Digitization is the conversion of analog to digital and a sub-process of digitalization, where digitalization (the process) uses technology (digitization) to optimize the entire value chain and digital transformation is the effect of both that is collectively accelerating the global and societal transformation process. Meagan Eccleston Content Marketing Specialist . Digitization, digitalization, and digital transformation – all these terms are used to describe the processes in the digital world, however, they describe completely different aspects of it. While Digitization initiates the journey, Digitalization accelerates the business systems and makes it easier to access information. “The acquisition of digital skills has now become a prerequisite for individual, industry, and regional success.”. Digital transformation, in contrast, is not something that enterprises can implement as projects. Automation, as the term suggests, is the automatic execution of tasks without periodic interference.Whereas, Digitalization is the conversion of analog information into texts, photographs, and voices, among others. The vast majority of traditional enterprises will have digitized their information by now. Digitization, Digitalization, and Digital Transformation The 3 D's are often considered to be a similar concept and the fact is, there are not. Mr. Bloomberg is the author or coauthor of four books, including The Agile Architecture Revolution (Wiley, 2013). Is your company following a true digital transformation strategy? Digitalization vs. Digital Transformation – What’s the Difference? Although the two words may sound similar, there is a notable difference in digitization versus digitalization – and that ambiguity has created uncertainty even among IT … Digitization, digitalization, and digital transformation are all terms that have been very prominent since the late 2000s. Digitization vs. digitalization vs. digital adoption. At Digital Business, we talk about digitalizing business units, business models and entire companies. Gartner’s definition is thus quite different from the academics’, focusing on changing business models rather than social interactions. Transformation is indeed bigger, broader, bolder than either digitization or digitalization — it builds on those things but neither replaces them nor is a substitution for them. "Digitization" vs "Digitalization" vs "Digital Transformation" Leer en Español. The meaning of digitalization is less clear-cut, though many sources agree on the fundamental premise: digitalization revolves around using technology to innovate and redefine products and services. This connection becomes obvious when one looks at the elements of a successful digital transformation. An organization might undertake a series of digitalization projects, ranging from automating processes to retraining workers to use computers. Once you understand what digitization is vs. digitalization and how they fit into your larger roadmap for digital HR, you can set more accurate KPIs for transformation. Digital transformation is therefore nothing more than solving problems with the best possible technical means. Automation is a major part of the digitalization story, whether it be shifting work roles or transforming business processes generally. This is not merely a matter of wordplay — it’s a matter of scope and potential value to your business. Published on December 28, 2018 December 28, 2018 • 3,565 Likes • 121 Comments Jason Bloomberg is a leading IT industry analyst, Forbes contributor, keynote speaker, and globally recognized expert on multiple disruptive trends in enterprise technology and digital transformation. Digitization vs. digitalization vs. digital adoption. This is digitization. “Digitalization, according to Gartner, Inc., is the process of employing digital technologies and information to transform business operations,” according to the report Digitalization and the American Workforce by Mark Muro, senior fellow; Sifan Liu, data analyst; Jacob Whiton, research assistant; and Siddharth Kulkarni, former research analyst; all from the Brookings Institution. “Digitalization is transforming the world of work,” according to the report. By Jacqueline Prause. As far as Ross Philo, Energistics president and CEO, is concerned, these terms mean much more than simply acquiring more data. It’s a customer centric feedback loop that can adapt on the fly. Digitalization vs digitization, digital transformations and automation are terms that techies frequently confuse. Digitization vs. Digitalization and Why It Matters ... Gartner does a good job differentiating between the two, defining digitization as the move from analog to digital form. Industrial Manufacturing & Industrial Goods. © 2020 Forbes Media LLC. Following digitization and digitalization, digital transformation is the next step in the automation of grey literature management. However, digital technology has also introduced the great debate: Digitalization versus Digitization. Digitization vs. Digitalization. LinkedIn; 3 Minute Read. Digital Transformation is not just about implementing digital technologies or automating into the existing process but modifying the business model in a way to provide more customer value. “Digitalization … increases process efficiency and improves data transparency, and of course, it should help boost your top line,” explain Georg Tacke, CEO, and Annette Ehrhardt, Global Head of Communications & Marketing Senior Director, Let’s dive in deeper to understand the meaning of each. An example of such an automatic process would be as follows: An order is created, the shipping label is created, the invoice is sent and the warehouse is contacted to prepare the shipping. Each one is necessary but not sufficient for the next, and most importantly, digitization and digitalization are essentially about technology, but digital transformation is not. We can see this in the example of the Schindler Group, a Swiss company that also produces escalators and elevators. Digitalization, according to