generation of content by AI raises concerns about the potential for
misinformation and inadvertent violations of laws and regulations. Ensuring that AI-generated
content adheres to ethical standards and legal frameworks becomes crucial to prevent
unintended consequences.
In conclusion, while AI presents numerous benefits, it is essential to address and mitigate the
potential dangers it poses. This requires a concerted effort from researchers, developers,
policymakers, and society as a whole to ensure responsible AI development, deployment, and
ongoing monitoring. By navigating these challenges carefully, we can harness the
transformative power of AI while safeguarding against its potential pitfalls.

3.4 Elastic Cloud

3.4.1 Definition of Elastic Cloud

Elastic Cloud is a cloud service provided by Elastic that offers managed Elasticsearch and
Kibana solutions. Elasticsearch is a distributed search and analytics engine, and Kibana is a
data visualization tool. Elastic Cloud simplifies the deployment, management, and scaling of
these technologies in a cloud environment.

3.4.2 Features of Elastic Cloud

Elastic Cloud, a powerful cloud-based service, boasts a range of features that make it a
compelling choice for organizations seeking efficient and scalable solutions for managing
Elasticsearch and Kibana. One standout characteristic is its status as a fully managed service,
alleviating users from the complexities of operational tasks such as deployment, scaling, and
maintenance. This allows organizations to focus on utilizing Elasticsearch and Kibana without
the burden of managing underlying infrastructure.
The scalability of Elastic Cloud is a key advantage, enabling users to effortlessly adjust the
size of their clusters based on evolving requirements. This scalability is achieved without the
need for extensive manual intervention, providing flexibility and responsiveness to changing
workloads.
Security is paramount in Elastic Cloud, which incorporates built-in features to safeguard data.
Encryption, role-based access control, and auditing mechanisms are integral components,
ensuring a robust defense against unauthorized access and protecting sensitive information.
To enhance operational efficiency, Elastic Cloud offers comprehensive monitoring tools.
These tools enable users to track the health and performance of their Elasticsearch cluster,
with the added benefit of alerting capabilities that notify users of potential issues in real-time.
The multi-cloud support of Elastic Cloud is a notable feature, making it compatible with major
cloud platforms such as AWS, Azure, and GCP. This flexibility allows organizations to choose
the cloud provider that aligns best with their specific needs and existing infrastructure.
Seamless integration is another highlight, as Elastic Cloud works harmoniously with various
data sources, tools, and platforms. This interoperability facilitates a smooth and cohesive
experience for users, enabling them to leverage their existing ecosystem of tools.
Elastic Cloud also brings potential cost savings compared to self-managed Elasticsearch
deployments. By outsourcing operational tasks and leveraging cloud-native features like auto-
scaling and data tiers, organizations can optimize resource utilization and reduce overall costs.
In summary, Elastic Cloud stands out as a comprehensive solution, combining managed
services, scalability, security, monitoring, multi-cloud support, integrations, cost savings, and
cloud-native features. Its diverse capabilities make it a valuable asset for organizations looking
to harness the power of Elasticsearch and Kibana in a streamlined and efficient manner.

3.4.3 Applications of Elastic Cloud

Elastic Cloud finds diverse applications across industries, leveraging its capabilities to address
specific needs in various domains.
One prominent application is in the realm of Search and Analytics. Elasticsearch, a core
component of Elastic Cloud, is renowned for its real-time search and analytics capabilities.
This makes Elastic Cloud suitable for applications where fast and efficient data retrieval is
critical, providing users with the ability to sift through large datasets swiftly and retrieve
relevant information in real-time.
For organizations dealing with extensive log and event data, Elastic Cloud proves invaluable
in Log and Event Data Analysis. The platform excels in analyzing large volumes of log and
event data, offering insights into system behavior, troubleshooting issues, and detecting
anomalies. This capability enhances operational efficiency and aids in maintaining a robust
and secure system environment.
Elastic Cloud is also a powerful tool in the realm of Business Intelligence, particularly when
integrated with Kibana. The combination of Elasticsearch and Kibana enables the creation of
dynamic visualizations and dashboards. This is instrumental in transforming complex datasets
into meaningful insights, facilitating data-driven decision-making and supporting business
intelligence initiatives.
Observability is another key application, with Elastic Cloud playing a pivotal role in
monitoring application performance, infrastructure health, and security events. The platform
provides comprehensive tools to track and analyze the behavior of applications and systems
in real-time, contributing to proactive issue resolution and optimization of overall system
performance.
Security Analytics is an area where Elastic Cloud excels, offering robust features for detecting
threats and investigating security incidents. By leveraging Elasticsearch's capabilities,
organizations can analyze security-related data, identify patterns indicative of potential
threats, and respond swiftly to mitigate risks.
In summary, Elastic Cloud is a versatile platform with applications ranging from real-time
search and analytics to log analysis, business intelligence, observability, and security
analytics. Its flexibility and powerful features make it a go-to solution for organizations
seeking to harness the full potential of their data for operational efficiency, informed decision-
making, and enhanced security.

3.4.4 Benefits of Elastic Cloud

Elastic Cloud stands out as a preferred solution for organizations seeking a streamlined and
efficient approach to managing Elasticsearch clusters. One key advantage lies in its simplicity,
significantly simplifying the deployment and management of Elasticsearch clusters. This
reduction in operational overhead allows users to focus on leveraging Elasticsearch's
capabilities without the complexities associated with infrastructure management.
Scalability is a pivotal feature of Elastic Cloud, offering the flexibility to effortlessly scale
Elasticsearch clusters to accommodate growing data volumes and increased user loads. This
scalability ensures that organizations can adapt to evolving requirements and maintain optimal
performance even as their data and user base expand.
Security is prioritized in Elastic Cloud, providing robust features right out of the box. This
commitment to security ensures that sensitive data within Elasticsearch clusters is well-
protected, meeting industry standards and compliance requirements.
The platform's support for multiple cloud providers contributes to its versatility. With multi-
cloud support, users have the freedom to choose the cloud provider that aligns best with their
specific needs, allowing for seamless integration into existing infrastructure and workflows.
High availability is a fundamental characteristic of Elastic Cloud, ensuring continuous uptime
and data accessibility. This reliability is crucial for organizations that depend on Elasticsearch
for real-time data retrieval and analysis, minimizing downtime and optimizing overall system
performance.
Additionally, Elastic Cloud offers potential cost savings compared to self-managed
deployments. By outsourcing operational tasks and leveraging cloud-native features,
organizations can optimize resource utilization, reduce infrastructure costs, and benefit from
a more cost-effective Elasticsearch solution.
In summary, Elastic Cloud's simplicity, scalability, security features, multi-cloud support,
high availability, and potential cost savings make it a compelling choice for organizations
seeking an efficient and reliable solution for managing Elasticsearch clusters.

