Differences Between Digitization And Digital Transformation

Especially in the past year, most companies seem to be talking about just one thing: digital transformation. However, there are differences between digitization and digital transformation. The question is: do we understand which ones?  

Since the outbreak of the coronavirus crisis, it seems clear that processes such as business development in e-commerce or teleworking have accelerated. 

Do You Know The Differences Between Digitization And Digital Transformation?

Scanning a document in the office is not the same as developing a button in a web environment that allows the user to upload a scanned file. In the first case, it uses technology to save physical space, while in the second, it intends to save time and effort. Easy, right? If it’s still not clear the differences between digitization and digital transformation, let’s get started .start from the beginning. 

Digitization

What do we mean by digitization? Generically, we can define it as the process that allows information to be passed from a physical to a digital format. For example, when you transfer all your contacts from a diary to your mobile phone or when you read the latest book by your favorite author in eBook format. It also applies when a company digitizes all its documentation to save office space. 

Digital Transformation

So, what is digital transformation? It is about the changes a company makes in its internal processes to adapt them to its needs and current business reality. For example, tools to automate very labor-intensive functions for a human being, such as manual data collection in a technology company. In this sense, the key is in return on investment: renewing a process may seem expensive at first, but it usually saves work and costs in the long run. 

In short, digitization can be summarized as converting information to a non-physical format. At the same time, digital transformation involves the implementation of processes that update the company’s tools and objectives to a world already digitized. Going back to the initial example, buying a scanner or printer would be part of the digitization of a company. At the same time, creating an Artificial Intelligence capable of reading and filtering dates or numbers in certain scanned documents would be part of the transformation of digital.

Differences Between Digitization And Digital Transformation: How To Know Which One Your Company Needs

However, both are important to the company: having a device capable of scanning physical documents is just as necessary as having a tool capable of using this digitized information to obtain new data. The maximum expression of this information treatment would be “big data”, but… to what extent does a company need to incorporate data analysis into its business strategy? Is it necessary for you to carry out a digital transformation process? Yes or yes? It depends. 

A Business Needs To Digitize If:

It cannot handle large volumes of information ( no files or shelves). Does not organize information properly (like a spreadsheet program ). It doesn’t have tools to do business ( like an email). 

A Company Needs A Digital Transformation If:

It has not adapted to new business models (such as e-commerce).  It does not have processes capable of automating the work (like a chatbot).  It cannot optimize staff time management ( as with video calls ). 

In this sense, we can consider digitization and digital transformation as complementary: without the first, the second would not be possible, and while for some areas, it is necessary to implement more complex processes, for others, it is enough to scan the information. For example, a company may want to digitize its documents so it doesn’t need two entire buildings as a warehouse. In contrast, another needs to exploit the data from this information to develop the business.

Also Read: The Pillars That Support Information Security