What is Digitalization? | Digitalization vs. Digitization 

What is Digitalization? | Digitalization vs. Digitization 


Modern corporate success has shown to be largely dependent on digitalization. It occurs when a company starts utilising digital technologies to modify its business strategy and offer fresh prospects for creating value. Despite being significantly different, it is frequently confused with digitization or digital transformation. 


In addition, we’d like to emphasise that you don’t need to look any farther if you’re trying to digitally transform your business. We are a firm with more than 8 years of experience in the digitalization of organisations. Anything you require, we can create.


But without further ado, let’s take the leap:

Digitalization: What is it?

According to Gartner, the term “digitalization” describes the use of digital technology to alter a business model and offer new prospects for generating revenue and value.

It encompasses all actions and procedures made possible by digital technologies, to put it simply. Many businesses have experienced success thanks to digitalization in business. Businesses have fully embraced digital technologies, automating everything from order processing to marketing campaigns.

Automation is made possible by company’ increased operational efficiency thanks to digitalization. Due to the lower need on human resources, operating costs are lessened and there are fewer human errors.

Business digitization requires an understanding of the role technology plays across the entire process.

The entire corporate landscape has changed as a result of the shift from traditional analogue to digital technologies. There are no longer any data silos because data is now kept on the cloud rather than on any physical storage devices.

Many businesses were able to outperform their rivals because to cloud computing. Even we utilise cloud databases frequently because they have a significant impact on team performance and cooperation. Data backups are automated and data loss is avoided by employing cloud storage.

We’ll go over a few of the changes brought about by digitization in business so you can acquire a better understanding of the subject overall.

Consumer behaviour in a digital setting

This could be the biggest transformation brought on by digitization. Just keep in mind how you purchased things fifteen years ago. How are you making purchases today?

Two very separate worlds exist here;

According to a report by GE Capital Retail Bank, 81% of shoppers do their research online before going to the store, which lends credence to that assertion. In addition, online shopping is becoming increasingly popular, as we are all aware. Customers are increasingly accessing the web and mobile apps to find any information they may need, whenever they need it, thanks to a full embrace of digital technology.

Customers are increasingly comparing your products and services not just with those of your direct rivals, but also with those of other industries, which may offer even superior goods and services.

Given the experiences customers have with other businesses throughout the world, they have up until now been forcing enterprises to level up their customer experience.

Customers are helping businesses grow to new heights!

Digitalization's effects on knowledge sources

We now have access to innumerable sources of knowledge and skill because to digitalization. Every business needs to be aware of the knowledge that resides outside of the norm. Businesses should learn how to assemble cooperative organisations in a way that promotes the growth and generation of surplus economic value.

It’s crucial to understand how to build relationships with external groups as well as how and when to capture value while taking ownership of and managing process elements. Overall, digitization makes it possible for a wide range of people to collaborate, linking IT and non-IT departments and changing how firms generate value.

Reduced transaction costs are a result of digitization.

Companies now do trials at cheap cost that were previously unthinkable. They can better understand future directions and determine whether they will be cost-effective by setting new goals and testing them in low-risk environments.

Startups are fantastic illustrations of businesses that completely rely on digital technologies. Their business models are built on the premise that their future is unclear. They must test repeatedly if they are to succeed. The agility of the company today will determine its success.

“In the new world, it’s the fast fish that eats the sluggish fish, not the giant fish,” the saying goes.

Benefits of digitization for businesses

We’ve already mentioned how the business landscape has undergone a great deal of innovation thanks to digitalization.

Let’s discuss some specific novelties now, and how they might help your company. You’ll also see how to benefit from those advantages beginning right now:

  1. Improved effectiveness across all operations
  2. Decreased human error
  3. Cloud data storage that is safer
  4. Lower operating expenses
  5. Allows for data analysis

Although we already discussed how all of this affects your company, we can always add a few more details.

Workflows are becoming more efficient as a result of the adoption of digital technologies, and there are also fewer human errors. Thanks to these optimised workflows, all of the operations are carried out more effectively, allowing firms to save operational costs.

As previously said, businesses frequently store their data in cloud databases, and this practise is now accepted. Today, it’s difficult to imagine a large number of businesses not utilising cloud storage. High-security cloud services are provided by industry leaders in cloud computing including 3M, Microsoft, and Google, allowing for reckless digital asset management.

Could you possibly imagine analysing data without the aid of digital technologies, to put it simply?

You can’t, of course.

The very foundation of fundamental data analysis has been cemented by tools like Google Analytics. Of course, there are a tonne of excellent data analysis tools out there, but for the purposes of this example, let’s just utilise Google Analytics.

We wouldn’t even come close to the level of data analysis we have now without digital technologies. It’s so unbelievable almost. But before we do, let’s talk about a few other advantages that digitization offers.

Enhanced online presence

This advantage is undoubtedly the most noticeable one. A company’s visibility is unquestionably increased if it is active on social media, in online retailers, and in business directories. Many businesses hardly have any offline presence at all; their only presence is online.

New communication channels are appearing

The adoption of digital technologies has increased the company’s online visibility and also given rise to new forms of communication.

