Over the past few years, many businesses across the globe have embraced digital technology to boost business productivity and improve safety. With the increasing use of technology in industries, digitization and digital transformation have become buzzwords in boardrooms, and the message businesses convey to customers. However, even used interchangeably, there is a difference between digitization and the digital transformation of a business. Using these words properly is crucial to ensure clear communication among the different stakeholders of a company. In this article, we will clarify the difference between the two.
In simple words, digitization refers to the digitization of information. It involves the process of converting non-digital data into digital format. With digitization, the physical format is converted into a format which makes it possible to carry out different functions through the computer systems.
Collecting online McDVoice forms is not digitization. However, if you collect the data through offline mode and then convert it into digital format, you can label this process as digitization. Examples of digitization include scanning paper documents into digital documents like PDFs. It can also include extracting data from paper and typing it out on an Excel sheet.
Digital transformation is a notch higher than digitization. In digital transformation, businesses integrate technology into business operations. There can be different stages of digital transformation. A mature stage of digital transformation is one where almost all the business areas incorporate digital technology to improve their workflow and provide better value to the customers.
Digital transformation involves transforming different processes and activities to utilize digital technology’s potential fully. In a way, it refers to a new way of doing things, the digital way. For example, Dollar General now floods DGCustomerFirst to collect customer feedback. Therefore, it can be referred to as a digital transformation. However, the stage of digital transformation will be decided based on the adoption of technology in different departments and activities of the business.
Digital transformation has massively changed business operations. It helps create new values for the customers and boosts its revenue. Furthermore, digital transformation improves the efficiency of business productivity. It utilizes new technology opportunities to fasten business operations and bring innovation. Additionally, digital transformation makes the business agile, which helps to detect the changes in the consumer and respond and adapt accordingly.
It also shifts the traditional thinking of the business towards an experimental and collaborative operation. In turn, it makes it possible to bring new business solutions. It also enhances the data collection process required for various insights. Companies can also use digital transformation to manage their resources judiciously. Furthermore, it is possible to integrate software, applications and databases through digital transformation. Lastly, it encourages digital culture through improved collaboration. Digital culture is crucial to ensure the sustainable running of businesses.
Digitization and digitalization lay the foundation of the digital transformation of a business. We have already discussed digitization, but what is digitalization? It refers to using digitized data to improve different business processes. To enable digitalization, digitization is a must. Together, digitization and digitalization help bring a digital transformation to a business.
For the digital transformation of a business, it is vital to identify the objects for which you want to incorporate them. It is because digital transformation looks different for every company. So, first, digital transformation’s objective differs from organization to organization. Secondly, it is crucial to focus on the customer’s needs, based on which the businesses should establish a new process.
The fourth step includes the technological selection. Only some of the technology is required for a digital transformation. The technology that a business chooses should optimize the business processes it is trying to change. Adopting a new technology might require business restructuring to make it work. Now is the company’s time to execute the plan and bring digital transformation. The businesses should roll out the program in digestible chunks for easy adoption; however, the execution needs to be constant. Instead of a disruptive change, it will smoothen the execution process.
Lastly, there should always be a space for flexibility. A rigid plan and structure make the implementation onerous. It is crucial to monitor how the business adapts to digital transformation to make the necessary changes. Watch the process unfold, identify the issues, and make adjustments to succeed in the digital transformation.