Glossary of digital business

Glossary of digital business will help you make sense of digitalization-related terminology. Below, we’ll provide a broad selection of terms related to digital business from the viewpoints of business as well as design and technology. Our goal is not to provide you with academic definitions but to help you understand what digital jargon is all about. The glossary is in alphabetical order.

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A/B testing

A/B testing involves the testing of two variants in order to determine which one is better. For example, A/B testing can be used to find out which of two webpage options yields a better conversion rate. If it’s assumed that version A has a better conversion rate, it’s used as the basis for a new, slightly different version and then tested again to discover the better performing version.

Adaptive design

Adaptive design is an alternative to responsive design and relies on creating a separate program design (mobile vs. desktop) for each view. Adaptive design is often referred to as dynamic serving.

Agile (software) development

Agile software development or agile development for short is a group of methodologies used in software projects aimed at producing fit-for-purpose software faster and more reactively. Agile development can be understood as the opposite of traditional waterfall software development. Examples of agile methods include Scrum and Kanban.

API as a Service

API-as-a-Service (AaaS) combines the API economy and software renting and provides application programming interfaces as a service.

API economy

API economy is a business model where the use of application programming interfaces, or APIs, takes center stage. By using APIs, a company can, for instance, make their business processes or data available to others.

Application Programming Interface (API)

Application Programming Interface, API, is a communication channel through which two pieces of software (e.g. two digital platforms) can exchange information in a technical manner. APIs are central to the API economy and the platform economy, for instance.

Artificial intelligence (AI)

Artificial Intelligence (AI) is a computer program that is able to perform intelligent operations independently. Artificial intelligence is difficult to define, since giving an exhaustive definition of intelligence is already challenging.

B2B e-commerce

B2B e-commerce refers to an online store for businesses. Normally, B2B (business-to-business) e-commerce is understood as an ordering system. The difference to a B2C online store targeting consumers is, for example, the requirement to identify the buyer through registering and the need to provide different billing options (such as invoicing).

B2C e-commerce

B2C (business-to-consumer) e-commerce is a form of online commerce colloquially known as online shopping. B2C e-commerce refers to an online service that provides consumers with goods to purchase. Examples include shops such as NetAnttila or verkkokauppa.com.

B2D marketing

B2D (business-to-developer) marketing is an operational model that aims to engage software developers directly and by doing so affect customer acquisition. B2D marketing is a method of the platform economy which typically provides APIs in as developer-friendly form as possible to enable their proactive deployment.

Beta

A beta publication refers to a phase in online service development in which the service is coming together functionality-wise but genuine user experiences are required before the service can be finished in a user-centered way. In online service development, the aim of the beta phase is to recognize both programming issues and usability-enhancing procedures. The beta phase is particularly often used in connection with online services and it can be either freely available (open beta) or restricted to a specific target group (closed beta).

Big data

Big data refers to the collection, storage, sharing, searching, analyzing and presenting of enormous, unorganized and continuously growing masses of data with the help of statistics and information technology. As the Internet of Things and the Industrial Internet continue to spread, there is believed to be a growing demand for big data -related expertise.

Blockchain technology

Blockchain technology refers to the way in which operators that don’t know each other can produce and maintain decentralized databases. The technology allows for the members of the chain trust each other even though they don’t know one another. The best-known blockchain technology application is the virtual currency Bitcoin.

Business design

Business design is a modern business model conceptualization. Business design is closely related to service design and shares some of its principles but applies them to the business concept of the entire company. The central idea of business design is to alter business activities in a customer-oriented manner in order to create strong customer loyalty.

C2C e-commerce

C2C e-commerce refers to the selling of goods directly from one consumer to another online.  Typically, an online service serves as a platform and enabler for this type of digital commerce. Examples include tori.fi and huuto.net.

Call to action (CTA)

Call to action (or call-to-action, CTA) refers to a prompt that attracts the attention of a web page visitor and guides them to perform a desired action. A CTA is usually a link or an image which the visitor is supposed to click, or which requests the user’s email address or asks them to make a phone call. A CTA is one of the basic tools of conversion rate optimization.

