There has been a long-standing debate between the meanings and implications of digitization vs digitalization. These two words have often been misunderstood, misinterpreted and used interchangeably, despite being fundamentally different. Although they are closely associated, they are specialized and mean different things. Multiple definitions have been stated, especially for the term ‘Digitalization’, however, the exact meaning of the word and its implications often vary from industry to industry.
In today’s era of digital transformation and new technologies, it is important to understand the difference between these terms and their implications in order to be able to scale your business.
Simply put, digitization is only the of converting analog to digital. Digitalization, on the other hand, is the process of using technologies to change how business is done.
Digitization
Digitization is primarily concerned with information and data, and its mode of delivery. It is the process of converting analog or physical information, such as paper files, documents, pictures, etc, and to a digital format.
The end result of digitization is the generation and presentation of information in a computer-readable format.
Digitization can look like different things based on the field it is used in. For example:
- Scanning paper files to create a digital file (PDF)
- Scanning a physical photograph and converting it to an image
- Converting music from vinyl records to an MP3 format
- Converting VHS recordings to MP4 format
Keeping only physical copies of your work and information poses as a threat. Digitization can help eliminate them. It also offers multiple other benefits such as:
- Reduces the cost of storage and maintenance
- Better backup and recovery
- Easier, faster and more secure access to files
- Eliminate the threat of destruction by natural disasters
- Better security
Digitalization
The primary focus of digitalization is processes. According to Gartner, digitalization, on the other hand, is the process of utilizing digital technologies to change a business model and provide new revenue and value-producing opportunities.
It is the utilization of digitized resources to improve and scale business while creating new or more adapted streams of revenue by integrating digital technology into every aspect of a business. This can be done by offering existing products and services in forms of their digital variants, or by changing the method of adoption, application or utilization of both new and old technologies.
These changes could be reflected in
- Workflows
- Processes
- Marketing
- Communication
- Ways of collecting and presenting data, etc.
With the rapid growth in technology and new digital avenues for businesses to adapt to opening up, it is impossible to think of a future where digital transformation does not occur in a full-fledged fashion. Digitalization can have immediate benefits of a lower operation cost, but there are many other benefits it offers:
- Better collaboration and management
- Enhanced workflows and processes
- Better customer experience and relation
- Improved efficiency and productivity
The Difference:
When it comes to the battle between digitization vs digitalization, it can simply be explained by the following :
Digital processes cannot be implemented in a workplace or a business without digital data and information. Hence, it is argued that digitization is only the first step to digitalization – the end result of which is improved business processes and workflows. Digitization, in a sense, is part of the whole.
The creation of a digital workspace, in addition to eliminating or reducing paper use, also involves the use of digital tools, devices and technologies.
Salumatics’ Professional Services team can help you transform and scale your business. Contact us today to find out what we can do for you.