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Difference between Digitization, Digitalization, and Digital Transformation

Digitization:

Digitization refers to conversion of physical copy to digital copy. For instance, we scan a paper document and save it as a digital document (e.g., JPG, PNG, and PDF). In other words, digitization is about converting something non-digital document into a digital document. Computerized systems can then use it for various use cases.

Examples:

  • Going from notes on paper to typing them up in an Excel spreadsheet or word document.
  • Converting from analog VHS cassettes to CD, DVD or Blu-Ray discs containing digital data.
Digitalization:

Digitalization cannot occur without digitization. Digitization is the conversion of analog to digital, whereas digitalization is the use of digital technologies and digitized data to impact how work gets done, transform how customers and companies engage and interact, and create new (digital) revenue streams. Digitization refers to the internal optimization of processes (e.g., work automation, paper minimization) and results in cost reductions. Conversely, digitalization is a strategy or process that goes beyond the implementation of technology to imply a deeper, core change to the entire business model and the evolution of work.

Examples:

  • Uploading a document from a computer’s hard drive to the cloud and sharing it with many people.
  • Converting an Excel spreadsheet to a Google Sheet stored in the cloud & invite team members to work together.
  • Uploading digital movies from CD, DVD or Blu-Ray discs to online services. People can download or rent them.
Digital Transformation:

Although business leaders often use digitalization as an umbrella term for digital transformation, the terms are very different. Digital transformation requires a much broader adoption of digital technology and cultural change. Digital Transformation is the process of changing existing business models with new digital technologies like APIs, Analytics, Mobility, etc. It goes deeper, creating new strategies and processes which lead to a new and better way of providing value for your customers, doing things faster, easier, and smoother. Digital transformation is more about people than it is about digital technology. It requires organizational changes that are customer-centric, backed by leadership, driven by radical challenges to corporate culture, and the leveraging of technologies that empower and enable employees.

Digital transformation is not a one-time action, but a continuous process. It brings in new business models and will change the way business is carried out. It will go a long way towards satisfying the end customer, which is the very purpose of being in business.

Examples:

  • Reading the data from an online PDF or moving the data from a Google Sheet into an app or system that will analyze the data. The goal is to provide us with insights to offer new products or improve customer service. This process doesn’t need a lot of human interaction because is automated. As a result, it enhances efficiency, reduces costs, and may lead to increased sales.
  • Streaming movies online. Collecting data from clients to analyze it, preparing individual recommendations, offers, and advertisements.
  • An example of this is moving from snail mail to real-time social media or chatbots.

Are you interested in digital transformation? If yes, get in touch with us we will help you and your organization in digital transformation process.