Digitization, digital transformation, and digitalization are terms you may have seen on LinkedIn, company websites, conferences, and articles. Do they mean the same thing? They are buzzwords in some fields.
However, they are very distinct!
The difference between digitization, digitalization and digital transformation
1️⃣ Digitization is the process of changing files or data from analog to digital format, encoding it into zeros and ones for computers to process, keep, and send information. For example, handwritten government documents are turned into digital files.
2️⃣ Digitalization is related to digitization. However, it refers to how many aspects of our lives have been changed around digital communication, e.g., using emails and chat instead of traditional letters. It also includes how businesses move their operations to make room for digital aspects. In this process, businesses create new ways of generating revenue and value.
Examples: Software for automation, data analysis, or CRM. Also, making hotel reservations would have previously required a series of steps and phone calls, but now it is a few clicks away.
3️⃣ Digital transformation cannot be broken down into projects like digitalization can. It’s an umbrella definition that looks at the bigger picture, such as changing overall company operations, structure, and governance.
Examples: Employing IOT (Internet of Things), AI (Artificial Intelligence) and Big Data to completely transform how a company does business.
We digitize data and digitalize processes and operations in a business, and a business undergoes digital transformation. Digitization’s goal is to make information accessible, digitalization looks at efficiency within a company while digital transformation looks at a total overhaul in a company.
What can businesses do to embrace digitization, digitalization and digital transformation?
– Take advantage of digital technologies to manage your data. Digitize your data.
– Find ways to automate and improve efficiency within the business.
– Embrace innovation within your organisation.
– Research new technologies and find out how you can apply them to your business.
Comment your thoughts down below.
Sources used Gartner Glossary, Forbes, SAP, channelinsider
