Digitize vs digitalize: Understanding the key differences between these two terms is essential when formulating your business strategy.

Digitization means to convert something into a digital format, and usually refers to encoding of data and documents.

Digitalization means to convert business processes over to use digital technologies, instead of analogue or offline systems such as paper or whiteboards.

In a nutshell, digitization refers to information, while digitalization refers to processes.

And while making the distinction between the two might seem like splitting hairs, appreciating the difference is important because they are genuinely different things to your business, each requiring different resources, approaches and tools.

Whether you’re using the term digitize or digitalize, make sure you’re referring to the right thing to avoid confusion and misunderstandings.

Let’s look more closely at what each of these terms means, what the differences are, and why using and fully understanding both is vital to your business’s future success.

We’ve also included a couple of simple visual models that we think will really help you to clearly distinguish between the terms.

• A definition of digitization
• A definition of digitalization
• Digitalizing a business
• The benefits of digitalization
• Digitization vs digitalization: A comparison table
• Where does digital transformation fit in all of this?
• Two simple ways to look at digitization vs digitalization
• Digitalization and digitization in field service
• Ready to digitalize your business?

A Definition of Digitization

In the simplest of terms, digitization is turning something into bits and bytes, or 1’s and 0’s.

Digitization is basically the process of taking analogue information, such as documents, sounds or photographs, and converting into a digital format that can be stored and accessed on computers, mobile phones and other digital devices.

Examples that you may be familiar with personally include turning the music from a vinyl record into an MP3 file, or capturing a treasured video from a VHS tape onto a DVD.

In business, digitization may involve scanning old documents into PDFs, converting printed photographs into image files, or transforming printed reports into meaningful data that can be manipulated and analysed.

Some digitization projects may include going back over years of business records and information and converting them into a digital format for easy reference. The original content may be stored or destroyed, or may degrade over time, as in the case of magnetic tapes.

In other cases, it may be that any new information being captured in a business is now created and stored primarily in a digital format, with any physical forms being only secondary copies. This is tied closely to, but is not the same as, digitalization.

There is also a subtle distinction between capturing information about something in digital form, such as a taking a photo of a flower with a digital camera, and changing something that is currently stored or captured in a non-digital form and turning into a digital version of itself, such as scanning a printed copy of the photo or converting a paper form into a digital version.

The latter is considered to be digitization, while the former is not, because the flower still exists in a non-digital form after the photo is taken, so the flower itself has not actually been digitized.

Regardless of what kind of non-digital content you’re working with, what defines digitization is that you’re working with information, and ensuring that it’s in a digital format.

A Definition of Digitalization

There’s still some debate around the exact meaning of digitalization, which means that people sometimes use it to describe digitization.

However, the general consensus is that digitalization refers to the conversion of processes or interactions into their digital equivalents.

And because all business processes and interactions involve people in some way, it’s possibly more accurate to say that digitalization is the reorganization of these business activities around digital technologies.

In other words, these processes and interactions may not be fully digital, but simply rely more heavily on digital tools than they used to.

Examples include moving from sending physical letters via the postal service to using email, or from having in-person meetings to using online video conferencing tools.

Digitalization of a business is also likely to be an ongoing exercise, as new technologies emerge that allow further digitalization of processes and interactions.

Digitalizing a Business

As a result of digitalizing a business, an amount of digitization will also occur, simply because information that was once stored in a non-digital format, is now captured in digital form as the processes are updated, so the two concepts are closely related.

The digital business that results from digitalization is generally an integrated mix of digital and physical activities, across many different channels and formats.

Some of the business activities may be automated as a result of digitalization, such as manufacturing lines or equipment monitoring, while others still require human involvement with a greater reliance on digital technology, such as online chat tools or social media management.

Digitalization is also likely to require retraining of employees, either to make use of the new technologies and digital processes, or to redeploy them into a new activity within the business.

At the end of the day, digitalization creates a business that has digital information at its core.

The Benefits of Digitalization

Digitalization may contribute to a change in business models, as new technologies provide access to ways of doing business that were previously unavailable.

A digitalized business can also generate additional revenue through the provision of additional value to their customers and access to new opportunities and markets.

Efficiency gains are another key benefit of business digitalization, with less double-handling of data and greater accuracy of work, leading to better utilization of resources and greater profitability.

