Digitization

Digitization is used in many contexts; it is very often confused and/or interchangeably used with digitalization. So, what is digitization?

Digitization and digitalization are two conceptual terms that are closely associated and often used interchangeably in a broad range of literatures. There is analytical value in explicitly making a clear distinction between these two terms. (Scott Brennen and Daniel Kreiss) Digitization is used in several meanings as said but for us it has two meanings which are closely related with each other. For starters, digitization is creating digital (bits and bytes) version of analog/physical things such as paper documents, microfilm images, photographs, sounds and more. As the people of the Caribbean Community Climate Change Centre tweeted us, there is, for instance, also the conversion of analog audio and video production to digital formats to which we refer as, indeed, digitization. So, it’s simply converting and/or representing something non-digital (other examples include signals, health records, location data, identity cards, etc.) into a digital format which then can be used by a computing system for numerous possible reasons. Digitizing doesn’t mean replacing the original document, image, sound, etc. Sometimes it gets destroyed (after having digitized a paper document you can destroy it or keep it, depending on, for instance, legal requirements), sometimes it disappears anyway (if we capture the sound and images in the form of a video of your presentation at an event, the digital format continues to exist while your voice and physical presentation during that presentation are gone forever) and sometimes it is transformed but that’s not that much about digitization in the strictest sense (if you take a picture of a building you have a digitally born representation of the building but the building is not digitized or you might have an analog picture which you scan so it is digitized).

Digitization defined in the context of processes

In the context of ‘physical information carriers’, such as paper documents or analog, printed images, we mainly digitize by using document scanners in business (you can also, for instance, scan or simply take a picture with your mobile). These document scanners create a digital representation (document imaging) of a scanned document, a photograph, etc. But it doesn’t stop with document imaging in most cases. After all, why scan a document if you don’t use the data it contains (except for archiving or, as many companies still do, for real capture after the scan)? Normally and in most business cases it’s far more important that the data which capture software can retrieve from the scanned image, by using all sorts of intelligent and less intelligent capture technologies, are extracted in a digital form and leveraged to feed a workflow, a business process, a system, whatever is needed to achieve an outcome.

And that brings us to the second meaning of digitization. In business, we speak about digitization from the perspective of processes too. In a sense, it often becomes a synonym of automation here. That second meaning comes from the fact that in a business context we digitize documents for a reason, in practice a chain of events and actions, as explained (workflows, processes,…). So, if you use digital data, extracted from physical carriers, to automate business processes and workflows, we speak about digitization as well. Paper clogs up processes. Paper creates disruptions to smooth information flows. Digital processes require digital information (John Mancini) When you hear people say “we have digitized”, most of the time they mean “we have moved from paper to digital data and from manual processes, which were about dealing with paper, to digital and automated workflows and processes.”

In conclusion: digitization is digitization. Period. Digitization is the automation of existing manual and paper-based processes, enabled by the digitization of information; from an analog to a digital format.

Digitalization

Often used interchangeably with digitization as mentioned (and with digital transformation too), digitalization is really something else. Digitalization means turning interactions, communications, business functions and business models into (more) digital ones which often boils down to a mix of digital and physical as in omnichannel customer service, integrated marketing or smart manufacturing with a mix of autonomous, semi-autonomous and manual operations

In business, digitalization most often refers to enabling, improving and/or transforming business operations and/or business functions and/or business models/processes and/or activities, by leveraging digital technologies and a broader use and context of digitized data, turned into intelligence and actionable knowledge (remember DIKW?), with a specific benefit in mind. It requires digitization of information but it means more and at the very center of it is data, nowadays lots of data and big data. While digitization is more about systems of record and, increasingly systems of engagement, digitalization is about systems of engagement and systems of insight, leveraging digitized data and processes. It’s in this meaning and information-rich context that we mainly use it. A second aspect that is often mentioned is the digitalization of a specific ‘environment’ or area of business.

Take the digital workplace. Often you strive towards a minimum of paper. But a digital workplace is about other things as well. It also means that your workforce works differently, using digital tools such as the mobile devices and technologies that make them mobile and/or using social collaboration and unified communication platforms, which are digital systems, enabling them to work in a more “digital way”. This, in turn, creates new opportunities to engage differently. And it requires more than just digitized data. Digitalizing your business leads to digital business. The list of what you can digitalize (supply chains, leading to digital supply chains, etc.) is long.

In general, digitalization is seen as the road of moving towards digital business and digital transformation, as well as the creation of new – digital – revenue streams and offerings while doing so. And that requires change. This is why many people interchangeably use digitalization and digital transformation (so do we often).

Digitalization according to Gartner end 2013 – more or less a synonym of digital transformation – source Gartner (PDF opens)

A third meaning of digitalization goes beyond business and refers to the ongoing adoption of digital technologies across all possible societal and human activities.