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THE DIFFERENCES BETWEEN DIGITIZATION, DIGITALIZATION AND TRANSFORMATION

Digitization is the process of converting information from a physical format to a digital format, Digitalization is the process of leveraging digitization to improve business processes, and Transformation is the transformation of businesses, processes, products and models to take full advantage of the opportunities of digital technology. Let us explain in detail the differences between these terms.

Digitization, Digitalization, Transformation: Why is it important?

Are you interested in Transformation? If yes, then this article is really needed as you will understand the true meaning of those terms and understand what this article is talking about. Digitization, Digitalization, Transformation are often used together. Sometimes, some people even interchange them, but that’s a big mistake. This article will make things clearer and help you understand Transformation processes.

What is Digitization?

What is Digitization?
What is Digitization?

Digitization is the process of converting information from a physical format to a digital format. It means converting something that is not digital into a digital representation that is usable by computer systems and automates processes or workflows. Digitization enables business value creation for businesses that need to work with data. It helps create the foundation for business models that leverage data.

For example:

  • Scan a paper document and save it to your computer’s hard drive as a digital document, such as a PDF.
  • Convert from notes on paper to notes in Excel spreadsheets.
  • Convert from analog VHS tapes to CD, DVD or Blu-Ray discs containing digital data.

What is Digitalization?

Digitization and Digitalization are closely related. They are often used interchangeably, but they are actually two different terms. Digitalization is the process of leveraging digitization to improve business processes. Digitalization means making data digitized information work for you. The term refers to the use of digital technologies and data to generate revenue, improve business operations, and create a digital culture where digital information is at the core. It transforms processes to become more efficient, productive and profitable.

For example:

  • Upload a PDF document from your computer’s hard drive to the cloud/server and share it with multiple people for data analysis;
  • Convert Excel spreadsheet to Google Sheets hosted on cloud/server. The platform provides a structured environment where documents can be shared among multiple users. However, Google Sheets itself requires human interaction for it to be updated regularly;
  • Upload digital movies from CD, DVD or Blu-Ray discs to online services. Anyone can download it at any time.

What is Transformation ?

What is Transformation ?
What is Transformation ?

Digital transformation is the transformation of businesses, processes, products and models to take full advantage of the opportunities of digital technology. The main objective is to improve efficiency, manage risk or discover new earning opportunities. Digital transformation means businesses are doing things in a new (digital) way.

For example:

  • Read data from PDF files online or migrate data from Google Sheets to a data analysis application or system. The purpose is to provide us with insights to launch new products or improve customer service. This process does not require much human interaction as it is already automated. Thus, it improves efficiency, reduces costs and can lead to increased sales;
  • Stream movies online;
  • Collect data from customers to analyze that data, prepare individual recommendations, offers and advertisements.

The report Digital Factories 2020: Shaping the Future of Manufacturing  published by Pricewaterhouse Coopers in 2017 describes many great examples of Digital Transformation in real life.

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