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The digital revolution is changing how we live, work, and interact with one another in today’s fast-paced world. Understanding the basic concepts underlying this shift is essential as we move through this digital environment. With that being said, I don’t mean to dive heavily into the topic in written form, however, with this blog post I want to clarify the meanings of the terms digitization, digitalization, and digital transformation while also examining their advantages and disadvantages. I find it important that everyone know the nuanced differences because they are thrown around a lot, whether in the work environment or on social media, by business leaders, politicians and just about anyone else. Hence, I want to break the three of these terms down into simple to understand concepts and will then also provide real life examples of them.

Demystifying Digitization

The process of transforming analog information into a digital representation is referred to as digitization. Period.

It entails the transformation of physical assets, documents, or data into digital representations that are easier to access, search for, and scale. From scanned documents to digital images and audio recordings, digitization has become a ubiquitous practice across various industries. And believe me, albeit being in the so-called digital age, we are still from from having everything optimized in most digital form.

The potential for digitization to improve accessibility, increase efficiency, and streamline operations is enormous. This is one of my areas of expertise. Just think about a library that converts its collection from print books to digital e-books. By digitizing their vast collection, they make it possible for readers all over the world to browse their catalog whenever and wherever they want, free from time or location restrictions. Additionally, digitized information is simple to index and search, saving, in this case, researchers and students a lot of time. I remember in my teens utilizing the library and browsing the Encyclopedia Britannica for information or using the Dewey Decimal system to find the books relevant to whatever topic I was researching.

Then came the libraries first computer which had the Encyclopedia Britannica on a CD, to insert in the CD ROM drive, and you were able to quickly search for information. That was mind blowing in those days.

But digitization also has drawbacks. The long-term accessibility and preservation of digital assets is one of the main issues. Formats quickly become outdated as a result of technological advancement. Without preventative steps, important digital content may disappear or eventually become inaccessible. The digitization process can also be time- and resource-consuming, necessitating substantial expenditures and investments in equipment, training, and infrastructure.

Either way, I am a massive fan of digitization. I really believe that there is so much potential in taking analog processes and transferring them into digital form, optimizing and enhancing them, AND most importantly doing it right. The problem is that the latter part of the statement is rarely fully true. Business and governments cut corners just to get an MVP and then you start creating a mishmash of everything. WIth that being said, I hope that digitization is now clear.

Demystifying Digitalization

Digitalization involves more than just converting analog data to digital form. It entails utilizing digital technologies to modify current workflows, business models, and processes. Digitalization enables organizations to harness the power of data, automation, and connectivity to foster innovation, enhance consumer experiences, and achieve a competitive advantage.

Consider a manufacturing business that adopts digitalization by incorporating internet connectivity and sensors into their machines. This makes data-driven decision-making, predictive maintenance, and real-time monitoring of equipment performance possible. By embracing digitalization, the company can optimize production processes, reduce downtime, and enhance overall operational efficiency.

And yes, digitalization offers numerous advantages, such as increased productivity, cost savings, and improved customer engagement for whoever wants to utilize its power, however, this is the part where my gut instincts don’t always appreciate digital technology in every shape and form. The problem with digitalization is that it also brings up issues with cybersecurity, data privacy, and the possible loss of jobs due to automation.Those three areas are key to me, and should be of massive concern to you. I get that it may be so great to connect your phone to your Google Wallet, I mean what difference does it make to carrying a Mastercard in your wallet/purse? That’s the point. <Just like life is all about balance, so should our digital lives be.

Sweden is such a digitalized nation that oddly, during Covid it didn’t need lock downs? Have you pondered about that?

I am all for digitizing, let’s say our passports – no need to carry a physical copy around, however this poses the question to how is it digitized (as stated above) and how is it implemented (that refers to digitalization). Can it be turned off if you post weird things online? If you are an opposing voice to that government currently in power? All this boils down to cybersecurity, data privacy and automation questions.

I truly believe, as stated before that for businesses and society as a whole, finding the ideal balance between embracing digitization and tackling these issues is essential.