Gartner, Inc., is the process of employing digital technologies and information to transform business operations,” according to the report. In everyday business, digitization can mean digitizing documents such as invoices, archives, products and using them for processing, storing or sharing. Skip to content. Many talk about digital transformation, digitalization or even other terms and synonyms. This is essentially the first step in digital preservation. This is the first part of how businesses can digitize themselves by converting documents and analog content into digital form. As the hype around digital transformation continues to persist, the terms ‘digitization’ and ‘digitalization’ join the fray, increasing the level of hype while adding confusion. Published on December 28, 2018 December 28, 2018 • 3,565 Likes • 121 Comments Summarizing you can say that digital transformation requires digitalization ‘en route’ to digital business (capabilities) and requires digitization, since the glue and a core business asset of digital transformation (and of digitalization) is obviously (digital) data, leading to information, knowledge, intelligence, action and business model changes. You may opt-out by. Digitization vs. Digitalization vs. Digital Transformation. To digitize something is to convert something from an analog into a digital format. Digitalization. Unfortunately, this latter definition is hopelessly vague. Where digitization is about efficiency and productivity, then digitalization is about experience, digital transformation is about invention and reinvention. And, Industry 4.0 is European for the combination of Digital Transformation and Digitalization. In a day to day basis, almost everybody digitizes something, from encoding handwritten notes into Microsoft Word, or scanning hard copies of documents into a PDF format. It’s important to remember, however, that it’s the information you’re digitizing, not the processes – that’s where digitalization comes in. Often the problem is that the new opportunities and challenges as well as the new opportunities are completely forgotten. This involves constantly adapting to new technologies, adapting processes such as the supply chain and ensuring that people can network and exchange information with others. So, when it comes to digitization vs. digitalization vs. digital adoption, they’re all necessary to effect successful digital transformation. MoreThanDigital - Informationen zu Digital Transformation & Digital Business für KMUs. All Rights Reserved, This is a BETA experience. Digital transformation is an evolutionary leap. Such agility will facilitate ongoing digitalization initiatives but should not be confused with them. A digital transformation involves rethinking the company’s value proposition, not just its operations. Gartner Jason Bloomberg is a leading IT industry analyst, Forbes contributor, keynote speaker, and globally recognized expert on multiple disruptive trends in enterprise. Once one has an understanding of these issues, one can also solve them by technical means and use new technologies. “Now we are on the way to digitalization, which is different. März 16, 2020 Digitalisierung, Digitaler Wandel, Digitale Transformation – viele Begriffe sind im Umlauf um die aktuellen Veränderungen zu beschreiben. February 12, 2020. Why Is The Future Of Business About Creating A Shared Value For Everyone? Digitization – Digitization means to transform something from an analog process to a digital process. Digital business transformation is about doing things differently – creating new business designs by using digital technologies in combination to blur the boundary between the physical and the virtual worlds. Digitization, Digitalization, and Digital Transformation Explained Many people have begun to conflate terminology either out of ignorance or for their own benefit, which creates confusion, because suddenly we’re talking about different things but calling them the same. The distinction between digitization vs digitalization can be confusing. His next book, Agile Digital Transformation, is due within the next year. For example, the paper is not simply digitized and then processed, but it is considered, for example, whether the process is still needed or whether it can not be simplified with the help of a new technology. Image credit: leighklotz. Where Is There Still Room For Growth When It Comes To Content Creation? Digital Transformation, Digitization and Digitalization are all steps in the right direction at different times with different outcomes and value. How Is Blackness Represented In Digital Domains? And what has digital transformation got to do with it all? Today, I go into three essential terms and look at them in detail. The Brookings report, in fact, focuses on how digitalization impacts people. The original remains intact. “It is the process of moving to a digital business.”. Digitization, by its essence, refers to the conversion of information like pictures or sounds into ones and zeroes or a digital form that can be stored, processed, and transmitted by computers. A digital company innovates to deliver enhanced products, services, and customer engagement. Jeder baut sich seine eigene Definition und in vielen Fällen bleibt ein nebulöser Schleier. What is Digital Transformation? Many companies only look at the first areas of digitization and try to map only existing processes and business areas with digital tools and processes. Digitalization vs. Digitization. It’s not just about automating or inserting technology into an existing process. “We refer to digitalization as the way in which many domains of social life are restructured around digital communication and media infrastructures.”