Digitalization vs. Digital Transformation – What’s the Difference? Digitization Vs. Digitalization Vs. Digital Transformation - Can you tell the difference? This is the first part of how businesses can digitize themselves by converting documents and analog content into digital form. Digitization – Digitization means to transform something from an analog process to a digital process. An organization might undertake a series of digitalization projects, ranging from automating processes to retraining workers to use computers. Since you are reading this, chances are that you are familiar with digitization in your private life and job environment. In the final analysis, therefore, 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. An example of this are the words digitization, digitalization, and digital transformation. Companies often already use the term digitization when they digitize and automate their processes. It is important to understand that digital transformation is never triggered by technology, it is always about solving a problem or providing a new approach to customers. Here Is Some Good Advice For Leaders Of Remote Teams. And what has digital transformation got to do with it all? Simon-Kucher & Partners Digitization vs Digitalization vs Digital transformation – what is the difference? Digital transformation encompasses both digitization and digitalization. The vast majority of traditional enterprises will have digitized their information by now. A kiosk in a restaurant to order and pay for food is an example of a formerly manual process now implanted as a digital service. There are many examples of digitization in enterprises today, as there have been for many decades. March 18, 2020 May 27, 2020 Blogs Leave a comment. Summarizing you can say that digital transformation requires digitalization ‘en route’ to digital business (capabilities) and requires digitization, since the glue and a core business asset of digital transformation (and of digitalization) is obviously (digital) data, leading to information, knowledge, intelligence, action and business model changes. As. This connection becomes obvious when one looks at the elements of a successful digital transformation. In this example, implementing the technology behind such an online platform isn’t the digitalization step per se – it’s shifting the business process to such a platform. Subscribe. But digital transformation goes the extra mile. So, when it comes to digitization vs. digitalization vs. digital adoption, they’re all necessary to effect successful digital transformation. Imagine factory workers putting down their hammers and lathes and instead using computer-controlled equipment, for example. Reality and misconceptions about the future of artificial intelligence (AI). The difference between digitization and digital transformation is greater than you think, but many use it as a synonym. Digital transformation is an evolutionary leap. Digitalization vs. Digital Transformation. Digitization is the conversion of analog to digital and a sub-process of digitalization, where digitalization (the process) uses technology (digitization) to optimize the entire value chain and digital transformation is the effect of both that is collectively accelerating the global and societal transformation process. ... Digital transformation is a word that describes the process of utilizing digital technologies to transform business operations. Digitization is an important enabler of digital, but all the digitization in the world won’t, on its own, make a business a digital company. Unfortunately, this latter definition is hopelessly vague. As far as Ross Philo, Energistics president and CEO, is concerned, these terms mean much more than simply acquiring more data. Digital transformation goes deeper, creating new strategies and processes which lead to a new and better way of providing value. list of top Digital Transformation influencers for 2018. Digitization, digitalization, and digital transformation – all these terms are used to describe the processes in the digital world, however, they describe completely different aspects of it. Mr. Bloomberg is the author or coauthor of four books, including The Agile Architecture Revolution (Wiley, 2013). (Don’t create problems by looking first at tech and then only focusing on a solution for this technology), Digitalization leads to Digital Business, Digital Transformation needs Digital Business and Digitalization. “It is the process of moving to a digital business.”. A keypunch machine: digitization technology from the last century. The Schindler Group teamed up with Apple and started installing smart … These can be films, images and much more. They have been used interchangeably, often for the wrong reasons have potentially not been given the importance they deserve. Who is also confused by the terms digitization, digitalization, and digital transformation? also weighs in on this term. We can see this in the example of the Schindler Group, a Swiss company that also produces escalators and elevators. Thus, existing processes can be digitally mapped or automated in order to save work steps. Digitization, digitalization, and digital transformation – all these terms are used to describe the processes in the digital world, however, they describe completely different aspects of it. LinkedIn; 3 Minute Read. It is good to have a clear understanding between the three. It is therefore worthwhile for every manager to understand the serious differences between pure digitalization and digital transformation. Accept Read More, CEO & Founder of MoreThanDigital. Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. How Is Blackness Represented In Digital Domains? There is a common misconception that to digitize something is the same as digital preservation. However, digital technology has also introduced the great debate: Digitalization versus Digitization. What is customer centricity and what added value does it offer? Kulkarni is now data science manager at Adobe. How Can Tech Companies Become More Human Focused? An example of such an automatic process would be as follows: An order is created, the shipping label is created, the invoice is sent and the warehouse is contacted to prepare the shipping. The overall effect of digitalization across an organization is called digital transformation – more of a process than an outcome. The customer-centric solution is always the start of the digital transformation – not the technology. Is your company following a true digital transformation strategy? Even though digitalization is often misunderstood for digital transformation, these 2 terms are significantly different. So, when it comes to digitization vs. digitalization vs. digital adoption, they’re all necessary to effect successful digital transformation. In reality, these three terms have distinct meanings – or at least, we can make them distinct depending on which authority we’re listening to. Digitization in itself is only the process of compressing analog media into bits and bytes so that they are available in digital form. "Digitization" and "Digitalization", but they have different nuances that we should think about them. Skip to content. When it comes to digital transformation, one also looks at the business areas and their processes, but the understanding goes much further than simply adapting them to the new digital technologies. Digital is exciting, thrilling — and a bit unnerving! “The acquisition of digital skills has now become a prerequisite for individual, industry, and regional success.”, EY & Citi On The Importance Of Resilience And Innovation, How Digital Workflows Helped Save Basketball During The Pandemic, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation With Forbes Insights, Three Things You’ll Need Before Starting A New Business. Digitalization is also often used as a synonym for automation. The original remains intact. That’s for sure because people use those terms as synonyms or mixing them. Digital transformation is an evolutionary leap. The two terms are nearly identical, so it is easy to see why people may confuse them. Digital transformation. You may opt-out by. Digital business transformation is about doing things differently – creating new business designs by using digital technologies in combination to blur the boundary between the physical and the virtual worlds. Learn the difference between digitalization and digitization, with concrete examples of each so you have an idea of what true digital transformation is. His next book, Agile Digital Transformation, is due within the next year. Well, at least I was. A digital company innovates to deliver enhanced products, services, and customer engagement. Generally, 3Ds (Digitization, Digitalization, and Digital Transformation) are used interchangeably which creates confusion. Digitalization: Fraught with Ambiguity and Confusion, Unlike digitization, digitalization doesn’t have a single, clear definition. While Digitization initiates the journey, Digitalization accelerates the business systems and makes it easier to access information. Let’s dive in deeper to understand the meaning of each. 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. Digital transformation initiatives will typically include several digitalization projects, but executives that believe that there is nothing more to digital transformation than digitalization are making a profound strategic mistake. Digitization Vs. Digitalization Vs. Digital Transformation - Can you tell the difference? Digitization vs. Digitalization. Gartner’s definition is thus quite different from the academics’, focusing on changing business models rather than social interactions. Kulkarni is now data science manager at Adobe. The vast majority of traditional enterprises will have digitized their information by now. Is digitization a synonym for digitalization? However, analogue and physically existing products are always digitally reproduced, copied or transmitted. Why Is The Future Of Business About Creating A Shared Value For Everyone? “Now we are on the way to digitalization, which is different. Once you understand what digitization is vs. digitalization and how they fit into your larger roadmap for digital HR, you can set more accurate KPIs for transformation. The Brookings report, in fact, focuses on how digitalization impacts people. I would argue, in fact, that failing to distinguish increased digitization (even radically increased digitization) from a digital transformation could be a fatal mistake. As organizations