Cloud adoption

Cloud adoption refers to an organisation’s move from its own servers and data centres to cloud-based solutions hosted by third parties. Cloud adoption is a strategic initiative for organisations, typically aimed at reducing costs, reducing risk and ensuring scalability. An organisation can move to the cloud, either in whole or in part, depending on its needs and its digital strategy.

Cloud service

Cloud service is a general term for a software service which is available over the Internet. Cloud service is a metaphor as it’s often depicted as a cloud in presentations. Previously, pieces of software were sold primarily as local software licenses, but it’s now common business practice to offer cloud services through software renting.

Composable business

Composable Business refers to the design, implementation and development of an enterprise’s digital infrastructure using business-level components (PCBs) that can be replaced according to market needs in a more flexible way than those based on a traditional monolithic architecture. The adoption of a composable business approach is usually aimed at gaining competitive advantage, resilience and adaptability.

Composable commerce

Composable commerce is an approach that selects the best software components and combines them into a customised application, offering functionality familiar from e-commerce. Composable commerce is therefore a set of e-commerce services built according to the principles of composable commerce.

Conversion

Conversion means the completion of a measured action on a web page. A successful conversion can involve subscribing to a newsletter, filling out a contact form or buying a product from an online store. Conversion rate optimization is used to improve the conversion rate, given as a percentage.

CONVERSION Rate Optimisation (CRO)

Conversion rate optimization refers to the editing of a web page with the aim of improving the conversion rate of the page. CRO is usually an inevitable form of business development for consumer online stores, since even the smallest enhancement in the conversion rate has a direct impact on sales.

Customer Experience (CX)

Customer experience is the sum of encounters experienced by a customer in various digital and traditional media. In the digital era, the significance of ensuring a positive customer experience is highlighted since the buyer may come across an organization in various contexts. Encounters are provided by web pages, newspapers, radio, television and social media channels, among others. An organization should aim at providing a consistent customer experience through these encounters, to ensure the desired outcome (for example, a purchase or a recommendation).

Data economy

Data economy refers to the utilization of digital data in commercial transactions.

Digital Heart™

The Digital Heart™ is a combination of several software products and customized systems integrated tightly together through modern API:s enabling and supporting the core business of the company. The Digital Heart™ is the most important digital system for core the core business processes in a highly digitalized organization.

Without a digital heart, an organization withers or dies, so it is in the core of the organization’s strategy and is actively developed to achieve a defensible competitive advantage in the marketplace. Examples of digital heart companies include Wolt, AirBnB and verkkokauppa.com

Deep technology (deep tech)

Deep technology refers to a startup whose business idea is based on a scientific or otherwise extensive (deep) understanding of technology. The term has been adopted to set certain companies apart from other startups which are also technology driven. A deep tech company may, for instance, base the core of its operations on particularly complex mathematics in the creation of software algorithms. Deep technology companies typically comprise artificial intelligence companies, which try to replicate human thinking, build navigation systems for flying cars and so on.

Digital body language

Digital body language encompasses all the digital activities performed by an individual. Every time a person performs a Google search, visits a web page, opens a newsletter or downloads a guide, they contribute to their digital body language. Digital body language is used in building marketing automation.

Digital business

Digital business (electronic business) is an activity that aims at gaining a competitive edge via (or with the help of) the web. The Internet has become one of the standard operational environments for electronic business, but there are alternatives. Digital business focusses on innovations related to the operational concept and realizes them through modern electronic solutions. On the strategic level, the core of operations is based on digitization, not merely on turning traditional processes electronic. This entire glossary of digital business can be understood as a group of things used to implement digital business strategies. Digital business is often linked to disruption-oriented approaches.

Digital customer experience

Digital customer experience is the sum of encounters experienced by the customer in various digital media. See also Customer experience.

Digital foot print

Digital footprint refers to the presence of a company, an organization or an individual in the digital media. For example, blog marketing aims at growing the digital footprint of a company online.

