Digital innovation and platforms are essential to succeed in every business nowadays. Competition is increasing day by day, and sometimes, it is challenging to get exposure. These three(3) terms, Digitization, Digitalization, and Digital Transformation, are often misused. However, it is not difficult to understand the proper context of these technological terms.
This article will explain the following:
- What is Digitization
- What is Digitalization
- What is Digital Transformation
- What is the difference between these 3 terms?
- What does the Future hold?
What is Digitization:
Conversion of analog data into digital form
According to Merriam-webster, “Digitization refers to the process of converting something into digital form”.
Digital representation of physical attributes is Digitization. When people add computer systems to manual work, it is Digitization. Additionally, with computerized systems, one can work efficiently and accurately.
Digitization requires old skills but with the use of new technology. Moreover, it makes business communication quick and effective. For effective time utilization, digitized data and processes are now in practice. For instance, the advancement of technology converts paper documents into electronic files, cassette tapes into mp3 files, and old photographs into mobile photos.
Overall, the formulation is easier to preserve, access, and share data. Digitized content is readily available around the globe. Specifically, data is readily available with the cloud and other online storage options. In addition, Social media platforms such as Facebook, Twitter, Instagram, and LinkedIn also played a significant role in quickly digitizing content. Now digital marketing has the power to manipulate and change businesses.
Example:
- A paper document converts into an electronic device. For instance, hospitals store patients’ records on computer storage instead of recording them on files physically.
- Multiple documents are scanned and saved on devices.
What is Digitalization:
Strategy to enhance the workflow of the business
Digitalization refers to improving the operations of using advance technologies. Generally, it is to increase productivity or efficiency while reducing the cost. It’s all about improving or enabling processes without converting and transforming them. Data remains the same but is available in a better way to access. It resolves traditional problems and creates digital solutions. Moreover, technological changes make the potential insight of the business. The nature of Digitalization is like a journey to drive value and change the workflow of operations.
Innovations drive its value by imposing technologies to enhance the efficiency of the business. Digitalization can also capture more significant consumers because everyone nowadays consumes a brand’s online presence. These strategies stimulate the business’s operations to drive improvement in products or services.
Example:
- Upload movies from CD or DVD to online platforms or cloud storage. So that people can download or easily access them.
- Google Docs is also used by different firms and at the individual level to be shared or accessed by multiple users simultaneously.
What is Digital Transformation:
Recreation of a digital business
Digital Transformation is not a process of a single entity but the transformation of business, model, domain, and cultural practices. The essence of the conversion into a Digital venture is to enable customers and businesses to add value. It is essential to know that it is a long-term strategy to evolve the technological changes.
Digital Transformation also refers to facilitating people. Customers lead to increase operations, procedures, and competencies. When a company learns suitable collaboration with other companies, it starts shifting workflow to digital technology.
In brief, Digital Transformation involves solving problems and creating new opportunities like software, management tools, messaging services, social networks, or marketing software. It also motivates employees to become ambassadors. The transformation is incomplete without employees’ participation in projects. It implements different strategies to capture the changing demands of customers quickly.
Example:
- A restaurant offers an online order with a home delivery option to facilitate customers.
What is the difference between these 3 terms?
As discussed above in detail, Digitization is the conversion of physical information of a business into a digital form. It facilitates storing data on devices instead of paper files. In contrast, Digitalization is the implementation of strategies to enhance the business’s workflow for its improvement. It is the process of improving methods and techniques to gain work efficiency. And the final step is Digital Transformation; it is the transformation of a business into a digital one with the help of advance technologies to maximize the benefits.
- Digitization and Digitalization can be considered as the initial steps towards Digital Transformation.
What does the Future hold?
Digital data is not only the demand of today, but the future also depends on digital innovation and digital information. As wisely said, “Data is the new oil of the Digital Economy.”
We have witnessed that mainly digitally stabled businesses somehow survived during the pandemic. Even the tiny venture tried to transform into a digital one during that time.
Future is in the Digital.
We are seeing a massive change in the approach of business owners. By the example of systems/apps used for daily essentials, we learned that they worked by keeping the future and its demand in mind. They also designed and worked ahead to avail the need of the digital market. For instance, Hunger Station (an Online Food Delivery App) also emerged as one of the most widely used application in Saudi Arabia during and after the pandemic. Now every other big restaurant and food chain worldwide either have or working toward having an online food ordering and delivery system.
We have seen the huge success of such platforms in recent times and how gradually we all settled into this digital transformation. Now for everyday essentials, we are dependent on such apps. For instance, for daily necessities, one can either go to Carrefour but on the other hand, he can order through the Carrefour App/website. The world is moving fast from different Industrial Revolution Stages towards an entirely new era; the 5th Industrial Revolution is the next step in digital and data.
Conclusion:
To conclude, Digitization, Digitalization, and Digital Transformation are critical terms but interconnect at some point. The three words, if used interchangeably, end up in the wrong approach and view. As explained above, each has a different meaning and context. It is essential to understand the importance and the differences between them to avoid ambiguity in communication or study. It is also crucial to properly understand today’s demands and dive into the digital world.
[This article is written by Erum Khaliq during Train the Learner’s 4 weeks Training Program as an Article Writer]
