What is Digitalization

Digitalization is the mixing of virtual technologies with cutting-edge progress into everyday lifestyles through the digitization of everything that can be digitized.

For businesses, digitalization is the way toward moving to an advanced business through the use of digital technologies by changing the plan of action, providing new revenue and value-producing opportunities.

According to Gartner, “Digitization is the process of changing from analog to digital form.”

Digitalization is not quite the same as digitization. Through digitalization, an organization's digitized assets (any information about you or created by you that exists in digital form) are changed into new sources of profits, operational advantages, and augmentations.

What is the difference between digitization and digitalization?

Digitization is a process wherein digital versions are created from their respective analogous or physical forms such as paper documents, signals, and location data for various computing requirements. The process doesn’t necessarily have to replace the original source as in the case of digitized paper documents where one can choose to destroy the original document to comply with certain legal requirements. From a business perspective, digitization facilitates automation where business processes and workflows are self-regulated from the digital data at hand. The digitized information can be easily stored since data is stripped of human errors and repetitions, which makes it convenient to manipulate and display data.

Digitalization, on the other hand, refers to improving or transforming business operations, functions, and processes by accessing digital technologies in order to inject innovations and ideas. In the long run —as organizations and businesses are adopting the ‘smart’ approach—the process is essential for them to stay ahead of the curve. It demands reinvention across different enterprise’ facets, right from supply chain to employee skill sets. Digitalization is seen as a roadmap to penetrate into new aspects of the market by making a shift from existing business model towards a digital model of business, which enables the creation of new digital revenue streams.  It helps organizations scale in accordance with growing customer demands as well as the constantly changing economic landscape of the industry.

Digitization and digitalization are largely interchangeable terms at the hub of digital transformation.  As such, there is a very close yet relevant distinction between the two of them. However, the process of digitalization wouldn’t be possible without digitization of existing data.

Aim of digitalization

Enterprises are constantly subjected to new expectations, competitions, and threats in today’s market. They are expected to address and withstand the paradigm shift that is constantly occurring in the business landscape. Businesses that can keep up with the speed of innovation today are ones that are more likely to make profits in their respective sectors and are more likely to live on.

Digitalization impacts several aspects of an enterprise’s activity.  Through analytics and other innovations, it enhances deep understanding of client focus by resolving their pain-points. The analytics machines improve decision making by providing deeper insights into a specific region, customers, and product based on the data accumulated. Majority of enterprises have an online presence, either through social media and applications that respond to customer queries on an almost real-time basis. Digitalization can also be leveraged to augment the operational processes within an organization using technologies such as ERP and CRM. Technology disrupters such as IoT have provided opportunities to businesses to optimize their operations. The nature of work and workplace has witnessed a drastic change in the past decade. Digitalization empowers employees to attain a better quality of work through the evolution of enterprise mobility and cloud computing, which allow employees to communicate with clients digitally from any remote location.

Organizations from various industries continue to experiment and profit from digitalization. Adapting to the change is extremely critical for organizations in order to sustain their existence in today’s cut-throat market.

Definition

The process of converting information (analog) into digital format is called digitalization or commonly known as digitization. Through digitization analog information is organized into discrete data units called bits (multiple data sets are called bytes). Binary data type is used so that computing devices can understand and process it. Digitization has redefined preserving, sharing, and accessing information. Thanks to the digital revolution, today, we have access to relevant information at our fingertips.

Benefits of Digitalization

Digitization brings to the fore a plethora of benefits, from OCR to scanners to audio and video digitalization, it allows systematic organization of data. Some of the key benefits, however are discussed below:

1. Digitization gives multiple users the prerogative to access the same information. For example, one image can be accessed and shared by numerous people.

2. With the advent of mobile technology, IoT, et al, digitization have empowered users to access data anytime, anywhere. This comes in handy, especially for businesses that are operating on global basis and need to access critical information.

3. Digitization has enabled greater integration with business applications. This has significantly improved operational efficiencies of many enterprises.

4. The process of sending hard copies of documents, images, etc. can be very expensive. With digitization, this challenge has been mitigated. Image, document processing has enabled us to share copies of images, documents, and others with anyone at the blink of an eye and that too without incurring much cost.

5. Through digitization, resources can be reused and re-purposed such as large maps or materials stored in magnetic tapes. It is this feature that propelled the growth cloud computing and software-defined data centers.

6. Backing up files has relatively been simplified by digitalization. Unlike paper documents that require scanning or physical duplication to be preserved as back up, digitized records can be stored in disk drives, possibly in an encrypted environment.

All in all, digitization has not only made life easy for general people but also has augmented the productivity of enterprises. It has improved efficiency, reduced manual labor, and added value to businesses.