Digitization, digitalization and digital transformation are terms that have been used interchangeably. But do these words mean the same thing? In this article, we seek to understand what is the distinction between digitization vs digitalization vs digital transformation and can we benefit from it all.
In the recent past, digital transformation has become such a buzzword. It means the process of using digital technologies to create or adjust business processes, customer experiences and culture to meet the changing businesses needs and requirements in the 21st century.
In essence, digital transformation is actually the reimagining of business in the digital age.
Digital transformation is not only limited to the technology department but also transcends into roles like customer service, marketing and sales. To be successful at digital transformation, you must realize that this needs you to rethink the entire journey about how you think about and engage with your customers.
For small businesses that are just starting, there is no need of starting with a manual process. For best results, it is advisable to start with digital transformation in mind and not start manually and rethink later. This is the only way of safeguarding your small business and making sure that it will go beyond the 21st century.
You must think, plan and build from the word go if you are looking to set your business apart as flexible, agile and ready to grow in the face of fierce competition.
Even by definition, digital transformation begins and ends with the customer. It involves all activities that are geared towards making the customer realize the best customer experience when dealing with our businesses and giving us feedback that we can use to improve our businesses in the long run.
In summary, digital transformation is all about adding value to the end-user. It is concerned more about the people and strategic direction of a company or firm than it is about the technology that the company is using or focusing on currently.
Digitization is the process whereby businesses move from analog systems to digital systems. This can mean moving from keeping records on paper to having the records in a digital form and uploaded to the cloud.
In the old system, businesses kept records on paper which are then stacked into cabinet trays.. These records can relate to accounting, marketing, sales, HR and much more. When information is handled this way, sharing it for decision-making or understanding of the issues around the company or business becomes very difficult.
With digitization, sharing becomes very easy because this information is kept on the cloud or stored in a digital format that can easily be shared through email or other systems.
Digitization is actually the process of converting information from an analog form to a digital format. It is important to understand that digitization only improves the processes of a business but does not transform or change them.
Digitalization is all about efficiency. In digitalization, businesses use digitized information to establish better ways of working and making everything efficient and simple.
A key distinction in digitalization is the fact that it does not change the way businesses are done or create new business ideas or types. In digitalization, the business operation model remains the same but it is made better by the fact that digitized information is easily available for sharing and access.
A key area that benefited from digitalization is the process of customer service. In the old days, customer service, especially during an inquiry, meant that the customer agent has to look up customer data from some archives somewhere and ask around for a solution if they don’t know. This takes too much time.
However, with digitalization, the customer agent can easily get inquiries, look up the relevant data and offer resolutions in almost real-time. In all this, the basic methodology of customer service hasn’t been altered with and has remained the same, only made better by the use of digitized information.
As time went by and digital technology evolved, people realized they need to generate new ways to use business technology while at the same time getting new ways of doing the old things faster using technology. This is what birthed the idea of digital transformation.
Digital transformation has created entirely new classes of businesses and changed the way we do business. Companies that did not think about digital transformation are today revisiting every aspect of their businesses, from internal systems to customer interactions, both in-person and online.
They are using digital transformation to deliver better customer experiences, better decision making, improve their efficiencies and create more personalized solutions to every need that their customers have.
In this digital age, every business is becoming clever, effective, and finding disruptive ways of using technology Better their businesses and stand the wave of competition. Netflix is an example that everybody is talking about when we think of digital transformation.
From taking the brick-and-mortar video rental business through a mail-order system and now availing digital content via live stream platform, Netflix is now a threat to traditional broadcast and cable television networks, as well as production studios, given its ultracompetitive prices.
With digitization, Netflix can now stream video content directly to its customers and at the same time, gain unprecedented insight into the customer’s preferences and viewing habits. This data informs everything that they do, from designing their customer experiences to developing first run-shows and movies in their studios.
This is a classic case of digital transformation, a case of taking advantage of available technologies to completely change how your business runs.
Now that you understand what is the distinction between digitization vs digitalization vs digital transformation, what is next?
With all this said and done, what is the next step? It is imperative to consider first what is possible with digital transformation. It is all about understanding the potential of your technology and asking what this technology is really capable of.
Once you understand what your technology is capable of, then you move on to the phase of thinking about how to adapt your business and processes to take the most advantage of your technology.
The case of Netflix is an inspiration. Before it, people were used to getting to stores and combing through shelves of tapes and disks for something that they could watch and feel good about.
Today, you have a complete library of digital content that is served on your favorite devices with reviews and recommendations readily available based on user preferences.
The subscription-based model delivers content directly to people’s computers, TVs and mobile devices, which is a complete disruption of the brick-and-mortar video rental business that we were used to before.
And Netflix didn’t stop there. With the technology that they have, they went ahead to consider innovations that could deliver content recommendation systems driven by artificial intelligence- something that the traditional system couldn’t deliver at all.
Once you have understood what is possible with your technology, the next step is to adapt your business to leverage digital transformation for maximum benefit.
For example, with digital transformation, companies have reorganized the way they approach their customer service. In the old days, businesses had to wait for customers to find them, either by visiting in person or by calling a dedicated number.
Today, however, businesses have taken advantage of social media to deliver their service offerings and to meet new customers. Some progressive companies have even created dedicated customer service channels on social media platforms to offer customer service.
This is just one way of showing how social media has changed the way we look at advertising, marketing, customer service and event sales. Digital transformation is touching all areas of business and customer interaction with products that were never possible before. And it doesn’t have to be complex, robot-powered products. It can be as simple as a garage door opener.
If you are getting ready to take advantage of digital transformation and not sure where to begin, reach out to Plumlogix for reliable help.
We have a dedicated team of digital transformation experts who are ready to understand your business and devise means of making sure that your business takes advantage of existing technologies and adapts to those technologies to deliver the best possible customer experience. Call us today.