Digitalization

What is Digitalization?

Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.Digitalization is done to process, store, and transmit information through digital circuits, equipment, and networks. Digitalization makes it easier to access, preserve, and share information. It is essentially a process of converting everything into digital format. Ultimately, digitalization aims to ease lives and create a more self-reliant business model that promises standardized quality and cost-efficiency.

Digitalization is the generic term for the Digital Transformation of society and the economy. It describes the transition from an industrial age characterized by analog technologies to an age of knowledge and creativity characterized by digital technologies and digital business innovation. Alongside business innovation, digitalization – the development of digital innovations – is one of the most important business trends for the future of the economy. Companies need to develop digital strategies and focus on what are the key success factors of digital transformation. Digitalization has many different aspects:

For example, the term digital transformation describes the gradual transition of existing economic and social systems into the digital age. The term Digital Disruption describes the radical changes triggered by innovative digital business models.

Digitalization vs. Digitization vs. Digital Transformation

When you consider digitalization, digitization, and digital transformation to be equal, you’ll quickly find yourself in a pickle. Even though these terms may be connected to each other, they are certainly different. So why is it important to differentiate these three terms? If you misunderstand these terms, you may be missing out on many opportunities to gain a competitive advantage and become a fully-digital agile business. Many leaders found themselves in misconception, thinking that they can digitally transform their business by digitizing their data and digitalizing their processes. These 3 terms greatly differ and you should be aware of this if you’re thinking about serious business growth.

Digitalization vs. Digitization
Simply said, digitalization isn’t possible without digitization.

Digitization refers to the conversion of information from analog to digital formats. On the other hand, digitalization refers to the use of digital technologies and digital data to create new value-producing opportunities and transform the way customers and companies interact with each other.

Digitization is more focused on the internal optimization of processes such as work automation and paper minimization while digitalization goes deeply beyond that.

Digitalization vs. Digital Transformation
Even though digitalization may often be used as an umbrella term for digital transformation, both of these terms greatly differ.

Digital transformation refers to the much wider use of digital technologies and cultural change. It’s more about people than it is about digital technologies. It demands core changes in the organization backed by leadership.

It emphasizes empowering employees with digital technologies in order to change the corporate culture.

Advantages of Digitalization

Organizations all throughout the world are adjusting their operations to be digitally compatible. Many businesses have realized the importance of digitalization and already converted or invested in new business models. Consider communication, music, eBooks, and online shopping. This change will not spare any industry.

It is no secret that businesses must continually change in order to stay viable. In our current digital world, organizations don’t have any choice but to embark on the digital transformation journey.

Organizations may run more effectively, save expenses, and boost production are some of the advantages of digitalization in business. In summary, it is a matter of life and death for them.

The advantages of digitalization are:

1. Streamline processes: Every business is continuously looking for innovative methods to improve efficiency. If you want to become more efficient in business, you will need to embark on the digitalization journey. When a business process is automated, you can expect reliable outcomes every time. Automating processes and related business rules will help your organization achieve greater transparency and fairness. Efficiency is defined as how well time, effort, and money are utilized to complete a task or achieve a goal. One of the most significant advantages of digitalization is that it reduces the time it takes to complete a task, the effort necessary to complete it, and the cost of doing it correctly.
2. Higher productivity: When you automate manual repetitive processes, you free your employees from monotonous job tasks and allow them to focus on more difficult and innovative initiatives that will help your business function more efficiently. With business process automation systems, tasks may be done more faster and with fewer mistakes. Finally, process automation enables employees to make better use of their time at work.
3. Reduce operational costs: Every business owner’s objective is to save time and, more importantly, money. Manual tasks and processes are intrinsically slower than automated activities and processes since they are conducted one at a time. Inefficient processes cost organizations up to 30% of their annual revenue. When business procedures are done manually, there is a far greater chance of resources being squandered. Digitalization enables the most efficient and cost-effective use of your core resources.
4. Increase transparency: Depending on the process you’ve decided to automate (financial, billing, collections, sales, and/or support), critical metrics can be gathered and reported on to provide you with the crucial information you want. Transparency in business processes is critical for long-term success. If processes and their status are digitally monitored, higher management will have more faith in how things are done. Well-documented processes and transparent workflow boost an organization’s visibility. Managers don’t have to worry about employees forgetting what they’re supposed to be doing since everyone understands what they’re supposed to be doing at all times. When leaders visualize processes, they can immediately identify bottlenecks and opportunities.
5. Quality and consistency: One of the most important advantages of digitalization is that it guarantees that each operation is carried out in a consistent manner, resulting in high-quality, dependable output. If you automate your customer service follow-up process, for example, your consumers will receive the same quality of support from your company every time. Because of the assurance of quality and consistency, as well as the time and efficiency benefits, you may begin designing higher-quality, more feature-rich products with little or no increase in manufacturing time and costs.
6. Less human error: When operations are automated, the likelihood of human error is considerably decreased. When it comes to doing tasks, humans are more prone to error than machines. Machines are never weary and can run constantly 24 hours a day. So let us assign what we don’t want to perform to computers and concentrate on more challenging tasks.
7. Governance and reliability: Because automated processes are consistent, you can rely on them to
   • Run your business
   • Provide reliable procedures to your clients, giving you a competitive edge.
     Workflow automation’s dependability guarantees that critical corporate governance operations are carried out 100 percent of the time and in compliance with the law.
8. Enhanced agility: Businesses, now more than ever, must stay up with the fast-paced digital environment. They must be able to swiftly respond to any market shift, upheaval, or new opportunity. Organizations should be agile enough to shift directions rapidly and to do so, agile techniques should be adopted across all departments, and when business processes are automated, it allows for modification and adaptation to changes at a relatively fast pace.
9. Improved employee morale: When employees are required to focus on manual repetitive tasks, it reduces their ability to learn, develop, and advance professionally. Employees benefit from digitalization since it automates these repetitive activities, allowing them to engage in more significant initiatives and so enhancing their morale.
10. Better decision-making: Digitalization and information management work hand in hand; as information is analyzed, it transforms into knowledge, and knowledge leads to better decisions.