Digital marketing

Digital marketing means marketing that is carried out in digital media as opposed to so-called traditional marketing which focusses on media such as radio, television and newspapers. Digital marketing comprises all marketing taking place online, e-mail marketing, mobile marketing, keyword advertising, social media marketing and so on.

Digital maturity

Digital maturity describes how holistically and efficiently an organization utilizes digital means in its core business. Improving digital maturity increases a company’s competitive advantage in its market. The Digital Business Maturity Model helps to roughly outline your starting situation, set goals that suit your strategy, and identify the means to raise the digital maturity level to meet those goals. The digital business maturity model also helps to distinguish between easily applicable actions and those that require profound change.

Digital platform

Digital platform is an Internet-based software solution that brings the operators of a certain area together to form one single value network. A digital platform can be figuratively described as the heart of a platform economy operator. The central element of a digital platform is a well-documented and comprehensive API, through which the platform can receive data from or send data to the operators of the value network (or the platform databanks). APIs enable the linking together of several different digital platforms.

Digitization

The term digitization (sometimes also digitalization) has no established definition, but it is characterized by the utilization of modern technologies in a way that fundamentally changes operations and creates significant value. Value networks, customerization, new business models and implementing fast cycle time in product development are some of the typical features of digitization. According to Gartner, digitization is a paradigm change grown out of technology development and the next stage of digital evolution. In digitization, everything is built with the customer in mind. To put it simply, digitization changes our everyday lives.

Digitisation of business

Digitization of business is a process in which a traditional business concept is reconceptualized and then altered to utilize digital means in the core business processes. Digital technologies are no longer in a supporting role; instead, they can be found in the strategic core. The digitization of business involves concepts such as openness, network-like structures, digital business concept, user experience and accelerating change.

Disruption / disruptive innovation

Disruption is a phenomenon in which some innovation that’s based on new technology challenges the traditional operators and operations of an industry. Today, digital business enables disruption more efficiently than ever before. The meaning of disruption is perhaps better explained by the term disruptive innovation, which refers to breaking an established operational model and replacing it with a new one.  Typical examples of disruptive operators include Uber and AirBnB.

Developer experience (DX)

Developer experience is a type of user experience that has been targeted at software professionals, such as software developers. An excellent DX is a central business objective, for instance, for SaaS and platform economy operators.

DevOps

DevOps is an agile operational model for producing electronic services. DevOps focuses on the communication between software developers, maintenance and production personnel. DevOps aims to build an environment in which building, testing and publishing software can happen quickly, often and reliably. DevOps relies on the practices of agile development and tools that automate infrastructure management. DevOps is a particularly central term in modern SaaS software development.

Domain

Domain is an Internet-based home address that identifies an online service. For example, www.sofokus.com is a domain.

Extranet

Extranet is a website or web service for the stakeholders of an organization. Using the Extranet requires logging in, which verifies access rights. Usually an organization offers both an Extranet and an Intranet, the former having less content than the latter.

Google Ads

Google Ads (was Google Adwords) is a tool for keyword advertising within the Google search engine. Google Ads has become something of a standard in online marketing.

Google Tag Manager

Google Tag Manager is a tag management system, which enables the quick and easy analysis of visitor numbers and updates of online and mobile application tags and code strings meant for marketing optimization. Through the Tag Manager interface, it is possible to add and update AdWords, Google Analytics, Firebase analytics, Floodlight and third-party tags and edited tags without having to touch the code of the website.

Google Analytics

Google Analytics is a free analytics tools provided by Google, meant for website visitor tracking. Google Analytics is also used as a tool for enhancing websites’ operationality. Google Analytics is deployed by adding a script to the website.

Growth Hacking

Growth hacking is a term that has no established definition. A growth hacker is a person that uses both traditional and digital marketing tools to achieve measurable results with ease. Building up the user base of a SaaS business is a typical target for growth hacking. A growth hacker can be seen as an expert that shortens the build-measure-learn loop in businesses applying lean/agile principles.

