Difference between Digitization and Digital Transformation

I have seen many businesses saying they have embarked on digital transformation while in reality, they have just digitized some of their processes.

There is confusion over the two terms, Digitization & Digital Transformation.

The two terms are often used interchangeably when their actual meanings are totally different. In fact, they point to two very different ways of responding to disruptive technology.

Let me talk about Digitization: It is doing the same things, differently.

To digitize is to convert analog data into digital form. If you scan physical papers into electronic files, converted typewritten text into a digital form, switched from cassette tapes to MP3 files, or moved from old style camera film to digital photos, then you have digitized your data. It also means automation of manual processes like filling any application form by hand to entering data directly on digital media like iPad or web portal.

We now browse the internet for information, take pictures with our smartphones, and send emails from our laptops. This is digitization.

Digitization has made communication faster and easier and opened up new channels for real-time information. In the industrial sectors, digitization has involved the application of new technologies to existing business models to make them operate better.

Digitization is doing what you have always done, but using technology to make it more efficient. The business model does not change, but operational efficiency is improved.

Now let us talk about Digital Transformation: It is transforming business activity with technology. Becoming digital is a totally different exercise from digitization.

DX is the process of changing existing business models with new digital technologies like APIs, Analytics, Mobility etc.

It goes deeper, creating new strategies and processes which lead to a new and better way of providing value for your customers, doing things faster, easier, and smoother. E.g. moving from snail mail to real-time social media or chatbot.

Businesses can use DX to expand into new markets, offer new products, and appeal to new customers. It is the process of moving to a digital business.

DX also means using the data collected from digitization for actionable insights and then changing the way we do business.

Digital transformation is not a one-time action, but a continuous process. It brings in the new business models and it will change the way business is carried out & it will go a long way in satisfying their end customer, which is the very purpose of being in the business

Sandeep Raut

7th Rank in Global Top 100 Digital Transformation Influencers Delivered speech at India Analytics & Big Data Summit at Bangalore on "How Machine Learning is helping in Digital Transformation" on 4th Feb 2016 Delivered Thought Leadership speech at Unicom - India Analytics & Big Data Summit on "Big Data Analytics disrupting industry" Delivered speech at IIT Mumbai on "Analysing Big data for disruptive innovation" Delivered a keynote speech at Rizvi College of Engineering on "Fraud Detection & Prevention using Analytics" • Director for Digital Transformation in Syntel. • Has more than 29 years of IT Services / Consulting / Off-shoring experience • Over 18 years in Business Intelligence space. • Had helped organizations in establishing the BI-Analytics Services CoEs. • Had spearheaded several marquee accounts and was significantly instrumental in building new business for the practice as well. • Had successfully initiated, mentored & deployed various strategic consulting services & solutions like Digital Transformation, BI Strategy Planning, BI Offshorization, BI Development/Deployment, Campaign Management, Inventory Optimization which resulted into multi-million dollar business. • Had developed & managed Customer relations with Global players across USA, UK & Asia Pacific. Specialties: Digital Transformation, BI & Big Data Analytics Banking and Financial Services, Healthcare LifeSciences, Insurance, Retail Manufacturing - Supply Chain Management

1 Response

  1. Raj Fowler says:

    Good article Sandeep and we need more communications to explain what Digital Transformation is. There is so much mis-interpretation.

    I tried to also share my understanding and I used the Iron Man analogy.

    Would be good to get your views on my article

    https://ciowatercooler.co.uk/a-story-of-devops-episode-10-the-suit-digital-transformation/

    I have also just started to read about AI and ML and it would be great to learn more… Would like to see what you shared in the ML and Digital Transformation speech.

    Raj

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