Main differences between digitalization and digital transformation

From the invention of the computer, the Internet and everything else – social networks, machine learning, etc. – there are three terms that resonate: digitalization , digitalization of processes and digital transformation . However, these concepts cannot be taken as synonyms, even if they are related.

If you want to know how they differ, simply delve a little deeper into the definition of each of them. Let’s see what this is about.

 

First: what is digitization?

Simply put, digitalization is the passage of information – or of processes – in a physical or analogous way to a digital one . Scanning the files and saving them in a digital folder is scanning. To transfer a song from The Beatles to an MP4 format to play it on an iPod is also to digitize.

 

If that is digitizing, what is process digitalization?

Process digitalization uses digitized technology and information to convert a business model –  its operations, production and even communications or hiring – into a new and improved concept .

For example, reducing the production costs of a factory using sensors to determine what the bottleneck stages are and redesigning them or using CRM software to optimize customer service would be part of the process digitalization.

 

So what is the digital transformation?

It could be said that the digital transformation encompasses the two previous terms. However, it is much more. To transform a business digitally is to go beyond moving from physical information to digital information or using technology in favor of the company.

Rather, it has to do with creating a completely new strategy – digital products, digital sales, among others – globalizing communications and the operation of the company so that its structure is more integrated and to give the user a completely different product, experience or service and digital .

The best example is Amazon, an online store that became much more than that. Now it has a streaming service, its own delivery system, the most innovative return policies in the sector, a new marketing model, digital platforms for programmers, backup systems for companies, etc.

 

Some examples to differentiate digitalization and digital transformation

  • Although installing a CRM digitizes one or several processes of the company, it is not a digital transformationbecause it does not provide a new experience for the client and does not sell a new product
  • If a software company starts selling virtual space – that is, it starts in cloud computing – it is being transformed, because it introduced a completely digital productin its catalog that will represent a new source of revenue. In addition, it is giving its customers the opportunity to use the space in the cloud to improve their ability to respond to certain events and offers them an innovative service that has high demand in the market
  • If an art studio scans the photographs of its exhibition to maintain a virtual inventory, it is digitizing the information. If you include these photographs in an online catalog with relevant data of the artist so that the user knows more about the work before – or during – the visit, he is digitizing a process related to guided tours

But what if, with that same information, the art studio creates a virtual reality tour so that visitors can attend special exhibitions remotely? Or if you launch an application so that the blind can experience a work through sound? Then, this museum – without a doubt – began its process of digital transformation .

 

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