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Digitization Digitilazition Digital Transformtio
Quixy Editorial Team
February 28, 2024
Reading Time: 6 minutes

Digitization, digitalization, and digital transformation are all terms that have been very prominent since the late 2000s. They have been used interchangeably, often for the wrong reasons have potentially not been given the importance they deserve.

Have you ever gotten in a conversation where someone is talking about putting their business through the process of digitization? Have you ever considered the three processes’ differences and what they truly mean for a business? While most people are not that clueless, there is a missing link in terms of the direction these terms provide, and we want to sort those out today.

None of these terms exist without one another. All three are somewhat the same since their inception; there have been advances and adjustments in how they are defined over the years.

Let’s explore !!

What is “Digitization”?

Digitization is a conceptual term that holds many associations across a variety of literature. It is the term for creating a digital version of analog things. It is converting physical matter into digital format. For example, paper documents, microfilm images, photographs, and more into bits and bytes that define them.

All in all, it is the simple process of re-representing non-digital data in a digital format that can then be used by the computing system in a variety of ways and for different functions. Thus, in this whole process, nothing of the original document is lost. While in many cases, the original item is destroyed to clear up space, in any case, it lives on in digital forms.

Examples:

  • Scanning bills, documents, and files
  • Transferring meeting minutes and notes from paper into an Excel sheet
Digitization Digitilazition Digital Transformtio

What is Digitalization?

Digitalization in most cases in business refers to improving business processes, business functions, business operations, and more by leveraging the new technology the digital space provides. It allows new systems to be set up in the context of digitalization to make business easier and achieve any/ all benefits the business may have in mind. 

Also Read: Most Mind-Blowing Examples of Digital Transformation

Digitalized businesses can lead to digital businesses and increased scope for business growth. On average, digitalization in this sense of the word is seen as the middle step towards digital transformation and the creation of digital revenue streams.

Digitalization is seen as the middle step between Digitization and Digital Transformation towards the creation of digital revenue streams.

Examples:

  • Moving PDFs and Word documents into a shared cloud
  • Making personal resources with relevant data available to the business
  • Creating online, downloadable video databases

Also read: Digital Modernization a Must. Modernize your Enterprise IT today!

What is Digital Transformation?

Digital transformation is the business-wide process of going digital; it is ahead of the silo-based structure created by digitalization and allows for massive growth potential. It is focused on faster, more efficient, and more pointed digital growth.

Digital transformation marks a radical rethinking of how an organization uses technology, people, and processes to fundamentally change business performance.

George Westerman, MIT principal research scientist and author of Leading Digital: Turning Technology Into Business Transformation

Digitalization and digital transformation are often confused and used interchangeably, however, it is not completely right to do so. Digital transformation in the context of today has a much broader scope than digitalization. It requires many more hurdles to be crossed by a business to create and implement a strategy as compared to digitalization.

Examples:

  • A system analyzing the data from an Excel sheet on your cloud and classifying the data by its importance and relevance
  • Online video streaming
  • Suggesting business changes through computer-analyzed data

Also Read: What are the Components of Digital Transformation?

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Comparison between Digitization, Digitalization, and Digital Transformation

Digitization makes Data Digital, Digitalization Leads to Digital Business, and Digital Transformation requires Digitization and Digitalization

DigitizationDigitalizationDigital Transformation
FocusData ConversionInformation processingKnowledge leveraging
GoalChange analog to digital formatAutomate existing business operations and processesChange the company’s culture, the way it works and thinks
ActivityConvert paper documents, photos, microfilms, LPs, films, and VHS tapes to digital formatCreation of completely digital work processes
Creation of a new digital company or transformation to a digital one
ToolsComputers and conversion/encoding equipmentIT systems and computer applicationsMatrix of new (currently disruptive) digital technologies
ChallengeVolume
Material
Price
Financial
Resistance to change
Human Resource
ExampleScanning paper-based registration formsCompletely electronic registration processEverything electronic, from registration to content delivery

Also read: Digital Transformation Demystified !!

Examples of Digitization, Digitalization, and Digital transformation Across Different Industries

Here are specific examples of digitization, digitalization, and digital transformation across different industries

Healthcare

  • Digitization: Converting patient X-rays, medical records, and other documents into digital formats for easier access and storage.
  • Digitalization: Implementing electronic health records (EHRs) to manage patient data, track appointments, and automate prescription requests.
  • Digital Transformation: Utilizing telemedicine platforms for virtual consultations and remote patient monitoring using wearable devices and sensors.

Education

  • Digitization: Scanning textbooks and other learning materials into digital formats for online access or e-readers.
  • Digitalization: Using online learning platforms with interactive content and personalized learning pathways.
  • Digital Transformation: Creating blended learning models that combine in-person classes with online learning activities and virtual reality (VR) simulations for immersive learning experiences.

