digital terms: defined & refined
Digitization. Digitalization. Digital Transformation. Say that three times fast. Or cite the difference between each. Neither is an easy task. We’ve been hearing a lot of questions around these subjectsꟷwhat they mean, how they work, how they intersectꟷso we’re dedicating this post to answering your questions.
Q: What is digitization?
A: Digitization is the process of changing information from analog to digital form. We’ve actually been doing this for decades. In fact, in 1986 99.2% of the world’s storage capacity was analog. By 2007, 97% of the world’s information storage capacity shifted to digital. Anytime you scan a photo or a document—into bits and bytes—you are digitizing that object.
Q: What is digitalization?
A: Digitalization is the use of digital technologies to change a business model that often leads to improved productivity, efficiencies and cost savings. Digital invoicing, chat bots and computer-controlled equipment are all examples of digitalization.
Q: What is digital transformation?
A: Digital transformation is a businesswide initiative to integrate intelligent technology into all areas of the business to achieve better outcomes, and optimized performance and business processes. Think about the evolution banking has undergone from in-person/ATM banking to online/mobile.
Q: What is the digitization of our buyer’s journey and what exactly does that mean?
A: Digitization is the conversion of analog data to its digital equivalent. With the massive shift to digital, it’s critical to your brand that you have a presence in these channels. Chances are you will need to convert analog information, whether it’s customer data, product research, customer service FAQs, content, directories, etc., into a digital format so that it can be leveraged across the digital channels your customer connects with throughout their journey. Every touchpoint across your journey is a brand experience. As we move further away from offline touchpoints, you’ll want to make sure you are providing a meaningful experience and relevant information to your customer in a digital format.
Q: What is the relationship between digitization and digitalization?
A: Think of digitalization as the use of technology to achieve a goal and digitization as the process to convert information to a digital equivalent. A retailer may use digitization to convert merchandise photos into a digital format and then use that data in a digitalization process to display their merchandise online for e-commerce.
Q: Do customers know what digitalization means? Do we need to alter our customer experience?
A: Customer experience should always be based on what is best for your customer. There is no one-size-fits-all solution. However, digital technologies, whether your customers realize their relationship to digitalization or not, are likely preferred. Our preference and use of digital technology only continue to rise; think of online shopping, mobile food orders, electronic invoicing, online research, etc. Has your business adapted to these behavioral shifts? Reexamine your audience personas and build an experience for your brand that is customer centric.
Q: Who is responsible for implementing a digital transformation? Should there be collaboration?
A: Digitization is a business model shift and should be part of a holistic approach. Typically, a chief digital officer will develop the strategy and formulate a team of senior management across divisions of the business. Leaders must be involved and committed to the fundamental changes digitalization will have in order for the process to work. Businesses that embrace change and honor a customer-centric model are best equipped to achieve digital transformation.
You may still not be able to say Digitization, Digitalization and Digital Transformation three times fast, but you can now say you know their differences and what they mean.
Interested in learning more? Contact Jamie Gyerman.