1. In the case of digitization and digitalization, two letters make all the difference. This is not merely a matter of wordplay — it’s a matter of scope and potential value to your business. Understanding the distinctions between these two approaches is critical as the digital transformation gains momentum and businesses move toward digital technologies to enhance visibility and eliminate inefficiencies in their operations.
2. Here, we’ll give a straightforward explanation of both digitization and digitalization, offering examples of each. Then we’ll explore why we designed TruQC as a strategy for process digitalization.
DIGITIZATION: CONVERTING DATA TO A DIGITAL FORMAT
1. Digitization describes the pure analog-to-digital conversion of existing data and documents. Think scanning a photograph or converting a paper report to a PDF. The data itself is not changed — it’s simply encoded in a digital format.
2. Digitization can reap efficiency benefits when the digitized data is used to automate processes and enable better accessibility — but digitization does not seek to optimize the processes or data.
DIGITALIZATION: TRANSFORMING YOUR BUSINESS PROCESSES FOR DIGITAL
1. Digitalization is “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.” Digitalization moves beyond digitization, leveraging digital information technology to entirely transform a business’ processes — evaluating, reengineering and reimagining the way you do business.
2. If digitization is a conversion of data and processes, digitalization is a transformation. More than just making existing data digital, digitalization embraces the ability of digital technology to collect data, establish trends and make better business decisions.
3. As SAP points out, you would digitize a document, but you would digitalize a factory. As it pertains to reporting, you would digitize a report — but you would digitalize your organization’s data collection process and workflows.
DIGITAL TRANSFORMATION
1. Digital transformation is the process of streamlining a company’s core operations and customer value propositions using emerging technologies. It’s a comprehensive strategy that requires changes to culture, structure, processes, and governance.
2. Digitalization is sometimes referred to as “digital transformation.” However, digital transformation is a broader concept that encompasses not just the digitalization process but also the organizational change that accompanies it. This transformation is a journey that starts with identifying which processes can be improved or replaced with digital solutions and then implementing those solutions to maximize their impact.
3. Several factors are driving the need for digital transformation. Increasingly, customers expect companies to offer digital solutions such as online ordering and self-service, and they’re quick to take their business elsewhere if they don’t. At the same time, new technologies such as artificial intelligence, big data, robotics, and the Internet of Things create opportunities for companies to improve their operations and better serve their customers. Digital transformation can help companies keep pace with these changes and remain competitive in today’s business environment.
RELEVANCE FOR BUSINESSES
1. Digitization is essential for companies that want to take advantage of digital technologies. Digitizing data makes it more accessible and easier to analyze. This is especially important for organizations that deal with large amounts of data, such as healthcare providers and financial institutions.
2. Digitalization builds on digitization by using digital technologies to improve processes and performance. For example, many enterprises have implemented enterprise resource planning (ERP) systems to streamline their operations — specifically, to manage their inventory, finances, and human resources more efficiently.
3. Digital transformation goes one step further than digitization and digitalization by using digital technologies to create new or fundamentally different business models. For example, Uber and Airbnb created entirely new businesses by leveraging digital technologies.
4. Companies that want to stay ahead of the curve need to understand all three concepts: digitization, digitalization, and digital transformation. By investing in technologies that enable these processes, they can keep their business efficient, agile, and responsive to change.
TRENDS IN DIGITIZATION, DIGITALIZATION & DIGITAL TRANSFORMATION
1. Most enterprises today have digitized their data, other than a few industries, such as the energy and construction sector, where data is often still held in an analog format. As for digitalization, many enterprises have adopted at least some form of it to improve their performance.
2. But few have taken the leap into digital transformation, which requires a comprehensive and strategic approach. Moreover, many enterprises that have gone down this path are struggling with it. According to a recent Boston Consulting Group study that surveyed 950 companies, the transformation success rate in 2021 was only 35%. The reasons for this are varied but include a lack of a clear and integrated strategy, insufficient commitment from leadership, and implementation complexities.
3. Companies that have been most successful in digitization, digitalization, and digital transformation have taken an outside-in view focused on the needs of their customers and ecosystem. So if you’re thinking of embarking on a digital transformation journey for your company, concentrate on creating value for your customers and other stakeholders, not just efficiency for your organization.
Source:
https://www.truqcapp.com/digitization-vs-digitalization-differences-definitions-and-examples/#:~:text=If%20digitization%20is%20a%20conversion,and%20make%20better%20business%20decisions
https://www.channelinsider.com/business-management/digitization-vs-digitalization/#:~:text=While%20digitization%20refers%20to%20the,whereas%20digitalization%20is%20for%20processes.