Hackathon

A hackathon is a limited-time event that concentrates intensively on resolving one, usually pre-determined, problem. A typical example would be a weekend-long event, either online or at a physical location, that aims to produce a tentative solution to the organizer’s problem. A hackathon can be related to just about anything, but usually it’s linked to service design, software development, user interface design etc.

Hosting

Hosting means the administration of a server for an online service. Traditionally, hosting has been defined as the provision of physical server space (possible even the server itself) as an outsourcing service. With technical development, hosting has developed toward virtualized cloud solutions. A modern hosting service is located in an environment provided by a big cloud provider.

Inbound marketing

Inbound marketing is a form of marketing that tries to attract its target group by providing it with things it is already interest in, in contrast to traditional interruption, or outbound, marketing. Inbound marketing is a typical methodology for various types of digital content. Examples of inbound marketing include useful guides and blog articles.

Industrial Internet

Industrial Internet refers to the connecting of physical equipment to smart processes, enormous data masses and analytics for the purpose of boosting industrial processes. The term is often used synonymously with the Internet of Things, but the Industrial Internet can be more accurately understood as the “digitization of the industrial sector” and a hyponym for the Internet of Things.

Infrastructure as a Service (IaaS)

Infrastructure as a Service (IaaS) is a form of cloud computing that offers virtualized computing resources over the web. IaaS is one of the three main cloud service models, the other two being Software as a Service (SaaS) and Platform as a Service (PaaS). Examples of IaaS include Amazon Web Services (AWS), Windows Azure, Google Cloud Platform and Rackspace Open Cloud.

Internet of Things (IoT)

Internet of Things or IoT refers to the linking together of physical objects, services, systems, software and even people over the Internet. This network-like entity can be controlled, measured and monitored via the Internet.

Internet marketing

Internet marketing comprises all marketing that takes place on the Internet. The term is related to and can even be considered synonymous to digital marketing.

Intranet

Intranet is a website or web service designed for organization-internal use. Using the Intranet requires logging in, which verifies access rights.

Landing page

A landing page (also called a destination page) is the page to which the visitor is taken once they click an ad within a search engine or on a social media service, for instance. In other words, the landing page is a purposefully designed page to which a user is directed. The design of a landing page involves several best practices, the implementation of which will potentially enhance the conversion rate which began from the advert.

Long tail

Long tail means the varied but low-volume portion of a product range. The Internet has made it possible to make a profit out of selling long-tail products. The concept was introduced by Chris Anderson in 2004.

MACH architecture

MACH architecture refers to a set of technologies that are used to create applications based on, among other things, the principles of composable business or composable commerce. MACH stands for Microservices-based, API-first, Cloud-native and Headless.

Magento

Magento is the world’s leading open-source e-commerce platform.

Mobile first

Mobile first refers to a design method, whereby an online service is designed and built primarily for mobile users and only secondarily for desktop users. This change in paradigm is the result of the enormous increase in mobile devices and mobile use in the 2000s, which forced the rethinking of traditional desktop-centered service design.

MVP (Minimum Viable Product)

Minimum viable product (MVP) is a new product that has the minimum number of features but is able to provide maximum amount of customer feedback. The objective of an MVP is not necessarily to build a new product or even a prototype but a version that can be used to test the so-called market compatibility of a product.MVP doesn’t even need be a working piece of software. It can just as well be a web-format wireframe model or a video as long as it sufficiently well demonstrates how the product operates. However, in online service development MVP is commonly understood as the first published version of a working piece of software.

Network effect

Network effects occur when new users make a network more valuable to other, existing users. When a network reaches a critical point, competing and more limited networks start to lose their significance.

Online / web application

An online application is a piece of software that can be accessed using a browser. Today, a great deal of software is produced as online applications since practically all operating environments include a browser. All social media services are examples of online applications. The production of an online application requires considerably more programming skills than that of a website, which is usually set up on a ready-made content management platform.

Online service

Online service is a general term that describes practically any website entity on the Internet. It can be understood as an umbrella term for a web site, online application and various other types of online service.

Open data

Open data refers to the information acquired by a company, organization or some other instance that hasn’t been refined and that has been made available to the public for use free of charge. Open data is used, for example, in the platform economy as a way of creating broader value networks around an organization.

