The difference between Digitization Digitalization Digital Transformation
Software Development

Why are digitisation, digitalisation & digital transformation crucial steps in business development?

date: 14 April 2021
reading time: 4 min

The Digital era created concepts to describe the reality we live and run business in. There are three basic definitions: digitisation, digitalisation and digital transformation.

What are the differences between them, and why is it important to understand them as parts of a more complex business process? Let’s explore these three concepts in detail.

Although these three definitions are closely related to each other, using them interchangeably has been a common mistake for years. We are talking about different processes that can be regarded as essential steps to take if you want to lead your business to the world of industry. Understanding the differences between the three processes is a must-do before you get involved in any digital-related investment.

Step 1: Digitisation

DIGITISATION is the process of changing from an analogue to digital form, also known as digital enablement. Said another way, digitisation takes an analogue process and changes it to a digital form without any different-in-kind changes to the process itself.
Gartner Glossary

For business, digitisation is the first step in creating significant value in digitised data ready to be analysed. Digitisation also helps save considerable amounts of meaningful documents, historical files and precious art from both: destruction and oblivion.

Examples of digitisation:

  • handwritten documents and data sheets including, e.g. customer or sales history, rewritten on the computer and converted into PDF/ Excel files
  • old projects, maps or handmade instructions carefully photographed and digitised as JPG files
  • analogue movies converted and compressed into H.264 or HEVC files

Step 2: Digitalisation

DIGITALISATION is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities.
Gartner Glossary

It means we can start using digital technologies to analyse gathered data and benefit from the results. Discovering the potential of processed digital data can help us achieve different business goals, e.g.:

  • improve internal/ external business processes
  • gain higher effectiveness in various fields
  • give employees access to the necessary data
  • provide better understanding of the target group
  • design better customer experience

Examples of digitalisation:

  • uploading data from traditional Excel sheets stored on one computer to the cloud solution so that all employees involved get easy 24/7 access to the essential data
  • launching new e-commerce offers with promotions targeted to individual needs (like personalised items via app)
  • analysing data collected by Internet-connected devices to find new revenue streams (e.g. repetitive customer request for a product that doesn’t exist in the offer yet)

Step 3: Digital Transformation

DIGITAL TRANSFORMATION can refer to anything from IT modernisation (for example, cloud computing), to digital optimisation, to the invention of new digital business models.
Gartner Glossary

Digital transformation is the process of fully benefiting from the enormous digital potential in your business. It’s a complex change for a company that includes all aspects of business: its models, internal and external processes, management at all levels, products and services.

Examples of digital transformation:  

  • sing automation tools in all company departments helps save time, free up internal workforces and keep all documents and crucial information in order
  • transforming from a traditional CRM system to a modern cloud solution

The most significant benefits of digital transformation are:

  • optimised business processes
  • remote access to data
  • higher productivity and transparency
  • increased sales
  • reduced internal costs
  • new products, innovative processes
  • more time for meaningful tasks

Business powered by digital solutions pays off

The events of 2020 proved how much we need digital opportunities to thrive and simply exist.

Those companies that had undergone digital transformation benefited from integrated and easily accessible data. The whole range of game-changing solutions made it much easier to improve processes and adjust the offer to new needs and challenges.
Among them are e.g. different cloud systems and data solutions.

Summing up the differences

Digitisation means converting physical materials into digital formats. When we apply technology into the existing business to improve the chosen process or create new revenue, it’s digitalisation.

Both of the above processes can exist separately, but they can be significant parts of the complex process of digital transformation. It includes all aspects of business and needs to be regarded as a massive change for the whole company.

After conversion, the digital-driven business operates with automated processes, integrated systems, and broad opportunities.

Start your digital journey with experts

Every step towards the digital world has its opportunities. It takes courage, detailed strategy, and specialists’ support to start the new digital era in your company.

Suppose you are ready to make a significant change. In that case, we can lead your business through each step towards digital transformation, offering long-term partnership, constant expert support, and best-fitted solutions.

Do you want to talk about transforming your company into a thriving digital-driven business?

Read more on our blog

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