Digitization, Digitalization, and Digital Transformation
Digitization, Digitalization, and Digital Transformation
There is an ever-growing interest for innovative digital technologies, as companies are becoming increasingly aware of their competitive necessity. However, there is still uncertainty about how to leverage these opportunities to design an efficient digital transformation strategy.
Part of this confusion is represented by the misapplication of some key terms related to digital transformation: digitization and digitalization. These three words are often used as synonyms, but they mean very different things.
This is more than a semantic exercise. When people confuse them, they show a lack of understanding of the power and importance of digital transformation: in a world where everything changes so fast, that can put the survival of your organizations at risk.
Industrial IoT (IIoT) refers to the use of devices connected to cloud technologies in industrial settings in order to achieve a new automation layer, improving efficiency and profitability.
Digitization
Digitization is the process of switching from analog to digital form, such as converting music from CDs and vinyl records to MP3s; or transferring paper-based documents to digital files on a computer. The conversion of non-digital things into a digital format allows us to use, process and transmit information within a computer system, which helps optimize processes.
In other words, digitization creates value by cutting costs and time, laying the foundation for business growth. At this point, however, it is still just the information that we are digitizing, not the business processes: that’s something digitalization will deal with.
Digitalization
We cannot have digitalization without digitization.
Digitization is the process of creating a digital copy of non-digital data, while digitalization is the process of leveraging digital information and technology to implement more efficient and effective business models. In a business, if digitization involves the process of converting paper-based documents to digital files, digitalization would entail, for example, the use of cloud-based platforms to reinvent the way how people work together, or the use of analytical tools to generate actionable insights to plan more successful and less risky projects.
Digitalization can be seen as a culture shift within an organization, impacting people, products and services and transforming how business is conducted and value is created. It marks an important step towards digital transformation.
Digital transformation
Here we are to the most used and misused term: a word that most people have heard of or talked about, but whose clear definition is still blurry to many.
Digital transformation is not just switching from analog to digital, nor applying technology to existing businesses: it is a whole new way of living, thinking and interacting. It is a wider continuous and strategic mission that relies on the integration of digitized data and digitalized applications.
It is the ability to adapt to any situation and need thanks to the intelligent use of new technologies; it is the continuous effort to leverage the opportunities offered by digital devices to drive change in any aspect of our business; it is the creation of strategic planning that fully understands how new technologies have changed and will change our society; it is the profound transformation of our life by reshaping activities, processes, competencies, and models.
Digital transformation cannot exist without digitization and digitalization, but it has a much broader meaning that refers to a customer-driven strategic business transformation that completely reshapes and disrupts the way how we have been used to work until now.
We digitize information, we digitalize processes that shape the operations of a business, and we digitally transform the business strategy.
Understanding these key concepts will give you a clearer picture of what are the steps needed to leverage today’s technology opportunities and it will help you create a strategic plan for your organization that will not only boost business growth and competitive advantage, but that will also help you create a better customer experience, reducing the distance between you and your customers, and increasing loyalty and retention.
At Move -X we design innovative technology with that aim: helping companies understand the opportunities that Digital Transformation brings and encouraging them to jump on this train for a better and more connected world with happier customers and organizations.
Learn about our solutions: join the movement!