Digitalization also enables better visibility of an organization’s performance through real-time data capture and reporting, and this improvement in the quality of data enables business decisions to be made more quickly and with greater accuracy.

Digitization vs Digitalization: A Comparison Table

To help you more clearly distinguish between digitization and digitalization, here’s a side-by-side comparison of the two concepts. 

Where Does Digital Transformation Fit into All of This?

The meaning of digital transformation is closely tied to digitization and digitalization and has evolved over the years as more and more digital technologies have emerged.

Currently it refers to a higher-level perspective on the creation of a digital business, where strategic decisions are made to take advantage of all the opportunities that digital technologies provide, and to focus on changing the overall approach of the business to create resilience and adaptability.

Digital transformation is a broad framework to help businesses respond to emerging technologies, in order to significantly improve performance and presence.

Digitalization projects may arise out of digital transformation, which may then lead to digitization of business information, but this is not the entire picture of digital transformation.

In addition to this, digital transformation also affects the customer experience, through a better understanding of customers and more ways to interact with them, and shifts the business thinking to include new products, audiences and greater integration that result from digital technologies.

In other words, digital transformation includes all aspects of a business, regardless of the kind of business or how digitalized they are, because emerging technologies affect everyone, everywhere.

At the heart of all these terms is the basic understanding that businesses must adapt and evolve to take advantage of digital technologies in order to remain competitive.

Two Simple Ways to Look at Digitization vs Digitalization

Here’s two visualizations of some simpler ways to look at digitization and digitalization, along with digital transformation, that may help you to define and remember the concepts more clearly.

The high to low level view

In this perspective, we look at the different concepts in terms of granularity, where digital transformation is the big picture view, down to digitization at ground level.

Note: Please feel free to share this infographic with a link back to the original post.

The past-present-future view

You can also look at these concepts using time as a framework, in that:

• Digitization refers to things that have already happened (i.e. information being captured)
• Digitalization is about things that are happening right now (i.e. business processes)
• Digital transformation is about what will happen in the future (i.e. businesses evolving)

Note: Please feel free to share this infographic with a link back to the original post.

These two different models are of course a simplification, but they do help to more clearly define the boundaries between the different terms and should reduce confusion as you use them in your day-to-day business operations.

Digitalization and Digitization in Field Service

So how does all this talk of digitizing and digitalizing apply to field service businesses?

In the case of digitization, it makes a lot of sense for field service operations to convert as much of their data about their customers and assets into digital form as possible.

By storing information in a digital form – whether that’s invoices, service records, or customer details – the business and technicians can more readily access relevant information, allowing them to provide a much higher quality customer service experience.

And this is closely tied into digitalization, because to make used of this digitized information, employees need simple and effective ways to locate and use the data.

By implementing a business-wide ERP, data about customers and their service history can be stored in a consistent way and made available to all employees as required.

And for a field service business, having a digital way for technicians to both access and capture data while out and about in the field, ensures timely and more accurate data collection, as well as empowering technicians to provide outstanding service to customers.

Equally, for any business that needs to manage field service operations, or simply juggle a large number of resources, having a quick and simple way to schedule these resources digitally is essential, to ensure that everyone is seeing the most up-to-date version of the job board, and to maximize utilization of service technicians.

And finally, having an integrated digital approach to data collection and service delivery allows field service operations to report on and analyse data in real-time, ensuring effective inventory management, utilization of resources and accurate and timely decision making.

All of these benefits, and more, can be realized by digitalization of your field service business with field service management software, like NextService.

Ready to Digitalize Your Business?

To recap, digitization is something you do to information, digitalization is something you do to processes and digital transformation happens to an entire business.

As more and more digital technology is developed, it’s essential for all businesses to be aware of the impact of these technologies on their business, and how to use digitization, digitalization and digital transformation to stay ahead of the competition.

Talk to us today about how Next Service can help your business digitally capture data (including out in the field), schedule work orders and manage assets to provide exceptional customer service.

References

• https://www.gartner.com/en/information-technology/glossary/digitalization
• https://www.brookings.edu/research/digitalization-and-the-american-workforce/
• https://www.capgemini.com/wp-content/uploads/2017/07/Digital_Transformation__A_Road-Map_for_Billion-Dollar_Organizations.pdf