Last updated: Digitization, digitalization, digital transformation: The differences

Digitization, digitalization, digital transformation: The differences


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What are digitization, digitalization, and digital transformation, and what’s the difference between the terms?

Is your company digitizing its data? Maybe you’ve already progressed to digitalization? Is your business paving the way through digital transformation, or perhaps even threatened by it, given the fact that you’ve not completed the process?

The 21st century ushered in a new era of technology that’s been reshaping everyday life, facilitating outdated processes, and giving rise to entirely new business sectors.

Some of the most common catchphrases being tossed around are digitization, digitalization, and digital transformation. However, there’s persistent confusion regarding the difference between these terms, or that there’s even a distinction to be made.

And yet the difference is significant, and should be taken into account when discussing what kinds of changes your business is – or should be – making.

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Difference between digitization, digitalization, and digital transformation

Digitization: Transitioning from analog to digital

Years ago, and sometimes still today, business processes were analog. If you had a device in need of repair, you’d call the manufacturer, who would fill out a work order form explaining your issue. A service technician would be assigned the task of making a field visit to assess, and hopefully repair the issue.

All customer files, product manuals, repair handbooks were hard copies. This meant that the service technician would arrive with a stack of paper that might include anything from the customer’s name and address to the product’s history and a listing of replacement parts to a date book listing the day’s appointments.

What is digitization?

Digitization is the process of moving from analog to digital by converting physical information like photos, images, music, speeches, etc. into digital formats. Digitization is also known as digital enablement.

Put another way, digitization takes an asset produced using analog process and changes it to a digital form without any material change to the process itself.

Digitalization: Making digitized information work for you

Once analog data has been digitized, there’s enormous potential for applications that facilitate standard work practices.

Field service providers can implement field service management (FSM) software to make smart use of digitized information.

What is digitalization?

Digitalization is the use of digital technology to enhance or change existing business processes while creating new value and revenue drivers for a business.

For example, centralized data about customers, including contact information and product history, help service technicians stay informed about their customers’ previous issues and what types of problems they might encounter, meaning they come prepared with an arsenal of current and background knowledge to assist in a smooth field service operation.

In addition, information collected from different service technicians about the same or similar products can be compiled to create checklists for resolving recurring issues. This kind of knowledge sharing can also extend to product manuals and video tutorials that are available on any mobile device.

All these types of tools ensure that technicians in the field have access to as much information as possible to guarantee a first-time-fix.

What is digital transformation?

Digital transformation is the process of devising new business applications that integrate all this digitized data and digitalized applications.

Thanks to digitization and digitalization, data is easily accessible for use across various platforms, devices, interfaces.

Digital transformation: COVID defined (and rewarded) the businesses that underwent digital transformation.

Consider the example of Netflix and Blockbuster: once films were digitized, the path was paved for a completely new business model – movie streaming.

These are the biggest game changers when it comes to digital transformation:

  1. Artificially intelligent FSM: Using artificial intelligence, field services can be optimized to ensure the quickest service is performed by the most qualified technician. By quickly calculating a customer’s location and the location of available field service technicians at any given time, and cross-referencing this information with the technicians’ skill sets and expertise, AI powered FSM software can dispatch the best man or woman for the job in real-time.
  2. Augmented reality tools: Though AI applications ensure that the technician most suited for a task is assigned, no one can know everything. That’s why combining augmented reality tools with a database of video tutorials, manuals, and even offsite experts is changing the way field service technicians tackle complex issues, and redefining the field service sector.
  3. Predictive maintenance: Thanks to sensors programmed to measure specifications like temperature, wear and tear, and a slew of other indicators, machines are now able to transmit warning signals well in advance of breakdowns and malfunctions. This makes it possible to schedule repairs at convenient low productivity times, and to avoid costly downtimes.
  4. Reimagining the workforce: An increased number of tasks resulting from predictive maintenance, combined with a desire to keep overhead costs low, has led to the concept of crowd service: a pool of certified and qualified service technicians consisting of the company’s own employees as well as partners, subcontractors, and skilled freelancers. The crowd is integrated into AI-powered field service management software, guaranteeing that someone is always available in real-time to meet customer demand. Since these service technicians are compensated by service and are not full-time employees, service providers can reduce overhead.

Digital innovation: The race is on

These new digital transformation innovations revolutionizing an industry are also leading to huge savings in the most valuable corporate resources: time and money.

As with any revolution, there will be clear winners and losers. Companies unable to keep pace with the digital transformation run the risk of becoming obsolete – the next Blockbuster so to speak.

The Digital Age has only just begun to change how we work and play. There will be plenty more innovations and just as many new terms for us to learn and distinguish amongst. As digital transformation redefines business, just remember we have digitization to thank for it all.

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