3.4.5 Risks of Elastic Cloud

While Elastic Cloud offers numerous benefits, it is important to consider potential drawbacks
that organizations may encounter.
One significant consideration is the cost associated with using a managed service. While the
convenience of Elastic Cloud in handling operational tasks is undeniable, organizations should
be mindful of potential additional costs compared to self-hosting. Managed services often
come with a subscription or usage-based pricing model, and these expenses can accumulate
over time. It's crucial for businesses to assess their budget constraints and weigh the
convenience against the financial implications.
Another consideration is the potential limitation on advanced customization options in a
managed service compared to a self-hosted environment. While Elastic Cloud streamlines
deployment and management, some organizations may find that certain highly specialized or
intricate customizations available in a self-hosted setup may be restricted in a managed
service. This limitation can be a concern for businesses with unique requirements that demand
a high degree of customization and control over their Elasticsearch environment.
In conclusion, while Elastic Cloud offers a wealth of advantages, organizations should
carefully evaluate the associated costs and consider any limitations on advanced customization
before deciding on the most suitable deployment option for their specific needs. This balanced
approach ensures that businesses can leverage the benefits of Elastic Cloud while being
mindful of potential drawbacks that may impact their overall operational strategy.

3.5 Blockchain

3.5.1 Definition of Blockchain

Blockchain is a shared, immutable ledger that facilitates the process of recording transactions
and tracking assets in a business network. An asset can be tangible (a house, car, cash, land)
or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value
can be tracked and traded on a blockchain network, reducing risk and cutting costs for all
involved.

3.5.2 Why blockchain is important?

Business runs on information. The faster it’s received and the more accurate it is, the better.
Blockchain is ideal for delivering that information because it provides immediate, shared and
completely transparent information stored on an immutable ledger that can be accessed only
by permissioned network members. A blockchain network can track orders, payments,
accounts, production and much more. And because members share a single view of the truth,
you can see all details of a transaction end to end, giving you greater confidence, as well as
new efficiencies and opportunities.
3.5.3 Key elements of a Blockchain

Distributed ledger technology: All network participants have access to the distributed ledger
and its immutable record of transactions. With this shared ledger, transactions are recorded
only once, eliminating the duplication of effort that’s typical of traditional business networks.
Immutable records: No participant can change or tamper with a transaction after it’s been
recorded to the shared ledger. If a transaction record includes an error, a new transaction must
be added to reverse the error, and both transactions are then visible.
Smart contracts: To speed transactions, a set of rules — called a smart contract — is stored
on the blockchain and executed automatically. A smart contract can define conditions for
corporate bond transfers, include terms for travel insurance to be paid and much more.

3.5.4 How blockchain works.

As each transaction occurs, it is recorded as a “block” of data: Those transactions show the
movement of an asset that can be tangible (a product) or intangible (intellectual). The data
block can record the information of your choice: who, what, when, where, how much and even
the condition — such as the temperature of a food shipment.
Each block is connected to the ones before and after it: These blocks form a chain of data as
an asset moves from place to place or ownership changes hands. The blocks confirm the exact
time and sequence of transactions, and the blocks link securely together to prevent any block
from being altered or a block being inserted between two existing blocks.
Transactions are blocked together in an irreversible chain: a blockchain: Each additional
block strengthens the verification of the previous block and hence the entire blockchain. This
renders the blockchain tamper-evident, delivering the key strength of immutability. This
removes the possibility of tampering by a malicious actor — and builds a ledger of transactions
you and other network members can trust.
3.5.5 Benefits of Blockchain

What needs to change: Operations often waste effort on duplicate record keeping and third-
party validations. Record-keeping systems can be vulnerable to fraud and cyberattacks.
Limited transparency can slow data verification. And with the arrival of IoT, transaction
volumes have exploded. All of this slows business, drains the bottom line — and means we
need a better way. Enter blockchain.
Greater trust: With blockchain, as a member of a members-only network, you can rest assured
that you are receiving accurate and timely data, and that your confidential blockchain records
will be shared only with network members to whom you have specifically granted access.
Greater security: Consensus on data accuracy is required from all network members, and all
validated transactions are immutable because they are recorded permanently. No one, not even
a system administrator, can delete a transaction.
More efficiencies: With a distributed ledger that is shared among members of a network, time-
wasting record reconciliations are eliminated. And to speed transactions, a set of rules —
called a smart contract — can be stored on the blockchain and executed automatically.

3.5.6 Types of Blockchain networks

There are several ways to build a blockchain network. They can be public, private,
permissioned or built by a consortium.
Public blockchain networks: A public blockchain is one that anyone can join and participate
in, such as Bitcoin. Drawbacks might include substantial computational power required, little
or no privacy for transactions, and weak security. These are important considerations for
enterprise use cases of blockchain.
Private blockchain networks: A private blockchain network, similar to a public blockchain
network, is a decentralized peer-to-peer network. However, one organization governs the
network, controlling who is allowed to participate, execute a consensus protocol and maintain
the shared ledger. Depending on the use case, this can significantly boost trust and confidence
between participants. A private blockchain can be run behind a corporate firewall and even be
hosted on premises.
Permissioned blockchain networks: Businesses who set up a private blockchain will generally
set up a permissioned blockchain network. It is important to note that public blockchain
networks can also be permissioned. This places restrictions on who is allowed to participate
in the network and in what transactions. Participants need to obtain an invitation or permission
to join.
Consortium blockchains: Multiple organizations can share the responsibilities of maintaining
a blockchain. These pre-selected organizations determine who may submit transactions or
access the data. A consortium blockchain is ideal for business when all participants need to be
permissioned and have a shared responsibility for the blockchain.
Blockchain security: Risk management systems for blockchain networks
When building an enterprise blockchain application, it’s important to have a comprehensive
security strategy that uses cybersecurity frameworks, assurance services and best practices to
reduce risks against attacks and fraud.