Open source code

Open source code refers to the software production and development methods that provide a user with an opportunity to familiarize themselves with the source code of a program and to edit it according to their needs. The principles of open source code include the freedom to use the program for any purpose and to copy and distribute the original as well as the edited version. Open source code can be used to refer not only to software development methods but also to the software created and to the developer community. Closed software, whose source code is not published, can be considered the opposite of free software and open source code.

Organic search results

Organic search results are those search engine results that create traffic to a website without advertising. The order in which organic search results are placed is affected by several factors such as location, previous searches and so on. Search engine optimization aims to affect organic search results.

Outbound marketing

Outbound marketing means traditional interruption marketing that utilizes methods such as cold calling. In addition, outbound marketing often refers to traditional mass marketing, in which, say, leaflets are distributed to tens of thousands of households. Digitization has been a game changer in that the power of traditional marketing has waned radically which in turn has forced organizations to adopt inbound marketing tactics to support their sales.

Packaged Business Capability (PBC)

A Packaged Business Capability (PBC) is a set of applications or services developed around a specific business function. A Packaged Business Capability is an collection consisting of services, a data schema and APIs. Packaged business capabilities are the building blocks of an composable business or composable commerce architecture. An example of a PBC is a shopping cart component. 

Permission-based marketing / Inbound marketing

See “Inbound marketing”.

Pivot

Pivot is a term used in the startup world to describe a deliberate major shift in business or strategy. Pivoting is a practical tool for adapting a business agilely to the demands of environmental change. The VUCA world and the transformational demands of digitalisation have shifted the requirement for pivoting capability from early-stage start-ups to all types of organisations. Pivoting has been joined by a new term – micropivoting – which means adapting to market movements and the operating environment without changing the entire business strategy. 

Platform as a Service (PaaS)

Platform as a Service (PaaS) refers to the provision of a software platform in the form of a cloud service. In the model, the developer doesn’t need to worry about scalability or the need for more power as the platform automatically takes care of these. Examples of platforms offering PaaS include Microsoft Azure, Google App Engine and Force.com. PaaS is one of the three main cloud service models, the other two being Infrastructure as a Service (IaaS) and Software as a Service (SaaS).

Platform economy

Platform economy is a business model brought about by the development of the Internet. In the platform economy, some entity – such as a company, some other organization or an individual – provides others with a technical platform that is meant to be used for commercial purposes. By exercising platform economy, a company is able to change the value chain logics of their industry. Examples of platform economy operators include spreadshirt.com and Amazon.com.

Portal

Portal is an online service which acts as a gateway to an array of different services. The services are either technically inside the portal or it can be a website that gathers external services to one place (like suomi.fi). In everyday speech, portal is used to refer to practically all kinds of online services.

Product-Led Growth (PLG)

Product-led growth is putting your product at the center of your company. It is a strategy that uses the product as a channel to drive organizational Key Performance Indicators such as sales, engagement, and reach. PLG thus includes the idea of developing a fantastic product, providing a world-class user experience, and adding a viral loop to your product.

Publishing system / content management system (CMS)

Nowadays, a website is nearly always built upon a publishing system. A publishing system, or today perhaps more often a Content Management System or CMS, refers to a product that lets you create a website by focusing on content and navigation rather than programming. The world’s most popular content management system by far is WordPress.

Reservation system

A reservation system is an online service that allows you to make reservations for products. In addition to making a reservation, it’s often possible to buy tickets through the system as well. The ticket booking system of the Finnish railway company VR (vr.fi) provides a typical example.

Responsive design

Responsive design refers to the planning of an adaptive online service, in which the appearance of the service is designed to be responsive. A responsive online service uses one code from one web address to cater for the various devices a user has (desktop, tablet, smart phone, regular cell phone), but displays the content differently depending on the screen size.

Retargeting / Remarketing

Retargeting or remarketing is a digital marketing method in which a web page visitor can be shown desired ads as they visit other sites. Remarketing is used, for instance, to guide a visitor through the conversion funnel and to increase brand awareness.

