Explained in simple terms

The key terms from the digital world

From augmented reality to chatbots and SEO: here you will find the most frequently used specialist terms relating to digital transformation explained in simple terms.

Augmented reality (AR)

When furniture outlets allow you to integrate a new sofa into your own virtual living room on the tablet, the distance of a free kick is shown using a line during a football match on TV or when virtual ghosts appear in the real environment displayed on your smartphone when playing Pokémon, this is known as augmented reality (AR). This refers to a computer-based display which enhances the real world with virtual features. With augmented reality, only visual additional information or objects are integrated into the real world on a device in real time. This is in contrast to virtual reality (see “Virtual reality”), which enables users to immerse themselves into a computer-generated illusory world.

Big data

Big data refers to large volumes of data and the related challenges in collecting and processing it. As such data volumes can only be processed to a limited extent with conventional data management tools due to their size, rapidly changing nature and complexity, new methods are required. Big data is the attempt to analytically control the flow of data and to use the results to identify trends or develop strategies.

Blockchain

In simple terms, a blockchain is a decentralized database or a digital log that transparently records transactions. It is a continuously extendable list of data sets (blocks) which are linked together using encryption techniques. Transactions or information stored in a blockchain are forgery-proof and cannot be modified. The technology enables business deals and digital transactions to be carried out without an intermediary, such as securities trading without banks or the purchase of a property without a notary. The internet currency Bitcoin is also based on blockchain.

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Cloud computing

Cloud computing is the provision and use of IT infrastructure, such as storage space, computing power or software, via the Internet. This is based on the principle of making such IT infrastructure available via a computer network so that it doesn’t have to be installed on local computers.

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Digitization vs. digital transformation

During the process of digitization, both analogue and physically available information is processed (e.g. scanned in) and stored on an IT system. This term also describes a process that provides support through IT systems or online platforms and is carried out on an entirely digital basis. In contrast, digital transformation concerns far-reaching change processes which are triggered by the Internet and other new digital technologies. For companies, digital transformation means all change measures needed to remain competitive in the digital age.

Industry 4.0

Industry 4.0 is the completely digitized structuring of the value creation chain. Devices, systems and materials communicate with one another, enabling smooth processes.

Internet of things

The term refers to the connection of objects with the Internet, allowing them to communicate independently via the web and imperceptibly perform tasks for their owner. The range of uses varies from the provision of information, such as via fitness watches, to ordering a new fridge automatically or equipping objects with warning and emergency functions.

Artificial intelligence

Artificial intelligence is an area of IT which aims to transfer certain aspects of the human thought process to computers and to create machines capable of solving problems independently. Artificial intelligence is used in various areas of application – such as self-driving cars, voice recognition systems like Siri or robots deployed in logistics. Experts say its potential is far from exhausted.

Near-field communication (NFC)

Near-field communication is a wireless technology which enables the contactless exchange of data between devices and objects within a range of a few centimetres.

SEO and SEA

In digital marketing it is vital to have a presence on search engines like Google and to be visible to potential customers. Search engine optimization (SEO) and search engine advertising (SEA) are tools used in search engine marketing. SEO signifies all measures used to optimize websites so that they rank higher in search engines under the organic search results, in other words ones not paid for. The key factor in SEO success is not the budget but instead the quality of the content which appears on the actual website. In contrast, SEA refers to paid adverts which are displayed on search engines. The aim is to ensure the company’s adverts are well placed thanks to a mix of good campaigns and the right search terms in order to generate clicks on the company’s own website. In particular, this includes adverts in Google AdWords.

Virtual reality (VR)

Virtual reality is a computer-generated form of reality with (3D) images and, in many cases, sound too. The computer generates an artificial environment in which we are immersed thanks to technical tools like VR glasses. We can explore this environment in all directions and interact with it. In contrast to virtual reality, augmented reality only integrates additional visual information or objects into the real world on a device in real time (see the term “Augmented reality”).

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