3.5.7 Features of Blockchain

Blockchain technology, renowned for its transformative impact, is characterized by several

key features that contribute to its unique and robust nature.
One fundamental aspect is decentralization, where data is distributed and stored across a
multitude of network nodes rather than being centralized at a single point. This decentralized
structure enhances the resilience and security of the system, as there is no single point of
failure. It also mitigates the risk of unauthorized alterations or disruptions to the network.
Transparency is another hallmark feature of blockchain. Every transaction conducted on the
blockchain is visible to all members of the network, and these transactions can be reviewed
and verified by any participant. This transparency not only fosters trust among users but also
provides a comprehensive and auditable record of all activities, promoting accountability and
integrity within the system.
Immutability is a crucial characteristic ensuring the integrity of data on the blockchain. Once
data is added to a block, it becomes permanent and cannot be altered or deleted. This
immutability not only enhances the reliability of the information but also serves as a powerful
tool for maintaining the integrity of records and preventing fraudulent activities.
Smart contracts represent another innovative feature of blockchain technology. These self-
executing contracts are coded with predefined rules and conditions. When these conditions
are met, the smart contract automatically executes and fulfills its terms without the need for
intermediaries. This automation streamlines various processes, reduces the risk of errors, and
enhances the efficiency of transactions, making blockchain a versatile tool for a wide range of
applications beyond traditional financial transactions.
In summary, the decentralization, transparency, immutability, and smart contract capabilities
of blockchain technology collectively contribute to its transformative potential. These features
not only redefine how data is managed and transactions are conducted but also open up new
possibilities for secure, transparent, and efficient solutions across diverse industries.

3.5.8 Applicability of Blockchain

Blockchain technology has found wide-ranging applicability across various industries,

introducing innovative solutions to longstanding challenges. Several sectors have embraced
blockchain for its potential to enhance security, transparency, and efficiency. Here are some
key areas where blockchain is making a significant impact:
In the realm of Finance and Banking, blockchain is revolutionizing traditional processes such
as money transfers and international payments. By leveraging blockchain's decentralized and
secure nature, financial institutions can streamline cross-border transactions, reducing the time
and cost associated with conventional methods. The immutability of blockchain records
ensures the integrity of financial transactions, reducing the risk of fraud.
Healthcare is another sector benefiting from blockchain. The technology is being utilized for
the secure and transparent management of medical records and medication tracking.
Blockchain enables the creation of a tamper-resistant and easily accessible ledger of patient
information, facilitating seamless collaboration among healthcare providers while ensuring
data integrity and patient privacy.
Securities and Assets are also being transformed by blockchain. In the field of securities
trading and asset management, blockchain offers a decentralized and transparent platform for
transactions. This has the potential to reduce complexities in processes, enhance liquidity, and
improve overall efficiency in managing securities and assets.
Identity Verification is a critical application of blockchain, particularly in the context of digital
identity. Blockchain provides a secure and decentralized method for verifying and managing
identities without the need for a central authority. This not only enhances privacy and security
but also offers individuals greater control over their personal information.
In conclusion, the applicability of blockchain extends across diverse industries, and its impact
is particularly notable in finance and banking, healthcare, securities and assets, as well as
identity verification. As blockchain technology continues to evolve, it is likely to inspire
further innovations and disrupt traditional models in these and other sectors, offering new
opportunities for efficiency, transparency, and security.

3.5.9 Pros and Cons of Blockchain

Blockchain technology boasts several key advantages that contribute to its widespread
adoption and transformative impact across various industries.
First and foremost, one of the most significant pros of blockchain is its high level of security.
The combination of advanced encryption techniques and decentralization makes blockchain
inherently resistant to unauthorized access and tampering. The decentralized nature of the
network means that there is no single point of vulnerability, reducing the risk of cyberattacks
and ensuring the integrity of data stored on the blockchain.
Another compelling advantage is the reduction in centralized costs. By leveraging
blockchain's decentralized architecture, the need for a central authority or intermediary is
eliminated. Traditional processes often involve intermediaries, leading to additional costs and
delays. With blockchain, transactions can occur directly between parties, streamlining
processes and reducing operational costs associated with centralized control.
Increased transparency is a noteworthy benefit of blockchain technology. Every transaction
conducted on the blockchain is visible to all participants in real-time. This transparency not
only builds trust among users but also creates a comprehensive and auditable record of
activities. Participants can track the entire transaction history, fostering accountability and
ensuring that the information on the blockchain is reliable and trustworthy.
Immutability is another crucial advantage offered by blockchain. Once data is added to the
blockchain, it becomes part of an unchangeable and tamper-resistant ledger. This feature
ensures the integrity and permanence of records, making it practically impossible to modify
or delete information once it has been added to the blockchain. This immutability enhances
the reliability of data and is particularly valuable in scenarios where data integrity is
paramount.
In summary, the high security, reduced centralized costs, increased transparency, and
immutability of blockchain collectively contribute to its appeal and applicability across
various industries. As blockchain technology continues to evolve, its impact on enhancing
security, efficiency, and trust in digital transactions is likely to expand further.
Despite the promising features of blockchain, it is crucial to acknowledge several challenges
and drawbacks associated with this technology.
One significant concern is the substantial energy consumption involved in the process of
verifying transactions, particularly in blockchain networks that utilize proof-of-work
consensus mechanisms. The energy-intensive nature of mining, where transactions are
validated and added to the blockchain, has raised environmental concerns and criticism, as it
can contribute to a considerable carbon footprint.
Another noteworthy limitation is the relatively slow and uneven adoption of blockchain across
various industries. While certain sectors, such as finance and supply chain, have embraced
blockchain for its transformative potential, many industries have been slow to adopt the
technology. Factors such as regulatory uncertainties, lack of standardized frameworks, and
concerns about integration with existing systems contribute to the hesitancy in widespread
adoption.

Additionally, blockchain faces challenges related to scalability. As the number of transactions

increases, some blockchain networks encounter limitations in processing speed and capacity.
This scalability issue can lead to delays, higher transaction costs, and hinder the technology's
ability to efficiently handle large-scale operations.
Despite these challenges, ongoing research and development efforts within the blockchain
community are focused on addressing these limitations. Alternative consensus mechanisms,
scalability solutions, and increased awareness about energy-efficient approaches are being
explored to enhance the overall performance and acceptance of blockchain technology. As the
technology continues to evolve, these challenges may be mitigated, paving the way for broader
and more sustainable adoption across various industries.
CHAPTER 4. THE DIGITAL ENTERPRISE (THE DIGITAL ADVERTISING)
4.1 Definition of targeted marketing and advertising

Targeted advertising is an approach to raise awareness for a product or service among a

specific group of audiences, this is a form of online advertising that focuses on the specific
traits, interests, and preferences of a consumer. Advertisers discover this information by
tracking your activity on the Internet.

