Understanding the difference between digitization, digitalization and digital transformation

Digitization, digitalization and digital transformation: what’s the difference?

In a world where everything is digital and connected, your customers can engage at the touch of a button or voice command. So, to provide value at the pace that people expect, your response as a business needs to be lightning fast. To ensure you’re keeping pace with your customers and the competition, your information must be digitized, your processes digitalized, and your business must be progressing in its digital transformation journey.

But what’s the difference between digitized, digitalized, and digital transformation? Let’s dive in and take a closer look.

What is digitization?

Digitization is the process of converting information into a digital format. For example, switching from manual or handwritten bookkeeping to an online software program. The term digitization is sometimes confused with digitalization (explained in full in the next section of this article), but the two terms have different meanings. Digitization is something that began in the 1980s with the release of IBM’s first personal computer, “Acorn,” and progressed quickly with subsequent advances in business technology and software. Digitalization is a more modern term.

The key distinction between the two terms is that digitization only refers to information itself. Alternatively, when we talk about digitizing processes, that’s digitalization.

What is digitalization?

Digitalization is about “exploring digital technologies to change business processes and workflows to improve business models.”

So that means that your information, once digitized, can be used by the entire organization through digital business tools like data analytics software. Through digitalization, you’re empowering everyone to uncover new opportunities and make better decisions, faster. Critically, you’re also enabling your business to work smarter.

Deloitte explains that digitalization, accelerated by the pandemic, covers three key domains. Together, these domains can help businesses establish more efficient, lower-cost operations:

1. The digital customer: the driver of top-line growth
2. The digital core: improving your operating margin through, for instance, modularized operating models, digitalized core processes, becoming more data driven, and implementing modern IT infrastructure, such as migrating to the cloud
4. The digital work: the link between the digital customer and core, encompassing strategies like Agile and DevOps

Digitizing assets and streamlining business processes with digital technology are both component parts of digital transformation. To succeed in this age of fierce competition, businesses need to be agile and innovative – and this is the core outcome of digital transformation.

What is digital transformation?

Digital transformation (DT) is the extensive transformation of multiple business processes and workflows to get the most from digital technologies and achieve organizational goals. (Unlike digitalization which focuses on improving a few processes with digital technology.)

digitization digitalization digital transformation illustrated

Image courtesy of Medium 

The transformation process does include digitalization efforts. However, DT goes beyond existing business and seeks opportunities to use technology intelligently to adapt rapidly, and implement or adopt new technologies to stay competitive in a modern marketplace. Said otherwise, your transformation strategy requires the right Business Intelligence tools to succeed.

Modern analytics for modern data teams

To ensure a successful journey from digitization to digitalization, and ultimately achieve your enterprise transformation goals, it’s critical to keep a continual focus on the human side of change. Modern data teams are not formed overnight as your stakeholders all have different tolerance for change, and varying experience levels working with data. By providing technology that broadens access to insights, you’ll fast approach your transformation goals.

Astrato is a cloud-native analytics and visualization solution that connects everyone with trusted, up-to-date data. You can ask and answer business questions, (e.g., why was there a dip in sales in June?), and keep these insights flowing through workflows, teams, and the organization, supporting your transformation efforts.

Empower your teams to understand data and make immediate business decisions with Astrato’s creator-centric, no-code solution.  Not only does Astrato do the data heavy-lifting for you, but its intuitive interface is designed for approachability and is easily adoptable by everyone from data scientists to business users.

Support your teams with modern BI that keeps your business connected, and able to adapt faster than the speed of light!

 

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