What’s the difference between digitalisation, digitisation and digital transformation?

Digitalisation, digitisation and digital transformation are three words that sound very similar but have totally different meanings. We’ll take a look at the differences here.

What is digitisation?

Digitisation is the process of converting information from a physical format to a digital one. It means converting something non-digital into a digital representation to be used by computer systems and automate processes or workflows. Digitisation enables to creation of business value, which needs data. It helps to lay the foundation for business use cases that leverage the data.

Examples:

• Scanning a paper document and saving it on a computer’s hard drive as a digital document, like PDF.
• Going from notes on paper to typing them up in an Excel spreadsheet.
• Converting from analog VHS cassettes to CD, DVD, or Blu-Ray discs containing digital data.

What is digitalisation?

digitalisation refers to enabling or improving processes by leveraging digital technologies and digitized data. One definition of the word is the utilisation of digital technology in order to streamline and change processes. Customer service is one example. Many businesses have moved from a telephone-based service to a digital solution in the form of a chat facility directly accessible online. Some even use an AI-based chat solution which does not require personnel. Although the method of providing customer service is the same as ever, the process of creating a case has become more seamless since the introduction of digital technology.

Digitalisation of a company needn’t entail digitalisation of the entire operation and is usually a means of making certain processes faster and more straightforward.

Digitalisation increases productivity and efficiency while reducing costs.  Digitalisation improves an existing business process or processes but doesn’t change or transform them.  That is to say, it takes a process from a human-driven event or series of events to software-driven.

Examples:

• Uploading a PDF document from a computer’s hard drive to the cloud and sharing it with many people to analyze the data;
• Converting an Excel spreadsheet to a Google Sheet stored in the cloud. The platform provides a structured environment where the documents can be shared among several users. Still, a Google Sheet itself requires human interaction to keep it up to date.
• Uploading digital movies from CD, DVD or Blu-Ray discs to online services. People can download or rent them.

What is a digital transformation?

Digital Transformation takes place when a company carries out digitalisation of its entire operation, and is thereby a more extensive and wide-ranging process. Digital transformation may involve the gradual digitalisation of internal processes until the company has fully completed the digitalisation process. There is no exact template outlining how digital transformation should be carried out, and how long it takes, but a strategic, goal-orientated approach is a common feature of every process.

Examples:

• Reading the data from an online PDF or moving the data from a Google Sheet into an app or system that will analyze the data. The goal is to provide us with insights to offer new products or improve customer service. This process doesn’t need a lot of human interaction because is automated. As a result, it enhances efficiency, reduces costs, and may lead to increased sales.
• Streaming movies online. Collecting data from clients to analyze it, preparing individual recommendations, offers, and advertisements.