November 11, 2023

Digitization, Digitalization and Digital Transformation

With the evolution of technology, the terms, Digitization, Digitilization and Digital Transformation are terms that are often confused. 

In reality, these three terms have distinct meanings – or at least, we can make them distinct depending on which authority we’re listening to.

Let’s get into the details of what these terms mean.

Digitization-Digitalization-and -Digital Transformation

Digitization

Digitization is essentially taking information visually recognized or recorded on paper and converting it into zeros and ones so that computers can store, process and transmit the information.

According to Gartner’s IT Glossary, “Digitization is the process of changing from analog to digital form”.

A typical example of this is when we scan paper documents and convert them into digital files saved on a computer. In other words, digitization is about converting something non-digital into a digital representation or artifact.

The key thing to remember here is that it’s the information you are digitizing, not the process – that’s where Digitalization comes in.

 

Digitalization

Digitalization refers to enabling or improving processes by leveraging digital technologies and digitized data. That means digitalization cannot occur without Digitization. Think of it as a way of taking your old ways of doing things and giving them a digital makeover.

Here again, Gartner weighs in on the term “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities,” according to Gartner’s IT Glossary. It is the process of moving to a digital business.

Referring to our example of converting paper documents to digital files on a computer, a digitalization initiative here could include uploading these files to the cloud to transform collaboration and reporting processes and using analytical tools to generate insights and actionable knowledge to mitigate risk and promote efficiency on future projects.

 

Digital Transformation

Digital Transformation is really business transformation enabled by digitalization. It goes beyond digitizing processes and focuses on reshaping the entire organization. The organization might implement an isolated project as a digitalization effort, but a project that has digital transformation as its goal will create change across all departments.

In reality, digital transformation requires the organization to deal better with change overall, essentially making change a core competency as the enterprise becomes customer-driven end-to-end.

An example of digital transformation that you are likely familiar with is paper records at doctor’s offices. Today, most medical documents are digitized into electronic health records (EHR). This digital transformation process made it easier for patients and providers to access records quickly. It also enhanced scheduling and monitoring capabilities beyond paper and pen.

 

In Conclusion

To sum it up, we digitize information, we digitalize processes and roles that make up the operations of a business, and we digitally transform the business and its strategy. Each one is necessary but not sufficient for the next, and most importantly, digitization and digitalization are essentially about technology, but digital transformation is not. Digital transformation is about the customer.