SEARCH Engine Marketing (SEM)

Search engine marketing is buying advertising space from search engines. Billing is done according to how may clicks the ad gets. Google AdWords is an example of a search engine advertising tool within Google’s search engines.

Search Engine Optimisation (SEO)

Search Engine Optimization (SEO) is a process that aims at directing desired traffic to a particular website. Essentially, the aim of SEO is to make pages more visible in the organic search results of search engines (such as Google).

Service Design

Service design means the innovation, development and planning of services using customer-centric design methods. The central goal of service design is to plan a service experience in such a way that the service meets both the needs of the users and the business objectives of the service provider.

Sharing Economy

Sharing economy refers to a business model in which a company, some other organization of a private individual shares a resource they own to others in return for compensation. The sharing economy is based on the idea that sharing a resource that someone owns wide enough minimizes the unit cost but still manages to create a commercially viable business. An example of the sharing economy is AirBnB, which allows people to rent out their own apartments.

Social media

The term social media is used in reference to online services based on social networking. These include, for instance, Facebook, Twitter, Instagram and Pinterest. Community-driven online services are based on human interaction and are often some of the most utilized services online.

Software as a Service (SaaS)

Software as a Service (SaaS) is the acquisition of software as a service instead of a local desktop version. The use of SaaS is usually paid on the basis of resources used. SaaS also means that there are no customer-specific environments; instead, only one online application caters for the needs of all customers. SaaS is one of the three main cloud service models, the other two being Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). Liveto is an example of SaaS.

Software Integration

Software integration is the linking together of two separate pieces of software through programming. Software integration is usually one of the typical tools in cases where an existing traditional business is being digitized, for example. In everyday speech, software integration is often shortened to integration.

Software subscription

Software renting is a method of licensing where the customer is given the right to use software over the Internet for a recurring fee, such as a monthly subscription. The software isn’t installed on a local machine but is typically used through an Internet browser, which executes the user’s commands over the web.

SSL encryption protocol

SSL (Secure Sockets Layer) is an encryption method that aims at protecting the connection between two parties over the Internet. The use of SSL has become standard, for example, in online banks and online stores, and now it’s making its way to traditional company websites in the wake of the changes Google made to its search engine.

Tailored online application

Tailored online application is a web app built for a specific purpose according to, for instance, a company’s wishes. A typical tailored online application would be a SaaS created to provide support to business.

User Experience (UX)

User experience (or UX) refers to the comprehensive experience related to the use or consumption of a product or service. Organizations that provide the most addictive, easy and memorable experience have the upper hand.

USER Interface (UI)

User interface (or UI) comprises the view through which a service is used, and the functionalities needed for using the service. A user interface links the user and the computer and creates an operating principle for usage, leading (when done correctly) to a positive user experience.

Web Analytics / Visitor tracking

Web analytics refers to the tracking of website visitors and to the interpretation of their navigation behavior. Web tracking allows an online service to be developed further.

Web browser

Web browser is a program that allows a person to search and use online services on the Internet.

Web page

A web page is a single page on a website.

Website

A website (colloquially web pages or home pages) is a collection of web pages that deal with a particular subject. A website can focus on an individual or an organization. The majority of the Internet consists of websites. Websites have developed from being static calling cards to entities requiring increasingly complex programming skills.

Web store / E-marketplace / Online store

Web store refers to the supply, demand, sales and other commercial transactions of goods and services performed with the help of information technology. A webstore is often understood in terms of being synonymous with B2C commerce, such as gigantti.fi. However, a webstore can also be B2B (e.g. a wholesale ordering system) or C2C (a marketplace for consumers).

WordPress

WordPress is by far the world’s most popular Content Management System (CMS). WordPress’ market share of all online services is around 25% and around 50% when it comes to the market share of content management systems. Originally a blog tool, WordPress has become the foundation of modern websites. There are over 47,000 commercial and free add-ons available for WordPress, making it possible to extend the functionality of a product to, for example, a webstore (WooCommerce add-on).