4.2 Benefits of utilizing digital channels

4.2.1 Increased reach and visibility

Unlike traditional marketing methods confined by geographical limitations, digital channels

like social media, search engines, and websites transcend borders. You can reach a global
audience, connecting with potential customers anywhere in the world, vastly expanding your
potential market.

Gone are the days of one-size-fits-all advertising. Digital platforms provide powerful targeting
options based on demographics, interests, online behavior, and more. This pinpoints your
message to precisely who matters, maximizing its impact and effectiveness.

Your audience is already online, engaging with social media, search engines, and various
digital platforms daily. By being present on these channels, you're readily accessible, making
it easier for potential customers to discover and learn about you.

Moreover, the beauty of digital marketing lies in its data-driven approach. Tools and analytics
track website traffic, engagement metrics, and conversion rates, providing valuable insights
into how your efforts are performing. This allows you to continuously optimize your strategies
and maximize your reach.
The last one is Scalability and flexibility. Whether you're a small startup or a global
corporation, digital channels cater to your needs. Adjust your campaigns in real-time, scale
your budget based on performance, and experiment with different strategies to see what
resonates best with your audience.

4.2.2 Ability to target specific audience segments

The Power of Precision: Targeting Specific Audience Segments with Digital Channels.

While increased reach and visibility are crucial benefits of digital marketing, the ability to
target specific audience segments sets it truly apart from traditional methods. Imagine tailoring
your message to resonate deeply with a specific group, rather than shouting into the void
hoping someone will listen. That's the power of targeted marketing in the digital realm.

By focusing on audiences who share specific interests, demographics, or online behavior, you
can craft messages that speak directly to their needs and desires. This personalized approach
leads to higher engagement, as your content feels more relevant and valuable to your target
audience.

Targeting ensures your ads and campaigns reach individuals most likely to convert. Imagine
showcasing sports equipment to fitness enthusiasts instead of casual internet browsers. You're
putting the right message in front of the right people, dramatically increasing the likelihood of
conversions and sales.

With limited budgets, targeting helps you spend your marketing resources wisely. By focusing
on your ideal customer segments, you avoid wasting resources on irrelevant audiences,
maximizing your return on investment and ensuring your efforts reach the most receptive
individuals.
Precise targeting demonstrates your understanding of your audience and their needs. This
fosters a more positive perception of your brand, showcasing your dedication to customer-
centricity and building trust with potential customers.

4.2.3 Cost-effective compared to traditional advertising

Cost-effectiveness ranks high among the many benefits of utilizing digital channels for
marketing endeavors. Compared to traditional advertising methods like television
commercials, billboards, and print ads, digital channels offer significant savings while
delivering potent reach and engagement.

As bellowed, digital channels allow you to pinpoint your ideal audience segments with laser
precision. This eliminates the wasteful broadcast approach of traditional methods, where your
message reaches a large population, but only a small fraction may be interested in your product
or service. By narrowing your focus, you maximize the impact of your budget and avoid costly
advertising spend on irrelevant audiences.

Gone are the days of ambiguous metrics and uncertainty with traditional advertising. Digital
channels provide real-time data and detailed analytics on campaign performance. You can
track everything from impressions and clicks to conversions and ROI, allowing you to
optimize your budget allocation and adapt your strategies for maximum efficiency.

Traditional advertising often involves hefty upfront costs for production, placement, and
distribution. Digital channels, on the other hand, offer more accessible options like social
media marketing, email campaigns, and content marketing. These often require lower initial
investment and can be scaled gradually, making them ideal for startups and small businesses
with limited budgets.

The beauty of digital marketing lies in its vast array of cost-effective channels and strategies.
From search engine optimization (SEO) and social media advertising to email marketing and
influencer collaborations, you can choose options that fit your budget and target audience.
This scalability allows you to start small and gradually expand your reach as your business
grows.

4.3 Case study - The digital enterprise

4.3.1 About L’Oreal

Established in Vietnam in mid-2007, after 15 years L'Oréal has become a leading company &
contributed to shaping the future of the domestic beauty industry.

L'Oreal has brought to the Vietnamese market 13 of the Group's 36 prestigious international
brands, reaching consumers in all industries and distribution channels.

They have four divisions:

• L’Oréal Luxe (LUXE)

• Consumer Products Division (CPD)

• Professional Products Division (PPD)

• L’Oréal Dermatological Beauty (LDB)

4.3.2 About CeraVe

Developed in the US with dermatologists, CeraVe offers a complete line of skincare products
that contain three essential ceramides enhanced with a revolutionary delivery system to help
restore the skin’s natural protective barrier.

The CeraVe story began in 2005 after experts noticed that many skin conditions such as acne,
eczema, psoriasis and dry skin all had one thing in common: a compromised skin
barrier..CeraVe has decided to come to Vietnam from September 2022 and belonging to
L’Oréal Dermatological Beauty (LDB).
4.3.3 Digital Marketing of CeraVe
4.3.3.1 Website

CeraVe’s website is ranked #117 in the Beauty and Cosmetics category and #32222 globally.
The website’s traffic has decreased by 19.21% compared to the previous month. The average
visit duration is approximately 1 minute and 29 seconds, with an average of 2.54 pages visited
per session. The bounce rate, which is the percentage of visitors who navigate away from the
site after viewing only one page, is 61.07%. The website’s audience is 39.18% male and
60.82% female, with the largest age group of visitors being 25 - 34 year olds. It can be seen
that, although the website and the fanpage on Facebook does not attract too much traffic, it is
still the first step for a brand to begin digital transformation and CeraVe can use that to run
the ads for the marketing campaigns.

Figure 4. 1 Official website of CeraVe

 Figure 4. 2 Fanpage of CeraVe Vietnam
4.3.3.2 Display ads (Banner ads & Native ads)

CeraVe has a significant presence in digital, print, and national TV advertising. They invest
in premium ad units and have advertised on over 250 different media properties in the last
year across multiple media formats. Based on the report in 2022, they have spent under $100
million on advertising in the last year. Their banner ads are often seen on various websites,
including health and beauty platforms. As you can see in Picture 3.3, CeraVe is promoted on
banner advertising in Kenh14, which is a famous article for the young.

