The difference between these three terms seems somewhat innocuous, doesn't it. However, these are some pretty important concepts that you should understand when you plan to take your business down the digital highway.
Digitisation happens when you create a digital representation of physical objects. In other words, digitisation is about converting something non-digital into a digital representation or artefact. For example, when you scan a paper document and save it as a digital document you're digitising it or when you capture hand-written notes into a word-processing application like Microsoft Word.
Digitisation and digitalisation are closely associated. They are often used interchangeably but they are two different things.
Digitalisation is the process of leveraging digitisation to enable, improve or transform business processes. That means that digitisation is a key requirement to effectively digitalise your processes. The term refers to the use of digital technologies and data to create revenue, improve business and create a digital culture where digital information is at the core. It converts processes to be more efficient, productive, and profitable.
- Uploading a PDF document from a computer's hard drive to the Cloud and sharing it with many people
- Uploading digital movies from CD, DVD or Blu-Ray discs to online services. People can download or rent them.
Digital transformation is the profound transformation of business activities, competencies and business models to fully leverage the opportunities of digital technologies. The main goal is to improve efficiency, manage risk or discover new monetisation opportunities. Digital transformation is, simply put, doing things in a new (digital) way.
- Reading the data from an online PDF or moving the data from a Google Sheet into an app or system that will analyse the data. The goal is to generate insights to offer new products or improve customer service. This process doesn't need a lot of human interaction because it is automated. As a result, it enhances efficiency, reduces costs and may lead to increased sales.
- Streaming movies online. Collecting data from clients to analyse it, preparing individual recommendations, offers and advertisements.
- A company has personal information about many customers. Other companies have to verify personal information to do business (e.g. banks, insurance companies, cellphone operators). Based on the customer information it possesses, the company provides an identity verification product for other companies who want to verify a person’s information and since the company has so much customer information, other companies likely use this identity verification product.