Digitization vs. Digitalization vs. Digital Transformation
Many talk about digital transformation, digitalization or even other terms and synonyms.
Today, I go into three essential terms and look at them in detail.
There is no digital transformation and no digitalization without digitization (of paper and processes).
Digitization
Digitization is creating a digital (bits and bytes) version of analog/physical things such as paper documents, microfilm images, photographs, sounds and more.
We speak about digitization as well, if you use digital data, extracted from physical carriers, to automate business processes and workflows.
Therefore the digitization of a process is impossible. It is the automation of a process by digitizing information and injecting technology for the purpose of automation.
Digitalization
Digitalization means turning interactions, communications, business functions and business models into (more) digital ones which often boils down to a mix of digital and physical as in omnichannel customer service, integrated marketing or smart manufacturing with a mix of autonomous, semi-autonomous and manual operations.
In general, digitalization is seen as the road of moving towards digital business and digital transformation, as well as the creation of new – digital – revenue streams and offerings while doing so.
Digital Transformation
Digital transformation is the profound and accelerating transformation of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way.
Digital transformation encompasses all aspects of business, regardless of whether it concerns a digital business or not, in times when the acceleration of technology adoption and of change leads to entirely new market, customer and business (people, capabilities, processes, models,…) realities, opportunities and challenges, ultimately leading to a new economy.