Retail

  • Digitization: Implementing barcode scanners at checkout counters to track inventory and manage pricing.
  • Digitalization: Launching online stores and offering mobile apps for browsing, purchasing, and tracking orders.
  • Digital Transformation: Using AI-powered chatbots for personalized customer service, analyzing customer data to offer targeted recommendations, and integrating augmented reality (AR) apps to allow virtual product try-on experiences.

Manufacturing

  • Digitization: Converting machine manuals and production data into digital files for easier access and analysis.
  • Digitalization: Implementing computer-aided design (CAD) and computer-aided manufacturing (CAM) software for product design and automated production processes.
  • Digital Transformation: Utilizing 3D printing for rapid prototyping and small-batch production, integrating AI-powered predictive maintenance to prevent equipment failures, and leveraging digital twins – virtual models of physical assets – to optimize production processes and energy consumption.

Finance

  • Digitization: Scanning paper checks and financial documents for electronic storage and processing.
  • Digitalization: Implementing online banking platforms and mobile apps for account management, bill payments, and investment transactions.
  • Digital Transformation: Utilizing blockchain technology for secure and transparent financial transactions, offering robo-advisors for automated investment management, and using AI-powered fraud detection systems.

Media & Entertainment

  • Digitization: Converting physical media like film and music tapes into digital formats for archiving and online distribution.
  • Digitalization: Implementing streaming platforms for online access to music, movies, and TV shows.
  • Digital Transformation: Using AI-powered recommendation algorithms to personalize content suggestions, creating interactive storytelling experiences through virtual reality (VR) technologies, and utilizing social media for community engagement and content creation.

Transportation

  • Digitization: Implementing electronic ticketing systems for public transportation and toll roads.
  • Digitalization: Offering ride-hailing apps for booking taxis and ridesharing services.
  • Digital Transformation: Developing autonomous vehicles (AVs) for self-driving transportation, utilizing real-time traffic data management systems to optimize traffic flow, and exploring electric and hydrogen vehicle technologies for sustainable transportation solutions.

Logistics & Supply Chain

  • Digitization: Scanning barcodes and product labels for tracking inventory and shipment details.
  • Digitalization: Implementing warehouse management systems (WMS) and transportation management systems (TMS) for automated inventory control and efficient logistics planning.
  • Digital Transformation: Utilizing blockchain technology for transparent supply chain management and tracking of goods, implementing robotic process automation (RPA) in warehouse operations, and leveraging data analytics for demand forecasting and optimizing delivery routes.

Government

  • Digitization: Converting official documents, records, and citizen data into digital formats for secure storage and access.
  • Digitalization: Offering online government services such as e-filing for taxes, permit applications, and online voter registration.
  • Digital Transformation: Utilizing e-governance platforms for citizen engagement and participation, leveraging AI-powered chatbots for citizen service delivery, and implementing data-driven policymaking based on real-time analytics.

These examples demonstrate how digitization, digitalization, and digital transformation can be applied across different industries to improve efficiency, enhance customer experience, and create innovative and sustainable business models.

Conclusion

If you are looking to bring even a little bit of any of these three processes into your business, make sure to consider your options. Quixy offers an easy, no-code approach to digitalization and will help your business on its way to complete successful digital transformation. Today, organizations across verticals are using Quixy to digitally transform how they operate.

Don’t miss out on the chance to elevate your processes. Take the first step and get started with Quixy today. 

Frequently Asked Questions (FAQs)

Q. What is the difference between digitization, digitalization, & digital transformation?

Digitization is the process of converting analog informational data into digital formats. Digitalization, on the other hand, involves the use of digital technologies to improve processes and create new opportunities. Digital transformation is a lot broader concept that encompasses both digitization & digitalization, focusing on organizational and cultural changes driven by digital technologies.

Q. How do digitization, digitalization, and digital transformation relate to each other?

Digitization is the initial step in the process, followed by digitalization, which leverages digital technologies to enhance operations. Digital transformation, however, goes beyond technology adoption and involves fundamental shifts in the organization’s mindset, processes, and business models.

Q. What are the key benefits of digitization? 

Digitization brings benefits such as improved data accessibility, reduced storage costs, and increased operational efficiency. It enables easier search and retrieval of information, facilitates data analysis, and allows for seamless sharing and collaboration.

Q. What challenges can organizations face during the digitization process? 

Organizations may encounter challenges like legacy systems that are not easily digitized, data security concerns, resistance to change from employees, and the need for significant investments in technology infrastructure.

Q. What are the main drivers behind digital transformation initiatives? 

The main drivers include evolving customer expectations, market competition, disruptive technologies, the need for agility and innovation, and the potential for cost savings and revenue growth.

Q. How does digital transformation impact customer experience? 

Digital transformation can significantly enhance customer experience by offering personalized interactions, seamless omnichannel experiences, self-service options, and faster response times. It empowers customers with greater convenience, accessibility, and tailored solutions.

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