implement ‘digital technologies’ – which in this context really means computers and other information technology – people’s jobs change. Often the problem is that the new opportunities and challenges as well as the new opportunities are completely forgotten. The terms digitization and digital transformation are synonymous for many executives. ... Digital Transformation Video. For example, image recognition programs can be used to read content from forms and transfer it to the system. May 11, 2016 by Jacqueline Prause. In fact, for many people, digitalization applies primarily to such processes. Digitalization vs. Digitization. How Can AI Support Small Businesses During The Pandemic? It is important to remember that it is the information you’re digitizing, not the pro… Digitization vs. Digitalization – Worum es bei der Digitalisierung wirklich geht. What is the digital world? Although the two words may sound similar, there is a notable difference in digitization versus digitalization – and that ambiguity has created uncertainty even among IT … Brennen and Kreiss thus base their definition of digitalization on social life – in other words, how people interact. Digital Transformation, Digitization and Digitalization are all steps in the right direction at different times with different outcomes and value. Many companies only look at the first areas of digitization and try to map only existing processes and business areas with digital tools and processes. In the enterprise context, digitization is important both for dealing with analog information as well as ‘paper-based’ processes – where ‘paper-based’ is nothing more than a metaphor for analog. In actuality, they are both unique terms that identify a particular function or aspect of digital technology. Digitalization is transforming the world of work,” according to the report. Digitalization vs digitization, digital transformations and automation are terms that techies frequently confuse. While Digitization initiates the journey, Digitalization accelerates the business systems and makes it easier to access information. By Jacqueline Prause. What does it mean to ‘blur’ worlds? Let's see how they are different. The distinction between digitization vs digitalization can be confusing. API enables digitization, API solution enables digitalization to save costs, and API product enables digital transformation to create new business. Digitization, Digitalization, and Digital Transformation The 3 D's are often considered to be a similar concept and the fact is, there are not. This is digitization. “We refer to digitalization as the way in which many domains of social life are restructured around digital communication and media infrastructures.”. Digitization vs Digitalization vs Digital Transformation – Quick Difference Before I give you an answer to this question, I need to ask you two more questions: 1. It’s a customer centric feedback loop that can adapt on the fly. by Andre Stamm | Oct 15, 2018 | Technology. Digitization, by its essence, refers to the conversion of information like pictures or sounds into ones and zeroes or a digital form that can be stored, processed, and transmitted by computers. “‘Digitization’ and ‘digitalization’ are two conceptual terms that are closely associated and often used interchangeably in a broad range of literature,” explain J. Scott Brennen, Doctoral Candidate in Communication, and Daniel Kreiss, Associate Professor, both at the University of North Carolina School of Media and Journalism. I have always been confused about where, when and how to use the words digitization, digitalization and digital transformation until I met up with an Associate Professor who explained the technical terms to me. Digitization has a relatively straightforward definition, as we saw above – switching from analog to digital. He is ranked #5 on Onalytica’s list of top Digital Transformation influencers for 2018 and #15 on Jax’s list of top DevOps influencers for 2017, the only person to appear on both lists. He is founder and president of Agile Digital Transformation analyst firm Intellyx. In the case of digitization and digitalization, two letters make all the difference. What is the difference between Digitization, Digitalization, and Digital Transformation? People often get confused with the terms digitization, digitalization and digital transformation.They sound similar but in application, they are slightly different. Digitization is the conversion of analog to digital and a sub-process of digitalization, where digitalization (the process) uses technology (digitization) to optimize the entire value chain and digital transformation is the effect of both that is collectively accelerating the global and societal transformation process. Digitization, Digitalization and Digital Transformation has different meanings. February 12, 2020. Published on December 28, 2018 December 28, 2018 • 3,565 Likes • 121 Comments Where Is There Still Room For Growth When It Comes To Content Creation? Digital transformation is about the customer. This involves constantly adapting to new technologies, adapting processes such as the supply chain and ensuring that people can network and exchange information with others. Creating this value requires a complete rethinking about the work itself. Following digitization and digitalization, digital transformation is the next step in the automation of grey literature management. Nor is it launching a single initiative to create a new way of processing product complaints through a company’s website, for example. “The acquisition of digital skills has now become a prerequisite for individual, industry, and regional success.”