Transcription
Let's explore the difference between these two terms: digitization and digitalization. Similar, but not the same. What about digital transformation? Let's find out.
[Music]
Let's start with digitization. Digitization describes the conversion from one analog information into a digital format. In other words, it is really the process of converting information from a physical format into a digital one. For example, converting a physical document into a PDF by scanning it or photographing it; converting a video stored on a VHS tape into an MPEG file; or converting the audio from one audio cassette into an MP3. As the last example, it's really taking this receipt and transforming it into a digital format by taking a photo of it. Done that. Digitization.
Please like the video if you've used a video or an audio cassette before, or if you liked the explanation of digitization. It's important to remember that it's really the information you are digitizing, not the process. That's where digitalization comes in. In Garner's IT glossary, digitalization is the use of digital technology to change a business model and provide new revenue and value-producing opportunities. In other words, digitalization is the process of leveraging digitization to improve a business process.
So, let's take our receipt example and put it in the context of filing an expense claim so you can get reimbursed. It's not unheard of to really fill out a physical copy, right, for an expense claim? You're probably still doing it now. In order to do that, you attach your receipt and submit it to finance after you've filled out, manually, that form. Now, a new way to do it is to fill out an online form version of the expense claim. You attach to it a digitized version of your receipt, the one that we took a photo of, and submit it to finance. This last process represents the digitalization of our analog or paper-based process that we had before. It's using a technology to a platform to create a value-producing opportunity in our case, an operational efficiency. Why? Because by digitalizing the expense claim submission, we enable greater traceability, faster processing times, and really reduction of work, and so on.
Digitization is an act that may enable digitalization, but the latter always requires the former. Digitization cannot occur without digitization. By the way, if you like to read more detail about all of this, please check out the accompanying article explaining the differences between these three in greater detail. You can find a link in the video's description.
Lastly, let's move on to digital transformation. Digital transformation is the impact caused by the process of digitalization. It refers to the societal effect of digitalization. So, back to that receipt example. With digitalization, a finance clerk doesn't need to use their entry skills as much, and instead, they will now use that time to focus on auditing the submission. It may be doing some analysis on how the reimbursement submission impacts the overall expense budget, just an example.
Here's a word of caution: When looking at digital transformation, most organizations really invest into training their staff on how to use the technology required for digitization and digitalization, but not how to store the data. And let's be honest, the most value really lies in the data, not in the technology. So, if you are part of these processes and transformation, please don't forget to emphasize the importance of data governance and data management.
Let's recap to make sure we're all on the same page. Digitization is the process of converting information from a physical format into a digital one. When this process is leveraged to improve business processes, it is called digitalization. The results of this process are called digital transformation.
Don't forget to check out lightsondatacom. Here you can find more informative content such as templates and guides, best practices articles, and other useful resources to help you with your data governance and data management questions and challenges. Please like the video if you've enjoyed it and don't forget to subscribe, as it's free. Anyone really help me out as well. Thank you.