CeraVe also has effectively used native advertising to boost brand awareness and sales. They
have run successful campaigns on platforms like Snapchat. Their Snapchat campaign used a
multi-format approach, leveraging augmented reality (AR) and Video Ads. The AR Lens
enabled users to experience different products and learn more about how to use them in a
simple yet effective day-and-night routine. They also promoted free samples of their face-care
products formulated for specific skin types. The campaign resulted in a significant lift in brand
and ad awareness.
CeraVe uses a mix of traditional banner advertising and innovative native advertising
strategies to reach its target audience and boost brand awareness and sales. They leverage
popular social media platforms and use engaging formats like AR to create memorable and
interactive experiences for their audience.

4.3.3.3 Ecommerce – TikTok

The official TikTok account of CeraVe Vietnam, @cerave.vietnam_official, is a dynamic and

engaging platform with a substantial following of 117.5K and over 505K likes on its content.
The account primarily posts a variety of content that highlights the benefits of their skincare
products, such as their ability to lock in moisture and improve skin health. They frequently
utilize hashtags like #CeraVeCoCeramides, #CeRaHuTon, #CeraVeVNChinhHang, and
#Số1TạiMỹ to increase visibility. In addition to regular posts, the account also promotes sales
and special offers, such as their “SUPER MEGA SALE” event. To provide more interactive
content for their followers, they host live videos on TikTok at least 14 times per week and one
live stream session is 4 hours long. In addition, CeraVe has developed in many other e-
commerce platforms such as Shopee, Lazada,… but TikTok is currently still the platform that
combines the most digital marketing elements.
 Figure 4. 3 CeraVe’s official TikTok account
4.3.3.4 Affiliate marketing with KOLs/KOCs

CeraVe has a lucrative affiliate program. Individuals can join this program to earn passive
income by promoting CeraVe’s products. Affiliates earn a commission for every sale made
through their unique affiliate link through Shopee, Lazada or TikTok. The more sales they
generate, the more money they can earn.

CeraVe also provides marketing materials, products and resources to help

KOLs/KOCs/Influencers promote their products effectively. It provides them with the
necessary tools and support to effectively promote CeraVe’s products through their
experiences when they use the CeraVe's products, share their thoughts, pin the affiliate links
and earn a commission.
 Figure 4. 4 KOLs/KOCs use the CeraVe’s products and use affiliate links

4.3.4 Compare to the competitor - Cetaphil

4.3.4.1 Introduce Cetaphil

Cetaphil is a skincare brand that belongs to Galderma Laboratories. Cetaphil has been
recommended by dermatologists for over 70 years, much more than CeraVe, and is today used
by millions of people with sensitive skin from all over the world.

The Cetaphil brand has been present in the Vietnamese market for more than 10 years, but
after only 3 years of establishment, Cetaphil has become the best-selling skin care product
compared to other cosmetic lines. This has affirmed the brand's safety and reputation as well
as the customer's quality of the product. Cetaphil is a cosmetic line proven by dermatologists
to be suitable for all skin types, even the most sensitive skin.

4.3.4.2 Analyze

CeraVe and Cetaphil have both implemented digital marketing strategies, but CeraVe’s
approach appears to have been more successful in recent years:
Social media presence: CeraVe has effectively utilized social media platforms, especially
TikTok, to increase its brand visibility. The brand has become a favorite among Gen Z users
especially on TikTok, and its marketing team actively monitors social media to identify
relevant cultural moments to promote the brand.

User-generated content: CeraVe has encouraged user-generated content, particularly through

the use of hashtags on social media. This strategy has helped to drive social conversations
about the brand and its products.

Sales growth: In 2/2023 CeraVe’s digital marketing efforts have contributed to significant
sales growth. The brand generated 12,39B in sales, with part of this growth linked to viral
videos about CeraVe on TikTok. Besides, Cetaphil only gets 7.52B in sales in the same
periods, but Cetaphil brand also had the highest growth (71%). Cetaphil has also launched
integrated marketing campaigns to broaden awareness and engage users through mobile and
social media. However, it seems that CeraVe’s strategies have been more effective in driving
user engagement and sales growth.

Figure 4. 5 Top 5 best-selling facial cleanser brands in March on Shopee and Lazada Source:
YouNet ECI
4.3.5 Lessons learned and best practices

In the ever-evolving landscape of skincare, CeraVe has emerged as an unexpected favorite

among the Gen Z demographic, largely due to its strategic and effective use of the social media
platform, TikTok. The brand has astutely harnessed the power of this platform to not only
promote its products but also to foster a sense of community among its users and potential
customers. This community-building approach has been a key factor in the brand’s success,
as evidenced by the significant surge in user reviews on Shopee, Lazada or TikTok,... for one
of their flagship products.

CeraVe’s success story is particularly noteworthy given the backdrop of the COVID-19
pandemic, which has posed unprecedented challenges to businesses worldwide. Despite these
hurdles, CeraVe demonstrated remarkable resilience and adaptability. The brand was quick to
recognize and respond to changing consumer habits, ensuring that it continued to meet the
needs and expectations of its customers even in the face of adversity.

This adaptability was not only crucial for maintaining customer loyalty during a challenging
period but also played a significant role in driving the brand’s growth. In fact, CeraVe’s parent
company reported an impressive growth of over 40% in its LDB, a testament to the brand’s
successful strategies and the strong demand for its products.

One of the key selling points of CeraVe’s products is their affordability. Despite offering high-
quality skincare solutions, the brand has managed to keep its prices accessible, making it a
popular choice among a wide range of consumers. Moreover, CeraVe’s products are easily
available in drugstores nationwide, further enhancing their appeal by ensuring that customers
can conveniently purchase their favorite products.

CeraVe’s rise to popularity among Gen Z users can be attributed to a combination of effective
social media strategies, a strong focus on community-building, adaptability in the face of
challenges, affordable pricing, and widespread availability. These factors have collectively
contributed to the brand’s success and its status as a favorite in the skincare industry.

4.4 Conclusion

4.4.1 Recap of the importance of utilizing digital channels for targeted marketing and
advertising

The power of digital channels to improve targeted marketing and advertising has added
immense value to firms. This value is not limited to tangible benefits such as increased
customer base and income, but also encompasses intangible advantages like reputation, brand
recognition, customer relationships, and trust in the business.

