What is the difference between digitization and digitalization

Whereas digitization is the process of making existing data and processes digital, digitalization embraces the ability of digital technology to capture and assess data to make better business decisions and enable new business models. Digitalization is an important step towards digital transformation and has a huge impact on product, service delivery, and people.

It marks a culture shift within an organization, reshaping how value is created and business is conducted. Digital transformation is broader than this; more than applying technology to existing business, it is the capacity to rapidly adapt when required through the intelligent use of technologies and information. To bring it together with the previous terms, it is a wider strategic and continuous mission that relies on the integration of digitized data and digitalized applications.

The overall goal of digital transformation is to increase the productivity and creativity decision making, connectivity, innovation, and augmentation of individuals and organizations. Here, technologies — such as smart devices, cloud and fog computing, big data and analytics, social media and networking, cognitive computing, and artificial intelligence — provide unprecedented access to pools of knowledge and resources, resulting in greater innovation and outcomes.

In addition to radically extending the reach of organizations, digital transformation seeks to take advantage of the possibilities and opportunities afforded by new technologies in a faster, better, and more innovative way. People can download or rent them. Digital transformation is the transformation of business activities, processes, products, and models to fully leverage the opportunities of digital technologies. The main goal is to improve efficiency, manage risk or discover new monetisation opportunities.

Digital transformation is doing things in a new digital way. Reading the data from an online PDF or moving the data from a Google Sheet into an app or system that will analyze the data.

The goal is to provide us with insights to offer new products or improve customer service. This process doesn't need a lot of human interaction because is automated. As a result, it enhances efficiency, reduces costs, and may lead to increased sales.

Streaming movies online. Collecting data from clients to analyze it, preparing individual recommendations, offers, and advertisements. The report " Digital Factories Shaping the future of manufacturing " published in by Pricewaterhouse Coopers describes many great examples of a digital transformation in real life.

One of them is Fujitsu company and its factory in Germany. At the heart of the factory is sophisticated information technology IT driving production and logistics. With its Augsburg showcase factory, Fujitsu is developing and producing computer hardware in Germany at competitive costs.

Extremely fast production to exact customer specification is possible thanks to digital shop floor data management. These range from supporting the supermarket concept through the permanent optimisation of the transportation and warehousing structures all the way to customer-specific digital labels.

Shortly, digitalisation is about applying technology into the existing business. Digital transformation means doing things in a new, digital way. Digital transformation is a broader term than digitalisation. Digitisation and digitalisation are parts of a digital transformation. It leads to an entirely new market, as well as new customer and business realities. John also provides the training of this solution to his employees while readjusting the operation process to fit it best.

John's company has now greatly reduced operating costs and working time. These resources can be used to enter new markets or reinvest in developing other solutions to create new values for the business.

When this process is leveraged to improve business processes, it is called Digitalization. Digitalization and Digital Transformation are similar in the aspect of applying technologies to improve business processes. Said technologies can be as simple as uploading files to a company's intranet or as sophisticated as the Internet of Things IoT , Machine Learning or Big Data Analytics, etc. However, Digitalization and Digital Transformation are different in the human factor and sustainability value.

The human factor: firstly, for Digital Transformation, the operations themselves and the entire workforce from the board to the staff must be "renovated" to become more flexible, more technically proficient.

According to McKinsey, four out of five factors that win companies Digital Transformation lie in the human element: leadership, capability building, empowering workers, communication and all the way to the last, tool technology improvement [ 2 ]. Sustainability value: secondly, Digital Transformation is an endeavor that needs to be thoroughly planned and takes a lot of time years.

Unlike Digitalization, Digital Transformation does not simply require businesses to apply a lot of advanced technologies into their operations nor can be completed in a single project [3]. Therefore, it can be inferred that a Digital Transformation roadmap will include many Digitalization and Digitization projects. In addition, the sustainability of Digital Transformation is expressed in many other factors such as the integration and solidification of technologies, or a customer driven growth mindset to name a few.

If Digitization and Digitalization are deemed the first and second steps. Digital Transformation is the third step in the breakthrough of businesses in the 4. According to Gartner, we can define it as the use of digital technologies to change a business model and provide new revenue and value-producing opportunities. This means that businesses can start to use their digitized data.

Through advanced technologies, businesses will be able to discover the potential of processed digital data and help them achieve their business goals. This includes: improved internal or external business processes, gaining higher effectiveness in various fields, giving employees access to the necessary data, providing better understanding of a target group and delivering a better customer experience. A particularly great example of digitalization is for organizations to migrate their business processes to the Cloud.

Talk of a Cloud-powered future is vast as more and more enterprises move towards remote infrastructure in an attempt to master digitalization. In fact, Gartner predicts that by , over 90 percent of businesses will migrate to the Cloud. With remote working still a dominating factor of , it is essential that businesses are still able to function efficiently as competition is only getting more fierce. With a centralized portal via the Cloud, entire workforces, even globally, are able to collaborate effectively as though they were right next to each other in the workplace.

Digitalization through the Cloud is a worthy step in the right direction as supported by our recent report which revealed that 84 percent of businesses positively evaluate the influence of Cloud for organizations in the long term. Finally, we are introduced to the concept of digital transformation.