One of the most confusing things about the digital age is the terminology. We hear the terms digitization, digitalization and digital transformation tossed around a lot, but aren’t they the same thing? And if not, what’s the difference?
According to Gartner’s IT glossary, “Digitization is the process of changing from analog to digital form, also known as digital enablement.” The key word is “process” – digitization is simply a process. In the office it’s very much about the process of turning paper into digital documents; to scan a document is to digitize it.
Digitalization and digitization are often used interchangeably, but they are different. While digitization is the process of turning something into digital form, digitalization is about the bigger picture. To use Gartner’s definition again, “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.” Digitalization can’t happen without digitization – a business must have digitized data to transform its business processes.
This is the hardest of the three to define, but we’ll start with a partial definition from Gartner: “Digital transformation can refer to anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models.” It’s the broadest of the three terms, and also the most complex. Digitalization builds upon the foundation of digitization, and digital transformation is enabled by both digitalization and digitization. If digitization is a process and digitalization is a business model, digital transformation is an entire company mindset.