What is Digitization and How Can I Enact It in My Business?
In a world in which digital solutions are moving businesses and people further and faster than ever before, there are two terms that continuously pop up, namely: digitization and digitalization. But, be aware, because the two are not the same, although they work together in tandem oftentimes.
We are going to review the digitization definition, compare digitization vs. digitalization, and see how the data digitization process can better your business.
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Defining Digitization
Digitization is the act of “making something digital.” For example, if you scan or take a photo of a paper document, then digitization has taken place.
To better understand the concept, it helps to list out digitization examples, such as:
- Collecting and scanning paper-based records
- Moving from paper receipts to electronic receipts
- Creating digital media from analog recordings or videos
In some cases, the concept of process automation may also be considered to be a digitization process, as process automation removes manual labor from the equation, and instead, automates/digitizes the tasks. This could be using AI and machine learning for better decision-making, or automating workflows in marketing, finance, and sales, to name a few.
Key Concepts in Digitization
When it comes to answering, “What is digitization vs digitalization?” there are many more “d” words that are worth defining for a deeper grasp of these important concepts.
Here’s a helpful list that will likely clarify a whole lot and showcase how some of these terms and technologies are interconnected:
- Digital Transformation: Digital transformation refers to the approach of adopting and implementing various technologies to optimize, modify or create new business processes and services. It involves both the technologies that are deployed, as well as a broader mindset that accepts and invites digital solutions as an answer to progression.
- Digitalization: Most similar in look and sound to digitization is digitalization. Digitalization is how organizations restructure around media infrastructures and digital communication. According to Gartner, digitalization means, “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities.” So, of course digitization is involved.
- Data Digitization: Data digitization makes digital formatted data more widely accessible so the business can make use of the data.
- Document Digitization: Document digitization transforms physical documents into digital forms (i.e. scanning a paper copy to create a digital file).
The Technologies Driving Digitization’s Advantages
In order to make digitization work, you need access to the technologies that transform paper-based and analog information into electronic formats, such as cameras, scanners, etc. However, moving even deeper, once your data is digitized, what happens next?
The technologies that support digitization and enable digital transformation connect data and systems to streamline and empower accessibility, real-time analysis, and collaboration.
These critical technologies include:
Cloud Computing
Cloud computing is the delivery of computing systems (storage, databases, networking, software, servers, analytics) over the internet, or in the cloud, as opposed to on-site.
Internet of Things (IoT)
Internet of Things (IoT) refers to a network of interrelated devices that communicate and exchange data in the cloud and with other IoT devices.
Big Data Analytics
Big data analytics is the process of leveraging big data (large datasets) to derive patterns and trends for informed decision-making capabilities.
Artificial Intelligence (AI) and Machine Learning (ML)
Artificial intelligence (AI) is the development of computer systems that can think and act in human-like ways without human intervention. Machine learning is a subset of artificial intelligence (AI) in which a computer uses input data to train an AI system to get better with time and activity, without having to program the system again.
Robotic Process Automation (RPA)
Robotic process automation (RPA) is software technology, or bots, that mimics human actions to perform a set of predefined instructions to execute a basic and repetitive task.
As you can see, these technologies are all powerful in their own way. And, when combined with digitization, they can transform a business to do more in less time, reduce errors, minimize costs, and access insights to improve.
Benefits of Digitization
Even a little digitization can go a long way! After carrying out the data digitization process, you may notice many upsides that come along with doing so, such as:
- Improved Efficiency and Productivity: Without having to make copies to share with coworkers, you can expedite collaboration and process execution with digital files.
- More Storage Space: Storing paper documentation can be a drag on your physical real estate. Although data storage requires space, it’s not tangible.
- Cost Reductions: You can save on resources needed to print physical documents, such as paper and toner, which can lead to cost reductions.
- Better Customer Experience: You’ll be able to better service customers and address their needs as digitization improves accessibility, decreases delays, and can remove key person dependency.
Think about the many paper-based and analog processes you are running today. Chances are they are error-prone, frustrating for employees to carry out, costly, and always at risk of creating detrimental delays. With digitization solutions, like aiOla (a speech-enabled AI technology), you can remove paper-based processes, streamline workflows, and create access to usable data for process improvement. All the while, aiOla helps to improve safety, compliance, and collaboration. aiOla is just one solution to advance digitization in your organization through the use of speech.
Challenges and Risks of Digitization
Perhaps you’ve been worried or reluctant to digitize your business because of fears and challenges. Common concerns like the following may arise, but there are always solutions to overcome the hurdles.
- Data Security and Privacy Concerns: Data security is a serious concern, which is why it pays to select a technology that is encrypted, protected, and regularly updated. Don’t forget that physical documentation is also at risk of loss, damage, and theft.
- Legacy Systems Integration: If you have an existing tech stack, make sure to choose digitization technologies that integrate and work well with your legacy systems.
- Digital Skills Gap: Digitization and digital transformation is often met with questions around what a person’s role will be once technology has been deployed. It also may require technical acumen. That being said, the top-tier technologies that are popular amongst businesses intend to augment and enhance human capabilities, rather than replace them. At the same time, you can find out-of-the-box solutions with no learning curve (such as aiOla, which simply requires a compatible device, speech in your native language, accent, and business jargon, and digitizes your processes for you).
Digitization is Paving the Path Forward
Now that we’ve broken down digitization vs digitalization and all the other similar sounding and related terms, the lifecycle is clear: by digitizing information, you can digitalize processes to ultimately achieve digital transformation.
The technologies and innovations listed within this article all work together to enhance operational efficiency, boost customer service and value, and reduce errors and costs.