Examples of these recently developed (well, not exactly recently established) communication channels include emails, smartphone apps, and social media. You even have the chance to put an omnichannel strategy into practise by leveraging the power of digital communication channels!

Although there are more opportunities to grow sales and client loyalty as a result, there are also some new obligations. As the company’s owner, it is your responsibility to maintain all of these lines of communication and, with your staff, to create plans for utilising them.

Keep in mind that quality is more important than quantity. Even with ten automated sales channels that are badly constructed, you could not receive the money you were hoping for. But suppose you had a couple of totally automated, expertly planned sales channels that will bring in more money than you could ever anticipate.

Additional avenues for communication and sales entail more accountability, as we already stated.

Innovation is boosted by digitalization.

Innovations in business are significantly impacted by digitalization. Your ability to act and invent is just forced upon you as technology advances. It’s also difficult to quit once you get going. Your ability to continually innovate will enable you to be more aware of emerging trends and opportunities.

We now know what digitalization is, so let’s look at what it isn’t. Stay with us because the following chapter will likely blow many people’s minds.

Digital transformation is a subset of digitalization.

You’ll quickly get into trouble if you treat digitalization, digitization, and digital transformation equally. These phrases may be related, but there is no doubt that they are distinct from one another.

Let’s examine their differences.

Digitalization vs. Digitization

Simply said, digitization is necessary for digitalization to occur.

Information that has been converted from analogue to digital formats is referred to as digitising. On the other side, digitalization describes the use of digital technologies and data to develop new prospects for the creation of value and to alter how customers and businesses communicate with one another.

While digitalization goes well beyond that, digitization focuses more on internal process optimization, such as task automation and paper reduction.

Digitalization vs. Digital Transformation

Despite the fact that digital transformation and digitalization are sometimes used interchangeably, these concepts are very different.

The phrase “digital transformation” refers to both a change in culture and the much wider usage of digital technologies. More more than digital technologies, it’s about the people. It calls for fundamental organisational changes supported by leadership.

It places a focus on giving employees access to digital tools in order to alter business culture.

You can already tell there is a significant distinction between digital transformation and digitalization.

Why is it crucial to distinguish between these three terms?

If you don’t comprehend these concepts, you could be passing up many chances to acquire a competitive edge and transform your company into a completely digital, agile one.

Many business executives have fallen victim to the fallacy that by digitising their data and business processes, they can digitally revolutionise their company.

If you’re considering serious business expansion, you should be aware of the significant differences between these three phrases.

(e.g) Electronic Banking and Technology

For this sector, it is not necessary to provide a specific example. Look at your phone is all you have to do.

Do you use a banking app? How does it operate online compared to offline? Absolutely.

The most obvious example of digitalization is now found in the world of internet banking. To deposit money into your savings account, you are no longer required to leave the comfort of your home and stand in a never-ending line. or to settle the credit card balance.

Apps for mobile banking are now dependable, safe, and quick. They make managing your money even simpler than going to a real bank. Simply picture a bank without any actual branches to further stimulate your imagination. To be precise, there are lots of them. And they are the ones setting the example and developing an all automated internet banking system. Not many individuals could have ever imagined this happening ten years ago.

See what happens next!

Advertising is becoming more digital

Imagine it this way, even though it might not seem as shocking.

One of the most popular advertising platforms nowadays is the combination of Facebook and Google Ads. Just try to recall how advertising seemed prior to the creation of these two platforms.

Thanks to modern technologies, we can now perform market research and target a particular audience with Facebook and Google Ads, which wasn’t quite available during the heyday of TV advertisements.

“I waste half of the money I spend on advertising, but I don’t know which half.”

Would you concur with John Wanamaker’s position?

If you don’t know who he is, he was a prominent political and commercial figure in nineteenth-century America.

Now, why would disputing this quote in the era of digitization make more sense? Because modern digital technology allows us to measure everything. We can examine each user action on a website or mobile app using tools like Google Analytics.

It is essential to totally digitalize your company. It’s essential. You’re lagging behind if your company isn’t adapting and utilising modern technologies.

You must adopt new technology and use them to study your rivals and clients. Digital transformation should only be considered as the natural next step when digital technologies have been successfully implemented. Additionally, digital transformation will make it possible for retailers to develop successful strategies.

What should be your next move now?

You might be curious about how to truly digitalize your firm after learning that it’s necessary for success in the new digital environment.

We would be more than pleased to assist you if you are a business owner attempting to put your enterprise on the proper track.

We have a great deal of interest in a digital experience platform designed to support business owners like you, when it comes to digitization in business.

Today, a lot of organisations are still powered by WordPress, but fewer still choose to look for a better option. If you want to be successful in the modern economy, it’s imperative that you stay current with new technologies.

You’re contemplating the specific actions you must take to fully digitalize your business, but don’t worry. We’d want to know more about your suggestions and to offer some of our own.

Free advice is always beneficial, right?

You already know what to do if you want to advance and keep up with your rivals. Get in touch with us to discuss how we can take your company to the next level!

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