Furthermore, to make necessary modifications and changes, organizations should have

effective measures in place for this process. Particularly, with adequate metrics in place to
monitor the effectiveness of digital applications, advertisers can achieve their most important
objectives and measure their success using key performance indicators (KPIs). By harnessing
the power of digital channels, businesses can unlock their full potential and achieve greater
success than ever before.

As an example: In early 2024, A's bakery plans to undertake a campaign to boost the amount
of pre-ordered cakes. To achieve this aim, two key performance indicators (KPIs) will be
utilized to assess the efficacy of the campaign, including the number of cakes sold. Pre-ordered
cake and the expense of convincing a consumer to purchase a cake (CPC: cost per customer).
CPC is the average price a company has to pay for each click on an ad that appears alongside
a certain search result. Moreover, the conversion rate (which is the proportion of visitors that
performed a desired action (for example, purchasing a cake or completing a registration form
to receive cake consulting) should be mentioned here.)
The index will assist you in setting and resetting your goals to reflect your consumers' actual
preferences, thus enhancing the efficacy of your advertising. Indicators, on the other hand,
enable businesses to analyse the benefits and negatives of implemented campaigns, allowing
them to adapt and develop their advertising to become better.

While adopting a particular approach can bring about plenty of benefits, it is equally crucial
to consider the security implications and limitations that may exist. It is imperative to evaluate
the company's available resources, including cash flow and social factors, to determine the
feasibility of implementing additional actions. Taking these aspects into account can help to
ensure that the chosen approach is all about chasing for profit but more significantly is about
sustainable development over the long term.

4.4.2 Potential for business growth and success through effective implementation

Based on the chart presented above, it is evident that there will be a significant rise in the
number of internet users in Vietnam in the coming years. Consequently, businesses that can
adeptly leverage digital channels to identify potential markets for their marketing and
advertising campaigns stand to benefit greatly by tapping into a large pool of prospective
customers. This could lead to increased conversions, higher revenue streams, and potentially
even greater market penetration, granting them a competitive edge in their respective
industries.
CHAPTER 5. THE CHALLENGES WHEN BUSINESSES RESIST DIGITAL
TRANSFORMATION AND THE BENEFITS WHEN BUSINESSES UNDERGO
DIGITAL TRANSFORMATION.
5.1 Advantageous factors if businesses conduct digital transformation

In addition to the disadvantages when businesses do not transform digitally, below will be the
benefits that businesses can achieve if they apply digital transformation in the process of
developing their businesses.

5.1.1 Improve performance and boost productivity

Digital transformation will make businesses improve performance and enhance work
productivity by optimizing business and production processes. Through the use of advanced
technologies, businesses can automate work steps, eliminate inefficient manual processes, and
minimize errors. This enhances performance and quality of work, reduces completion time
and saves resources. Digital transformation allows businesses to apply automation and
artificial intelligence at work, helping to optimize processes, minimize manual effort and
significantly enhance work productivity. These technologies can quickly and accurately
handle repetitive and complex tasks, helping employees focus on tasks that require creativity
and thinking.

5.1.2 Good use of resources

Companies, regardless of size, are exposed to vast amounts of information from a variety of
sources, including internal information and from partners such as customers, business
partners, and the surrounding ecosystem. In the past, information management was often a
manual and complex process, especially when dealing with physical information such as paper
documents, figures, and other problems. In fact, this often leads to damage, obscurity or even
loss over time or due to human carelessness. Each department in the enterprise often has its
own separate metric system, which creates inconsistencies between them. This situation
causes information to be scattered, making it difficult to connect and manage, costing time.
Managing and controlling information in the enterprise becomes difficult, it is impossible to
statistics what data exists, where, and in what condition.

Digital transformation is seen as the solution to these challenges by building roadmaps and
implementing tools and applications to optimize business operations through the consolidation
of information and resources. Instead of using distributed software and databases, resources
are more concentrated, bringing greater efficiency. This also supports the "Customer-centric"
digital culture, which is now widely implemented in many businesses.

5.1.3 Enhance customer experience and value.

The digital transformation process opens up new opportunities for businesses to interact
strongly with customers through digital platforms. Leveraging data and analytics, businesses
can gain a deeper understanding of customer needs and habits and tailor the experience to
meet expectations accurately. Another important aspect of digital transformation is the ability
to build mobile applications and online trading platforms, making it easy for customers to
access and use products or services from anywhere and at any time. Digital transformation
provides a friendly and convenient digital environment for customers, including service
registration, online support, as well as payment facilities and freight forwarding processes.

5.1.4 Gain a competitive advantage in the market

Modern businesses are leveraging digital transformation to take advantage of cutting-edge

technology, create new and innovative products and services, and flexibly respond to customer
needs. Pioneering products and services not only provide a competitive advantage but also
attract a large number of new customers.
Digital transformation also opens up opportunities to maximize the power of big data and
artificial intelligence. Businesses can use them to deeply analyze markets, customers and
competitors, thereby making smart decisions, optimizing business strategies and improving
operational performance.

Through this process, businesses not only grasp but also develop new technology trends, apply
them flexibly to their business model. This helps to stay competitive and quickly adapt to
market fluctuations and changes in customer needs.

5.1.4.1 Optimizing the profitability of the business

Businesses can leverage Digital Transformation to evaluate and optimize business processes
through data analysis and automation. By reducing unnecessary manual steps and optimizing
processes, operational time and costs can be minimized. The reduction in the use of paper and
text documents not only saves printing and storage costs, but also protects the environment
through the application of electronic document storage and management systems. This not
only brings benefits in terms of logistics costs, but can also enhance revenue and profits.

In addition, Digital Transformation also allows businesses to explore and apply advanced
technologies to create new products and services. Advancement in product and service
delivery can create competitive advantage, attract new customers and respond quickly to their
needs.

Nike can be a typical example when thanks to digital transformation, Nike's profits have
grown rapidly in the era of Covid-19. Having spent years pioneering the retail industry, Nike
has positioned itself as a business with a unique vision for digital technology. Over the past
decade, the adoption of advanced technological advancements combined with the "Direct-to-
Consumer Accelerator" (CDA) strategy has not only helped Nike overcome the challenges of
the turbulent times of the past two years, but also brought the company to a strong level of
growth.

