Digitalization vs. Digitization: What’s the Difference?
If you read industry publications, you’ve probably already come across the terms digitalization and digitization a couple of times today. But do you know the difference?
It’s easy to confuse the terms. But understanding how they differ will help you gain the most information and understanding of the digital mindset.
What is Digitalization?
According to IGI Global, Digitalization is the “adoption of digital technologies to modify a business model….by exploiting digital network dynamics and the giant digital flow of information.” Digitalization leads to the creation of a digital business which, according to Gartner, is “the creation of new business designs by blurring the digital and physical worlds.” More about this in a minute.
Digitization vs. Digitalization: the Difference
Digitization is where digitalization begins, in the conversion of analog data into a digital form that can be processed by a computer. Digitalization transforms digitized data through the use of digital technologies like automation, computing, coding, AI, or IoT(to name a few) to change how work gets done. And while digitization can optimize and change the process to create a better workflow, reduce costs, or minimize waste, digitalization creates a core change that affects the entire business model.
Now let’s introduce a third term: digital transformation. Digital transformation happens when a business fundamentally changes through the integration of digital technology into its business model in a way that delivers significant value to all of its customers, and perhaps to all of society. The significance of this is obvious: digital transformation is about people and not about the technology itself. Even though it relies on digitization and digitalization, it is only when it creates an effect upon people that it can be called “transformation.”
What are some examples of Digital Businesses?
Some examples of digital businesses are below. Are these examples of digital transformation? Let us know what you think.
- Select UPS stores now offer 3D Printing services
- L’Oreal offers an augmented reality “try on” feature for lipstick and hair color
- Allstate has drones to assess damage after major storm events.
- 3M offers a Bluetooth connected Electronic Stethoscope that can save up to 12 30-second patient soundtracks.
- The City of Montreal has an app available to residents that tracks the city’s snow removal in real-time.
Originally published at https://www.axcontrol.com on June 15, 2020.