. Transformation is indeed bigger, broader, bolder than either digitization or digitalization — it builds on those things but neither replaces them nor is a substitution for them. Automation is a major part of the digitalization story, whether it be shifting work roles or transforming business processes generally. Jason Bloomberg is a leading IT industry analyst, Forbes contributor, keynote speaker, and globally recognized expert on multiple disruptive trends in enterprise. We can see this in the example of the Schindler Group, a Swiss company that also produces escalators and elevators. In a VUCA world (Volatile, Uncertainly, Complex and Ambiguous), companies are forced to innovate and adapt permanently to remain competitive and succeed. Digital transformation is therefore nothing more than solving problems with the best possible technical means. Today, I go into three essential terms and look at them in detail. This is essentially the first step in digital preservation. We explain to you what it means to digitize something or to implement a digital transformation and why the difference is important for many companies to understand. The Gartner definition, however, does bring up another question – just what is a ‘digital business.’ “Digital business is the creation of new business designs by blurring the digital and physical worlds,” Gartner’s glossary espouses. For example when a bank scans a check to a digital image and stores this image instead of the paper check, the paper check and the manual storage of it has been digitized. Such agility will facilitate ongoing digitalization initiatives but should not be confused with them. März 16, 2020 Digitalisierung, Digitaler Wandel, Digitale Transformation – viele Begriffe sind im Umlauf um die aktuellen Veränderungen zu beschreiben. An example would be scanning a photograph and having a digital copy on a computer. Digital transformation goes deeper, creating new strategies and processes which lead to a new and better way of providing value. “If you operate an online platform, then your company may already be 80 percent digitalized, and you can gain more efficiency or create more customer value by going the remaining 20 percent of the way.”. It seems, therefore, that Gartner’s definition that ties digitalization to business operations is on point, as such operations consist of business processes that digital technologies can transform. Digitization vs. Digitalization vs. Digital Transformation. We'll assume you're ok with this, but you can opt-out if you wish. This content can then be processed in digitized processes and new technologies lead to the development of a digital business strategy. If you take the English definition of Google as “Digital Transformation” you will find “Digital transformation is the profound and accelerating transformation of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way”. Understanding what the terms entail (especially between “digitalization” and “Digital Transformation”) exposes us to concepts that are vital for businesses to stay relevant in this disruptive economy. Digital transformation, in contrast, is not something that enterprises can implement as projects. Download the Video . Digital Transformation is really business transformation enabled by digitalization. Digitization vs. Digitalization and Why It Matters ... Gartner does a good job differentiating between the two, defining digitization as the move from analog to digital form. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. At Digital Business, we talk about digitalizing business units, business models and entire companies. The results of this process are called digital transformation. This is digitization. Digitization essentially refers to taking analog information and encoding it into zeroes and ones so that computers can store, process, and transmit such information. Digitization is the process of converting something that is physical and analogue into something that's virtual and digital. I write and consult on digital transformation in the enterprise. “Digitalization, according to Gartner, Inc., is the process of employing digital technologies and information to transform business operations,” according to the report Digitalization and the American Workforce by Mark Muro, senior fellow; Sifan Liu, data analyst; Jacob Whiton, research assistant; and Siddharth Kulkarni, former research analyst; all from the Brookings Institution. “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities,” according to Gartner’s glossary. © 2020 Forbes Media LLC. And for that matter, what is a ‘business design’? Share. Digital business presents tremendous opportunities for innovation and competitive advantage. Serial entrepreneur since he successfully founded his first companies at the age of 13. Digitization vs. Digitalization – Wordplay or World View? 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