. Digitalization is also often used as a synonym for automation. As. Whereas, Digitalization is the conversion of analog information into texts, photographs, and voices, among others. It seems, therefore, that Gartner’s definition that ties digitalization to business operations is on point, as such operations consist of business processes that digital technologies can transform. Digitalization vs. Digital Transformation. I would argue, in fact, that failing to distinguish increased digitization (even radically increased digitization) from a digital transformation could be a fatal mistake. What Impact Is Technology Having On Today’s Workforce? Who is also confused by the terms digitization, digitalization, and digital transformation? Digitization vs. Digitalization – Wordplay or World View? For example, image recognition programs can be used to read content from forms and transfer it to the system. Digitalization has led to us having digital content. Serial entrepreneur since he successfully founded his first companies at the age of 13. Reality and misconceptions about the future of artificial intelligence (AI). Let's see how they are different. As organizations implement ‘digital technologies’ – which in this context really means computers and other information technology – people’s jobs change. In fact, it appears that Gartner is not of one mind on its definition of digitalization, as a recent Brookings Institute report quotes an entirely different one. But digital transformation goes the extra mile. How Can AI Support Small Businesses During The Pandemic? The Gartner definition, however, does bring up another question – just what is a ‘digital business.’ “Digital business is the creation of new business designs by blurring the digital and physical worlds,” Gartner’s glossary espouses. How Do Employee Needs Vary From Generation To Generation? Digitization Vs. Digitalization Vs. Digital Transformation - Can you tell the difference? He is ranked #5 on Onalytica’s list of top Digital Transformation influencers for 2018 and #15 on Jax’s list of top DevOps influencers for 2017, the only person to appear on both lists. Hands up! This allows complete processes to be transformed into a single automated workflow. If you’re reading this you are probably up to speed on digitization. These are changing due to digital technologies and digital possibilities. What is the digital world? Download the Video . Digitization essentially refers to taking analog information and encoding it into zeroes and ones so that computers can store, process, and transmit such information. He has always questioned the "status quo" and is committed to innovation, disruption and new ideas. When this process is leveraged to improve business processes, it is called digitalisation. An example of this are the words digitization, digitalization, and digital transformation. Understanding what the terms entail (especially between “digitalization” and “Digital Transformation”) exposes us to concepts that are vital for businesses to stay relevant in this disruptive economy. This question is more than a semantic exercise, however. May 11, 2016 by Jacqueline Prause. Share. Kulkarni is now data science manager at Adobe. Digitization is the conversion of analog to digital and a sub-process of digitalization, where digitalization (the process) uses technology (digitization) to optimize the entire value chain and digital transformation is the effect of both that is collectively accelerating the global and societal transformation process. Digitization, digitalization, and digital transformation – all these terms are used to describe the processes in the digital world, however, they describe completely different aspects of it. The problem is that even the providers often make an unclear definition of the terms and it degenerates into a buzzword, which is simply misused for marketing. The results of this process are called digital transformation. If you’re ... A Structural Approach Towards Digital Transformation. It is not the process of converting a businesses’ files from paper to digital format. As technology advances and industry dynamics evolve, more and more maritime businesses are focusing their time, energy, and resources on digitalization… It is therefore worthwhile for every manager to understand the serious differences between pure digitalization and digital transformation. In digital transformation, for example, solutions are sought or problems reopened that are solved with the help of technology. Companies often already use the term digitization when they digitize and automate their processes. Digitization vs. Digitalization and Why It Matters Harnessing the Potential of Digital Technologies in the Maritime Ecosystem. Digital transformation. Generally, 3Ds (Digitization, Digitalization, and Digital Transformation) are used interchangeably which creates confusion. Of course, digital content, digital processes and a digital business model are needed, but digital transformation looks at all aspects of business. Digital transformation is about the customer. “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities,” according to Gartner’s glossary. Digitization vs Digitalization vs Digital Transformation – Quick Difference Kulkarni is now data science manager at Adobe. Digitization, digitalization, and digital transformation are all terms that have been very prominent since the late 2000s. Beide Begriffe drehen sich zwar „irgendwie“ um die digitale Welt, beschreiben jedoch völlig unterschiedliche Aspekte der digitalen … ... Digital transformation is a word that describes the process of utilizing digital technologies to transform business operations. Digitization is the utilization of digitized device and act of moving from analog to digital, while digitalization uses a digital device and result in more beneficial process and the planned application of technology to achieve to an improved business model; and digital transformation is a continuous process that brings in a new business model and changes the way business is carried out. How Can Tech Companies Become More Human Focused? Digitization Vs. Digitalization Vs. Digital Transformation - Can you tell the difference? What is the difference between Digitization, Digitalization, and Digital Transformation? In the case of digitization and digitalization, two letters make all the difference. also weighs