The Power of Digital Transformation

I wanted to include this, because this term is what is thrown around by business leaders in the whackiest of senses. So what does it mean exactly? A holistic and systematic strategy to adapting an organization’s whole business model, culture, and operations to the digital revolution is known as “digital transformation.” It entails a fundamental conceptual shift that embraces technology as a stimulant for creativity, adaptability, and customer-centricity.

Let’s me use the case of a major retailer who starts a digital transformation journey. They use data analytics, artificial intelligence, and machine learning to personalize customer experiences in addition to digitizing their inventory and sales channels. They may then better understand consumer preferences, streamline supply chains, and produce seamless omni-channel experiences that combine online and offline purchasing by utilizing digital technologies.

Digital transformation offers unprecedented opportunities for businesses to reinvent themselves, adapt to changing market dynamics, and stay ahead of the competition. It enables businesses to fully utilize cutting-edge technology, take advantage of data-driven insights, and develop fresh business strategies. Companies can then increase operational efficiency, spur innovation, and provide better customer experiences by adopting digital transformation, and again, this very much depends on how things are digitized and digitalized.

I’m sure you have heard of a few data breaches here or there, or governments imposing digital – such as a bananas system QR code to track who had a vaccine, when, and coerced society into shifting the mindset to use this.

However, digital transformation is not without its challenges. Organizational resistance to change is one of the major challenges – just like getting a society to shift their thinking into using QR codes anywhere and everywhere. Think about that.

Nonetheless in business terms, transforming established processes and cultures requires strong leadership, effective change management, and a clear vision for the future. And I am all for it, when done right. Digital transformation programs frequently necessitate large expenditures for personnel acquisition, technological infrastructure, and upskilling. Without careful planning and execution, organizations risk falling behind and failing to realize the intended benefits of their digital transformation efforts.

Like I mentioned at the very top, let’s dive into examples to make it even clearer. I find that examples always help me understand topics.

Real-Life Examples:

  1. Digitization: The British Library, one of the world’s largest libraries, embarked on a massive digitization project to preserve and make its vast collection accessible to a global audience. Through their online platform, users can explore digitized books, manuscripts, and historical artifacts, transcending the limitations of physical access and time.
  2. Digitalization: The automotive industry has witnessed a significant shift towards digitalization with the advent of electric vehicles (EVs) and autonomous driving. Companies like Tesla have revolutionized the traditional automotive landscape by integrating digital technologies into every aspect of their vehicles, from battery management to software updates, creating a seamless and connected driving experience.
  3. Digital Transformation: Starbucks, a renowned coffeehouse chain, embarked on a digital transformation journey by leveraging technology to enhance customer experiences and drive operational efficiency. Their mobile ordering and payment app allows customers to skip the line and customize their drinks, while data analytics helps Starbucks personalize promotions, optimize inventory management, and create personalized recommendations.

I hope those three examples make it more tangible and understandable.

In Closing

In the era of digitilization, understanding the nuances between digitization, digitalization, and digital transformation is crucial for individuals and organizations alike. Digitalization uses the power of digital technologies to transform processes and workflows, whereas digitization turns analog assets into digital ones. A thorough and deliberate approach to changing corporate models and cultures is represented by digital transformation.

Each of these ideas has particular benefits and potential drawbacks. Accessibility and scalability are increased with digitization, but careful preservation efforts are needed. While increasing efficiency and customer involvement, digitization also poses issues with data protection and employment displacement. Organizations may innovate and stay competitive with the help of digital transformation, but this requires major expenditures and change management.

Again, I love technology, but we need to strike a balance. Walking our dogs while staring at our phones, or families sitting at the dinner table and browsing social media rather than talking, or government imposing (soon) CBDCs and QR codes for free movement, is what is tearing the fabric of our society apart.

I believe that we can unleash the enormous potential (AI anyone?) of the digital revolution and bring about positive change in all sectors of the economy, society, and culture by embracing digitization in all of its manifestations, if we do it with the focus on people first. And that crap most governments sell you, along with organizations like the WHO and even the UN these days are just icing on the cake. That is about control, not beneficial progress for all.