Digitalization, as we term it today, covers every part of our daily lives in every way. From the news we get every morning in our newsagents to the billing process in our local grocery store, digital technology speeds up and improves activities. Digitalization has become a medium for this new age of transition.

The influence of digital technologies is present in every aspect of our lives and therefore the new era is also called the “digital age” . The digitalization process started about five decades ago with the advent of computing technology and modern electronics. The 21st century represented the beginning of a new technological era that re-formed daily life, accelerated outdated processes and even led to entirely new businesses. Today, digitization can be seen as a transformational tool that stretches beyond our lifestyle to the way we live, communicate and conduct business.

Digitization, digitalization and digital transformation are some terms that are increasingly being used as businesses look to respond to the threat of disruption. Yet, like all the modern buzzwords, not everyone knows what they signify. These words are often used interchangeably, although their specific meanings are entirely distinct. In reality, they point to somewhat different ways to respond to disruptive technology. This makes it important to make a choice between digitization and digitization for the business. Disambiguating these concepts is not just a semantic exercise, but an endeavor to understand the full transformative potential of a digital mindset and strategy.

What Is Digitization?
Let’s start with the most commonly used word, digitization. It is the process of making information available and accessible in a digital format. It is the conversion of existing data and documents from non-digital into a digital representation to be used by computer systems and automate processes or workflows. Here, the data itself is not changed — it’s simply encoded in a digital format. Digitization can reap efficiency benefits when the digitized data is used to automate processes and enable better accessibility — but digitization does not seek to improve the processes or data.

Digitization highlights two important points. Firstly, the role of people. The digitization of processes is done usually with two key stakeholders in mind, the customers and the employees. Without benefits to these people, digitization would be pointless. Secondly, Technology. The role of technology, its selection and implementation in digitization is very important as it is advancing rapidly and some jobs are being replaced due to technology and automation. It is important to remember that in digitization the information is digitized, not the processes – that’s where digitalization comes in.

What Is Digitalization?

This is slightly bigger in perspective. Digitalization moves beyond digitization, leveraging digital data and digital technology to transform business processes, generate revenue, and create a digital culture where digital information is at the core. It converts processes to be more efficient, productive, and profitable by re engineering and re imagining the way the business works and improves how customers and companies engage and interact. It should also be interpreted as the actions that are completed as a result of both digitized and non-digitized information.

Digitalization is not only an application of technology but a strategy or process that goes beyond the implementation of technology to imply a deeper, core change to the entire business model and the evolution of work.

What Is Digital Transformation?
Digital transformation is another word that appears alongside digitization and digitalization. Basically, digital transformation is the impact caused by the process of digitalization. It is the transformation of business activities, processes, products, and models to fully leverage the opportunities of digital technologies. Digital transformation includes all aspects of business, like customer understanding and touch points, growth strategy, enterprise applications, process digitization, worker enablement, performance, new business models, and more. It leads to an entirely new market, as well as new customer and business realities.

In essence, digitization is the process of converting information from an analog to a digital format. If a company uses this process to improve business, create revenue or simplify some operations, then it is called digitalization. But digital transformation goes the extra mile. Of course, digital content, digital processes, and digital business models are important, but digital transformation looks at all aspects of business whether its customer needs, innovative new products, market opportunities and challenges, or ultimately the new economy.

In today’s globalized, digital economy, technology has lowered the entry barriers, meaning anybody anywhere in the world can become a competition to any business. The danger all businesses face is being left behind by more innovative and disruptive competitors. Digitization and digitalization are obviously two key strategies for businesses to stay relevant in the modern era. Truly digital business requires not just the conversion of its processes to digital, but also the transformation of its business operations to take advantage of new technology’s possibilities. The good news is that every organization can be transformed digitally. They simply need to look for ways to leverage or create technologies solving problems or streamlining processes.