Figure 5. 1 Nike's profits

Before the COVID-19 pandemic, Nike had rightly made several strategic digital investments,
including the launch of mobile apps such as the Nike mobile app, SNKRS, NTC (Nike
Training Club), and NRC (Nike Running Club). Notably, Nike's fitness app, Training Club,
has been a major contributor to sales growth in China, with a 30% increase during the
pandemic. Digital channels and apps now account for 26% of Nike's total revenue, as revealed
in its Q3 earnings report with digital sales in the U.S. up 33% year-over-year. During that
quarter, Nike's revenue reached $10.9 billion, with a net profit of $1.39 billion, down 4% from
the same period in 2021.
5.2 Disadvantageous factors if businesses conduct digital transformation

As mentioned in the above sections, we can see the importance of Digital Transformation for
business development today. Today's era is the 4.0 era, this is the era of the digital era, where
almost every activity of the business is optimized and productivity improved. Most businesses
that want to maximize their profits must apply digital transformation to every business
process. According to Microsoft's research in the Asia Pacific region, in 2017, the impact that
digital transformation brings to GDP is about 6%, in 2019 it is 21% and by 2021 it is 60%.

Figure 5. 2 GDP statistics for the Asia Pacific region

McKensey research results show that, by 2025, the impact of digital transformation on the
GDP of the US is about 25%, for Brazil it is 35%, and in European countries it is about 36%.
From here, it can be seen that the impact of digital transformation on GDP growth is huge.
Therefore, without digital transformation, businesses will face many difficulties in
maximizing profits, improving productivity, and losing competitive advantages with other
businesses in the market. This is very dangerous for businesses. Here will be a few of the
difficulties that businesses face when they do not keep up with the trend of digital
transformation.
5.2.1 Not enough information for market research and product development

Market research is the process of collecting information and data related to the field of
business, including: customers, competitors, target markets,... Through that, businesses will
build an accurate orientation, set appropriate strategies, aiming for sustainable and long-term
development in the future. Each business will apply different research methods depending on
the purpose, such as entering the market, launching new products or services or conducting
communication campaigns. However, in all cases, this is a necessary operation, ensuring the
provision of sufficient accurate information, helping businesses plan appropriate strategies to
achieve high efficiency in business. The purpose of market research is to find the correct
answers to problems that arise in the business process. Identifying the right causes will help
businesses solve well and propose measures to reach the target market in the most effective
way.

To be able to make upcoming decisions and strategies for businesses, businesses must collect
enough information about customers, competitors and future market trends. At this time,
businesses will be faced with collecting and processing a huge amount of information. Lack
of technology can make gathering market data more monotonous and expensive. Gathering
information from a hearsay source or through traditional means such as manual survey surveys
can reduce the accuracy and reliability of data. If done with manual methods, it can slow down
the data analysis process, reducing the ability to make quick decisions. This can be a big risk
when markets fluctuate rapidly. As a result, it is impossible to keep up with customer feedback
on products and services. Without technology, designing and conducting research would be
more difficult and expensive than ever, and manual information gathering would be
constrained by time and space. In addition, having too much information will make it difficult
for businesses to control and statistics information accurately, promptly and quickly.
Because of the above reasons, it becomes difficult for businesses to catch up with the trend in
time to develop their future products. When a business develops a product, they must study
the fluctuation in user tastes in terms of product type, model, quality. If businesses cannot
analyze information about consumer behavior in time, it will become difficult to develop
products according to market trends.

Currently, users tend to pay a lot of attention to the digital environment, especially after a
period of social distancing due to Covid-19. According to our report, the growth rate of online
consumers is expected to reach about 15-30%. Therefore, if businesses do not take advantage
of the advantages and trends of digital transformation, it will be difficult for businesses to
compete with their competitors in collecting information for product research and
development. (MCKinsey, 2020)

5.2.2 Missed opportunities to find potential employees

With the current development of technology, the fact that many businesses have posted
advertisements to recruit talented employees is very noticeable. With the current speed and
coverage of the Internet, such job posting will help businesses find talented human resources
quickly, easily measure and evaluate the performance of new employees. Without digital
transformation, attracting talented human resources on a large scale is impossible. In addition,
without digital transformation, it will be difficult for them to assess and measure the
performance of new employees. Not transforming the argument will make businesses not
timely respond to changes in future employment trends. Digital transformation helps
businesses manage the recruitment process more scientifically and effectively. If businesses
do not use recruitment management tools, it will be difficult to control the recruitment process,
thereby leading to a lack of transparency and efficiency. Manual recruitment will cost a lot in
terms of costs, while digital transformation in the field of recruitment will likely reduce costs
and reach more users. Currently, In the digital age, candidates tend to search for jobs through
online channels, such as recruitment websites, social networks,... If businesses do not have
online recruitment channels, it will be difficult to reach many potential candidates.

5.2.3 Information without alignment in business management

Currently, many businesses have applied digital transformation to put into the process of
managing the operation and organizing their internal apparatus. As a result, new businesses
can minimize costs, measure and evaluate in detail the productivity of employees. After the
emergence of digital transformation, there have been many processes put in place by experts
to be able to apply operating processes effectively and BPM is one of them. BPM (Zur
Muehlen, M.; Indulska, M., 2010) is a management principle that provides governance
capabilities to a process-oriented organization through business process modeling,
implementation, and evaluation, with operational flexibility and performance in mind. It
involves the use of a number of methods, policies, metrics, management practices, and
software tools to monitor and continuously improve an organization's business processes.
With BPM, there are six important factors for BPM to achieve efficiency and the digital
transformation system of information technology is the most important factor. Information
technology as a key component helps BPM to quickly and collectively evaluate the
information of the whole company, helping businesses to make the right strategies for the
future (Javaid Butt, 2020). Without digital transformation or information technology, it is
difficult to combine information between departments. A better example of this is the
deployment of information to employees. Without applying digital transformation
technologies in transmitting information to employees, businesses will take a lot of time to be
able to transmit all information to each employee. This will result in information not being
deployed in a timely and timely manner. Departments in their company will have information
asymmetry when the time it takes to receive information is different. As a result, businesses
will not be able to implement their strategies quickly and flexibly while flexibility is an
important feature of the market.

