Digitization vs Digitalization vs Digital Transformation. The concise difference between them.
Why do we need to know this?
Digitization, Digitalization and Digital Transformation each has a different meaning. It is good to have a clear understanding between the 3. Understanding what the terms entails especially between the latter 2 of “digitalization” vs “Digital Transformation” will allow us to understand some concepts for the survival and reign of our enterprise in this fast changing world.
What is Digitization?
Digitization is creating a digital copy of an object. Capturing the object in Bits. Bit is means binary digit, the smallest unit of data in the computer world. A bit has a single value of either 0 or 1. Every digital file e.g. Word Document, PDF, image or music is made up many 1s and 0s. Take for example a handwritten book, if we want to digitize the content of the book, we can scan the pages then use an OCR software (Optical Character Recognition) to convert the text in the scanned images into editable text. Or we can have someone type out the content of the book word for word in a computer word processor. The result is a digital document that we can make identical copies of easily, so we say we have digitized the book. This digital file forms the basic buolding blocks for the next word “Digitalization”.
What is Digitalization?
Digitalization is the process of using digital technology to change existing processes. An example is the use of the Automated Form Routing function on modern Document Management System. Previously a worker had to print out a physical form, fill it up and then send it manually to the first approving party. From there, the form will be manually routed from one approving party to the next by different secretaries until all the required signature are obtained before the staff can proceed with the action. Often times there are follow ups to be done as the form often got overlooked or even went missing. With the Digitalization of this process, online forms are created within the DMS and filled up online. The DMS comes with programmed scripts to check the fields in real-time ensuring that all necessary fields are filled in the right format. After which the system will route the digital form from one approving party to the next up the hierarchy. When the form is stuck longer than a pre-set time frame, the system will follow up with an automated Email prompt. There is also an at-a-glace summary to see all the forms that are in circulation and where the bottlenecks are. We can say that this process has undergone digitalization.
There are some instances where processes might became worse when changed from Analog to Digital. One example would be bad implementation of car air conditioning controls. Simple nobs are replaced with digital controls that requires drivers to navigate deep into the interface just to change air con settings. This posts a danger when the driver is driving. Hence, thoughts should be are given before embarking on each digitalization project. E.g. What is the final outcome of the project and how does it benefit the company or customer? Is the final process flow practical for the actual person on a day to day basis?
What is Digital Transformation?
Now we come to Digital Transformation. Digital Transformation is the change in Business Activity, Model and Competencies in order to leverage on new technology that has became available. One example would be how Digital Marketers tracks conversion in physical stores influenced by online marketing campaign. Platforms such as Facebook and Google are now able to track the behaviour of users who has seen an ad on their platform and then physically visit a store, generating footfall or sale. This is done through Geo Location technologies made possible by smartphones. The prospect do not have to make a purchase or redeem a promotion to be tracked. This has changed how marketers approached marketing and also the allocation of marketing budgets.
Another example of digital transformation would be Document Management System (DMS) vendors putting much more resources in the development of mobile apps for their DMS. Shifting more of their business model and competencies to Mobile. Mobile versions are no longer watered down versions of their desktop version, much thoughts are put into the User Experience & User Interface (UXUI) to anticipate the needs of users. This results in less cluttered app environment, presentation of only the necessary information at different times, visible interface buttons only when users need them and more improvement. The shift in business model and competency is necessary to ensure survival, that they can continue to create products that suits the preference of consumers.
Do check out the example of Pitney Bowes to see more examples of Digital Transformation in action. See the company expand to new business activities to diversify from the sunset mailing industry. The company also reinvented existing mailing services to leverage what new has made possible, helping them deliver better mailing services to customers.
Digital Transformation Series for Singapore Enterprises.
We hope we have helped you with this article. This article is part of the Digital Transformation Singapore series aimed at helping Singapore enterprises. Do check out the article to see the key fundamental steps to practical digital transformation.