Digitization, Digitalization and Digital Transformation: The Differences Explained

September 27, 2021


Digitization, Digitalization, and Digital Transformation are not a matter of just common wordplay. In fact, they have some difference lies in the potential value and scope for a business. A lot of times Digitization, digitalization, and digital transformation are used interchangeably. That’s a mistake. In this article, we will try to explain the differences between them so as to make things clearer.

Understanding Digitization

Digitization can be a process of converting information from a physical format to a digital format. These can be digitizing old physical documents, photographs, or physical articles from newspapers/magazines into digital format. Now, computer systems and automate processes or workflows can use these digitized articles. Digitization enables the creation of business value that requires data. Then, it helps to lay the foundation for business use cases that leverage the data.

Some examples of how digitization happens to include:

  • Scanning physical paper documents and saving them to a laptop/computer (in a PDF, JPG, or TIFF format).
  • Typing physical notes in word doc or excel format to be saved on the computer.
  • Converting old analog VHS cassettes to digital format in CD or DVD.

Understanding Digitalization

Digitalization can be the process of using digitization to strengthen business processes.  Digitalization is the process of making digitized information work for your business’s advantage.  This term is directly related to using digital technologies & digitized data. That improves business intelligence, decision-making, and number crunching. So, these actions will create a digital culture where digital information is at the core of the business process. Through the help of digitalization, your business is able to be more profitable, lean, and productive.

Some examples of how digitization works for businesses:

  • Uploading a pdf document on the company’s server so that the data available in that pdf can be used by other staff members too for analyzing
  • Uploading an excel document on Google sheet so that it can be shared with several users
  • Putting old movies and songs on CD, DVD, Blue-Ray or OTT for people to buy or rent them

Understanding Digital Transformation

Digital transformation is the transformation of business activity, process, business model, or process to fully take advantage of digital technologies. Then, the main aim of digital transformation as a business is to change how you function and deliver value to customers. In short, digital transformation demands an examination and reinvention of various areas within an organization. This process includes from its supply chain and workflow to its employee skill sets and order management. Furthermore, it is also related to its customer interactions and its value to stakeholders.

Some examples of how digital transformation provide value to their users include:

  • OTT platforms stream movies and shows. Based on the data collected of its users/viewers, they are able to recommend TV shows, movies, advertisements, offers, etc. as per the user’s preference.
  • In the Healthcare sector: With the correct privacy protection restraints set up, the subsequent massive increase in healthcare information provides a valuable opportunity for various data and AI experts to create valuable arrangements. This will help diminish dangers of disease and ease consumer uneasiness. Additionally, providing reassurances to assist them.

The above examples show that Digitization and digitalization can be the first steps on a digital transformation journey. Understanding how these concepts are different is vital to creating a viable digital transformation strategy, establishing where your organization currently is in this journey, and harnessing the opportunities brought about by these processes individually. The Digital Age has just begun to change how the business operates. Over time there will be many more examples of digital transformation innovations and new terms for us to learn and understand.

Some benefits of digital transformation

In the present day, for any business the benefits of digital transformation are multifold. Digital transformation, essentially, positions organizations to become agile businesses, setting them up to swiftly detect, respond, and adapt to changes in consumer and employee expectations and demands and the wider business landscape.

However, digital transformation isn’t without its challenges. Change management aside, the technical challenges associated with the implementation and execution of the digital transformation roadmap could be too daunting for most small businesses and even enterprises. To overcome this challenge, TechTiq Solutions offers professional & cost-effective digital solutions in a time-bound manner that enables businesses to better engage their customers as well as employees and grow businesses in this digital era.

Digital transformation impacts not only industry structures and strategic positioning but it affects all levels of an organization (every task, activity, process) and even its extended supply chain. Business leaders must constantly challenge their organizations to ensure this change can increase productivity gains and significant competitive advantage all the while delivering exceptional customer experience in the future as well. Nurturing the important values of care and human empathy during difficult times will ensure that firms retain their digital talent, get things done, and continue to thrive. Finally, companies that show social responsibility and offer solutions to the emerging issues will have an edge over their competition who only strive to maximize their profits and shareholder value.

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