Digitisation and digital transformation are concepts that are often used as synonyms, but they are not. Both have differentiating functions and characteristics in business and organisational environments. Digitisation is a stand-alone process that can be executed in different parts of a company, and digital transformation encompasses the entire business.
What is digitisation?
Digitisation is a concept that has been around for years, but it is not always used in the right context. It can be defined as the improvement of business processes, functions and operations through the use of appropriate technology to incorporate a new digital business space.
In short, it can be simplified as the transfer of information from a physical format to a digital environment. An example of digitisation could be a dental clinic that stores patient records in the cloud, rather than incorporating physical records.
In addition, the digitisation of processes makes it possible to add new digital systems to facilitate the performance of tasks and thus achieve higher profits. For a business, embracing digitisation can bring new business opportunities, as the company is able to achieve expansion. However, the digitisation of processes does not change the development of the organisation, but enables it to move towards digital transformation. Digitisation is the path to digital transformation.
There are different contexts, as examples, in which to better understand the digitisation of a business. On the one hand, an organisation can initiate the digitisation of its content, i.e. digitise archival documents such as invoices or product sheets. On the other hand, there is the digitisation of processes, including tools such as email, social media, website, automation, etc., to improve communication with customers, employees or distributors.
And what is digital transformation?
While digitisation focuses on the incorporation of technology, digital transformation is a more complex concept that seeks solutions from a digital environment. To initiate a digital transformation, the business must not only adapt to new technologies. Digital transformation is therefore nothing more than finding solutions to problems with the best digital technical means or methods.
In this context, it can be said that it does not so much involve the technology as the digital strategy devised by the people within an organisation. Unlike digitisation, digital transformation cannot be executed with a single objective, it requires the entire business, including adaptation by human teams. This means that changes are not only focused on improving the user experience, but also require leadership support and employee training to implement. In this case, training programmes will be necessary.
Any company can transform digitally, and it is a key step in adapting to today’s ever-changing economic environment. To do this, a strategy tailored to each organisation must be planned and devised. With digital transformation, businesses can incorporate a new perspective on their processes and competitive intelligence, generate new growth opportunities and explore new ways to be scalable.
Digitisation and digital transformation and their differences
What are the most important differences between digitisation and digital transformation? Primarily, digital transformation involves two issues. Businesses that decide to undertake a digital transformation must adapt to today’s digital environment. Digital transformation is about how a company uses technology, with the aim of improving business performance. The involvement of people and processes is therefore crucial.
While digital transformation focuses on harnessing the knowledge that digital information brings, digitisation focuses on processing data. The latter aims to automate existing processes, and digital transformation aims to change the culture of the company to move towards a new business environment. Digitisation manages IT systems and applications, and digital transformation works on disruptive technologies i.e. innovations that aim to replace established processes.
Digitisation and digital transformation: How do you know what a company needs?
Both concepts are of great importance today. Having a device for scanning documents is as necessary as having a tool capable of using this digitised information to obtain relevant data. The ultimate expression of this digital processing is the Big Data.
Irrespective of the size of the company, at what point will they need both strategies to achieve meaningful objectives?
A company needs to start digitising the process if:
- It is unable to process large volumes of information physically.
- Cannot organise information properly.
- It does not have tools to facilitate communication processes between its customers, distributors, sales representatives, etc. (e-mail, chat, social networks, etc.).
And it will need to start its digital transformation if:
- It has not adapted to new digital environments, such as e-commerce.
- It does not have tools capable of automating processes.
- It is not able to optimise processes, negatively impacting the efficiency and monetisation of the business.
The digitisation of processes can help the digital transformation of a business, but they are not the same thing.