As we live in a digital world, everyone wants to “digitize” their business. But what does it mean? Digitizing a business: How do you do that? Is the term even correct? Unfortunately, many business executives use the wrong terminology to express their concept of digital transformation. As a result, the terms ‘digital transformation’ and ‘digitization’ are often used interchangeably.
These are the hype words, especially since the pandemic forced all domains to deploy digital transformation frameworks to survive and sustain. But, unfortunately, not everyone uses these terms in the correct context leading to a lot of confusion. So let’s take a detailed look at both times. But, first, let’s make things more transparent and learn to use the terms correctly because words are significant; one must learn to use them in the correct context.
In this guide, we will learn the definitions of digitization and digital transformation. We will also tackle the differences between these conceptual terms that are closely associated yet have a clear distinction between them.
What is Digitization?
At its core, digitization is the process of transforming analogue entities into digital forms. For instance, music from CDs can be digitized into MP3 format. However, in business, this process may look entirely different. Moving a system or business online means converting or transferring all physical or non-digital information into a digital format.
This conversion implies that a computer system can now use the transformed information that allows us to extract, share, or optimize the same. In this sense, digitization means automating existing manual operations into digital format or simply converting paper documents into digital files.
This process helps save many meaningful and vital documents, sensitive files, and even precious art forms from oblivion. In addition, everything in a digital format would also decrease the risk of security. In its essence, digitization is the first step in securing business processes.
What is Digital Transformation?
While digitization is applying technology into existing business processes, digital transformation, on the other hand, is about conducting the business innovatively and digitally. The concept of digital transformation is much broader than digitization as it can refer to anything from IT regeneration to cloud computing. Thus, digital transformation is the process of benefiting from the digital change that happens within a business.
An enormous part of digital transformation is achieved through software development or various digital transformation frameworks. When we can leverage the latest innovation and incorporate it into our business processes, digital transformation occurs. As a result, businesses gain opportunities to evolve and gain a competitive advantage in the market.
Compare and Contrast: Digitization vs. Digital Transformation
In today’s day and age, nomenclature matters because terminologies change as fast as technology does. For this reason, differentiating between digitization and digital transformation is imperative, so misunderstandings of the terms cease to exist. However, for many people, these terms are synonymous.
Digital transformation encompasses all aspects of business where technology adoption paved the way for new markets and business models. However, this conversion or transformation goes beyond simply adapting to new technologies. Instead, it is solving all kinds of issues with best technical practices.
Here, digitization is merely automation of existing information, from an analog to a digital context. In that respect, digitization is a synonym for automation. Therefore, when we hear people say, “our business has gone digital”, most of the time, they mean they have moved from paper to digital and automated workflows and processes. However, people mean the same thing when it comes to digital transformation. This is where the confusions come from!
To make a clear understanding, digital transformation has to be perceived as an enterprise-wide phenomenon. On the contrary, digitization is focused on one aspect of your business, i.e., digitization of documents and processes. It is what you have always done, but you are using technology to make it more efficient this time. Therefore, it can be seen as a one-time process, whereas digital transformation is an ongoing action that brings in new business models, transforming how you conduct business.
Conclusion
Still, confused? Hope not. Always remember digitization is as simple as browsing Google for information or even using your smartphone to take pictures. It has optimized communication and has enhanced operational efficiency. Becoming digital is a different game altogether. It goes deeper by developing new strategies and processes that would help your business expand into new markets. Things get faster, easier, and smoother. An easy recipe for customer satisfaction. So what are you waiting for? Hire digital transformation consulting services and take your business to new heights!
This conversion or transformation goes beyond simply adapting to new technologies.
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