in on this term. Learn differences between tech terms here. An example would be scanning a photograph and having a digital copy on a computer. Digitisation is the process of converting information from a physical format into a digital one. However it looks the same, but they are different. For some, this difference may be marginal or unimportant, but when it comes to companies and their strategies, the terms are very important. This is not merely a matter of wordplay — it’s a matter of scope and potential value to your business. So, when it comes to digitization vs. digitalization vs. digital adoption, they’re all necessary to effect successful digital transformation. The Schindler Group teamed up with Apple and started installing smart … It is important to remember that it is the information you’re digitizing, not the pro… While Digitization initiates the journey, Digitalization accelerates the business systems and makes it easier to access information. Merely inserting digital technologies into the existing process is insufficient to realize the full value of digitalization. According to this definition, digitalization is more about business operations than either social interactions or business models – although clearly all of these notions are interrelated. For instance, instead of measuring outcomes in terms of the hours saved by using recruitment technology, your intended KPI could be to measure the increased ease of hiring or the quality of hire of new recruits. About; Notes from the CEO; Invest; Contact; Menu . When it comes to digital transformation, one also looks at the business areas and their processes, but the understanding goes much further than simply adapting them to the new digital technologies. Digital Transformation is really business transformation enabled by digitalization. I write and consult on digital transformation in the enterprise. Digital transformation refers to the much wider use of digital technologies, implementing it into all areas of your business. We explain to you what it means to digitize something or to implement a digital transformation and why the difference is important for many companies to understand. We'll assume you're ok with this, but you can opt-out if you wish. In reality, people are confusing them in ways that shortchange the power and importance of digital transformation, thus putting the very survival of their organizations in peril. Digitization in itself is only the process of compressing analog media into bits and bytes so that they are available in digital form. People often get confused with the terms digitization, digitalization and digital transformation.They sound similar but in application, they are slightly different. Accept Read More, CEO & Founder of MoreThanDigital. If one were to speak of completely digitizing a company, one would either have to digitize everything or just use robots and intelligent devices with IoT, since everything is digital. Digitalization – Digitalization refers to implementing a manual business process in technology and software. The difference between digitization and digital transformation is greater than you think, but many use it as a synonym. They have been used interchangeably, often for the wrong reasons have potentially not been given the importance they deserve. (Don’t create problems by looking first at tech and then only focusing on a solution for this technology), Digitalization leads to Digital Business, Digital Transformation needs Digital Business and Digitalization. In fact, for many people, digitalization applies primarily to such processes. It is good to have a clear understanding between the three. We can see this in the example of the Schindler Group, a Swiss company that also produces escalators and elevators. But before you run out of hair pulling them out trying to make sense of how they differ from one another, here’s a handy guide to start you off. I have always been confused about where, when and how to use the words digitization, digitalization and digital transformation until I met up with an Associate Professor who explained the technical terms to me. Digitization, Digitalization and Digital Transformation has different meanings. And for that matter, what is a ‘business design’? They have been used interchangeably, often for the wrong reasons have potentially not been given the importance they deserve. “‘Digitization’ and ‘digitalization’ are two conceptual terms that are closely associated and often used interchangeably in a broad range of literature,” explain J. Scott Brennen, Doctoral Candidate in Communication, and Daniel Kreiss, Associate Professor, both at the University of North Carolina School of Media and Journalism. The terms digitization and digital transformation are synonymous for many executives. Digital Transformation: Beyond Digitalization. This is digitization. Brennen and Kreiss thus base their definition of digitalization on social life – in other words, how people interact. Digital transformation goes deeper, creating new strategies and processes which lead to a new and better way of providing value. He is founder and president of Agile Digital Transformation analyst firm Intellyx. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Digital is exciting, thrilling — and a bit unnerving! Digital Transformation, Digitization and Digitalization are all steps in the right direction at different times with different outcomes and value. Learn the difference between digitalization and digitization, with concrete examples of each so you have an idea of what true digital transformation is. The two terms are nearly identical, so it is easy to see why people may confuse them. As such interactions move away from analog technologies (snail mail, telephone calls) to digital ones (email, chat, social media), both work and leisure domains become digitalized. Digitization has a relatively straightforward definition, as we saw above – switching from analog to digital. However, analogue and physically existing products are always digitally reproduced, copied or transmitted. Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. The customer-centric solution is always the start of the digital transformation – not the technology. A successful digital transformation requires digitization, but one should not lose oneself in digitization and thus lose sight of the digital transformation. For example when a bank scans a check to a digital image and stores this image instead of the paper check, the paper check and the manual storage of it has been digitized. Digitization vs Digitalization vs Digital transformation – what is the difference? Amazon’s online shopping service is an example of many digital business processes combined into a seamless shopping and delivery experience. Opinions expressed by Forbes Contributors are their own. Digitization is an important enabler of digital, but all the digitization in the world won’t, on its own, make a business a digital company. Digitization undoubtedly has a place in the maritime world. Firms can leverage the power of digitalization through agile transformation that provides value from day one and is constantly generating and analyzing data, guiding you with a roadmap as you go. In a VUCA world (Volatile, Uncertainly, Complex and Ambiguous), companies are forced to innovate and adapt permanently to remain competitive and succeed. Digitization. Instead, this broader term refers to the customer-driven strategic business transformation that requires cross-cutting organizational change as well as the implementation of digital technologies. Digital transformation initiatives will typically include several digitalization projects, but executives that believe that there is nothing more to digital transformation than digitalization are making a profound strategic mistake. Creating this value requires a complete rethinking about the work itself. Before two decades, business … Digitization. Whether it’s customer needs, innovative new products, market opportunities and challenges, or ultimately the “new economy“. Everything started with digitization. Digitalization refers to enabling or improving processes by leveraging digital technologies and digitized data. By Kushagra Verma. “If you operate an online platform, then your company may already be 80 percent digitalized, and you can gain more efficiency or create more customer value by going the remaining 20 percent of the way.”. But are you ready for digitalization? The vast majority of traditional enterprises will have digitized their information by now. This content can then be processed in digitized processes and new technologies lead to the development of a digital business strategy. These can be films, images and much more. To a certain extent, this also applies to topics such as “agile”, “design thinking”, “brainstorming” and other new ways of working, since these are needed in order to take a differentiated look at the problems. 2. In the enterprise context, digitization is important both for dealing with analog information as well as ‘paper-based’ processes – where ‘paper-based’ is nothing more than a metaphor for analog. There is a common misconception that to digitize something is the same as digital preservation. Before I give you an answer to this question, I need to ask you two more questions: 1. Since you are reading this, chances are that you are familiar with digitization in your private life and job environment. Well, at least I was. API enables digitization, API solution enables digitalization to save costs, and API product enables digital transformation to create new business. Digitalization is transforming the world of work,” according to the report. In reality, digital transformation requires the organization to deal better with change overall, essentially making change a core competency as the enterprise becomes customer-driven end-to-end. Why Should Leaders Stop Obsessing About Platforms And Ecosystems? In actuality, they are both unique terms that identify a particular function or aspect of digital technology. According to the Brookings report, such change is at the heart of digitalization. Digitization vs Digitalization vs Digital transformation – what is the difference? There are many examples of digitization in enterprises today, as there have been for many decades. The technologies underlying digitalization continue to evolve rapidly, even as they are being adopted throughout business and society. The potential of digital skills has now become a prerequisite for individual Industry. Are sought or problems reopened that are solved with the help of.... Leaders of Remote Teams great debate: digitalization versus digitization single automated workflow digital! To such processes ’ s not just its operations reopened that are solved the... Is thus quite different from the last century During the Pandemic by the terms,... Die aktuellen Veränderungen zu beschreiben of Remote Teams machine: digitization technology from the academics ’, focusing changing... 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What you should Know, focusing on changing business models and entire companies he founded... Be confused with them is leveraged to improve business processes, it is easy to why!, images and much more their definition of digitalization competitive advantage you wish digital in. Helps vendors communicate their agility stories business units, business models rather than social.!, including the Agile digital transformation a successful digital transformation strategy being adopted throughout business and society Leaders... Employee Needs Vary from Generation to Generation that to digitize something is process. Or automated in order to save work steps continue to evolve rapidly, even they... Creating new strategies and processes which lead to a digital format status quo '' and is to! Difference between digitization and thus lose sight of the digitalization story, whether be! Easier to access information analog information into texts, photographs, and digital transformation Digitaler... 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