Another factor shows that the non-application of digital transformation in business

management is a huge disadvantage. As we all know the 3rd industrial revolution with the
advent and spread of information technology (IT), using electronics and information
technology to automate production, there are advances in electronic infrastructure, computers
and digital technology based on the development of semiconductors, supercomputers (1960s),
personal computers (1970s and 1980s), and the Internet (1990s). Until the end of the 20th
century, this process was basically completed thanks to high-tech scientific achievements.
Because of this, when coming to the 4th technology revolution (Technology 4.0), the process
of businesses today is fully automated and remote control. Moreover, these systems can be
automatically connected to each other and connected to the server. This is one factor that
digital transformation has brought that is IoT (Internet of Thing).
 Figure 5. 3 Illustration of a digital transformation system in a manufacturing process
This will provide us with both general and specific data on the state of the production process.
If the production process does not have the application of digital transformation, this will
cause difficulties for managers to check the status of the production process, not thoroughly
assess the condition of machines, and not synthesize information about the performance status
of the production system. In addition, managers also have to spend more time and costs or
may have to stop a production process completely to be able to find problems of a certain
system without digital transformation. That leads to production stalling, reducing the
efficiency of the process, leading to the loss of business opportunities when digital
transformation in the production process is now a trend of the entire enterprise.
5.3 Difficult to achieve goals in customer care:

User data is now seen as the main key to helping businesses succeed. User data analysis is
becoming more and more important in every direction and plan of businesses, especially in
the field of customer care. Efficient customer care process is an important factor that makes
customers feel satisfied with the business and at the same time, this also gives the business a
competitive advantage in the market. Currently, with the development of digital
transformation, customer service is promoted more than ever. Businesses can completely
automate their customer care process in a few cases such as: sending survey emails about
customer satisfaction after using product services, asking customers about product service
reviews, asking about the use of product services of businesses quarterly, monthly,....
Therefore, if businesses do not implement digital transformation in customer care, businesses
will face many difficulties. (Baranauskas G, 2018)

Keeping up with and being flexible with current consumer trends is essential. The vast
majority of consumers today are inclined to adapt and use digital transformation. Without
applying digital transformation in customer care, it will be difficult to reach customers on the
platforms they regularly use. No digital transformation will also slow down the process of
responding to customer feedback, this. It will be difficult for businesses to analyze the
preferences of each customer, not ensuring the storage of customer information. In addition,
it will be difficult for businesses to measure the performance of each individual, unit,
department or customer care campaign that managers offer. This also makes it difficult to keep
in touch with customers and difficult to answer customer complaints for businesses, causing
businesses to encounter many problems and difficult to find solutions. All of the above
disadvantages will make the enterprise lose its competitive advantage in the market . Other
businesses often pioneer transformation to have a competitive advantage over others. They
can provide better customer service, respond to customer needs more quickly and efficiently,
thereby attracting and retaining customers. Therefore, the difficulties when not digital
transformation in customer care will make businesses fail to achieve customer care goals,
reduce profits, sales of businesses,

5.4 Difficulties in reaching customers:

During the Covid-19 pandemic, the market is witnessing an eCommerce boom. With
movement restrictions, consumers have been forced to change their consumption habits to
online consumption . According to Digital Commerce 360's analysis of U.S. Commerce
Department data, consumers spent $791.70 billion online with U.S. retailers in 2020, up 32.4%
from the previous year's $598.02 billion. Online spending accounted for 19.6% of total retail
sales last year, compared to 15.8% in 2019.

Figure 5. 4 Statistics on spending on online shopping 2019-2020

Amazon.com Inc., the leading online retailer in North America, continues to record a
significant increase in its website traffic, even nearly a year after the COVID-19 pandemic
began in the US. In January, total visits to Amazon increased 20% compared to the same
period in 2020 and increased by 37% compared to February 2020, according to an analysis
from Digital Commerce 360 traffic data from web measurement firm SameWeb.
 Figure 5. 5 User traffic statistics at Amazon.com
In addition, we can easily see that social networks are now increasingly popular. The number
of social media users worldwide has grown to a record 4.9 billion globally. Moreover, this
number is expected to grow to around 5.85 billion users by 2027. These users are not limited
to a single platform, but they have accounts on 6-7 different platforms. This highlights the
need for a cross-platform approach to social media marketing.
 Figure 5. 6 Social network user traffic statistics
Because of this trend, if businesses do not digitally transform, it is very likely that businesses
will miss the opportunity to reach potential markets, not promote diverse brands. Currently,
the form of Online Advertising is being applied by many businesses (mentioned in chapter 4),
online advertising gives businesses a wide coverage of marketing scope and also high
performance. Nearly every business today has implemented digital transformation advertising
in their business, if they do not convert, they will definitely face many difficulties and cannot
compete with other competitors in the market.

In the current industry 4.0 era, digital transformation is no longer too big a challenge for
businesses, digital transformation is now a key to the success of businesses. Especially after
the Covid-19 pandemic, consumers have created for businesses a good opportunity for digital
transformation. Currently, digital transformation has also gradually improved and there are
many new breakthrough technologies such as Chat, GPT, AI, AR,... These are all good
opportunities for businesses to promote their brands and increase their sales. Businesses need
to seize opportunities in digital transformation, avoid falling into difficulties and gain an
advantage in the market.
 CONCLUSION
To summarize, Vietnam's digital transformation has been a remarkable journey marked by
tremendous advances in both policy and practical execution. The approval of a project aimed
at streamlining apparatus organization and boosting state management and law enforcement
capability in digital transformation demonstrates the government's commitment to developing
a digital economy. This programme, which spans the federal, state, and municipal levels, is
expected to be completed by 2025. Vietnam's Information and Communications Technology
(ICT) business delivered remarkable achievements in 2023, paving the way for further
development and increasing economic contribution in 2024. The Ministry of Information and
Communications (MIC) has played a critical role in this upward trend, considerably
contributing to the digital transformation by 2023. Likewise, the PwC Vietnam Digital
willingness Report identifies considerable potential for the country to accelerate digital
preparedness. It also highlights the need to bridge the digital skills development gap to ensure
that no one is left behind in the pursuit of the nation's digital economic successes.

Vietnam's National Digital Transformation Programme aims to create a digital-based

economy. The country's strategic geographic position and process technology have
transformed it into a digital centre, with integrated solutions replacing old infrastructure and
compartmentalized processes. This unique combination promotes Vietnam as a rapidly
developing location for forward-thinking businesses. Given these developments, it is evident
that Vietnam is not only embracing the digital revolution but also actively establishing itself
as a digital economy leader. The country's digital transformation path demonstrates its
resilience, adaptability, and foresight. Looking ahead, it is unambiguous that Vietnam's digital
transformation will continue to grow, propelled by a combination of government initiatives,
industry innovation, and the relentless pursuit of excellence.
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