Rapid technological advancement has changed the world.
As the corporate world shifts to accommodate the exciting features of the digital age, words like Digitisation, Digitalisation and Digital Transformation are used frequently.
But what exactly do they mean, and what is the difference between the three?
Let's split the digital journey into three stages.
Stage 1: Digitisation
The first thing you'll need to do in your journey is digitise.
Digitisation refers to the conversion of information from analog to digital formats. There is no change to the process – only the format is changed.
Examples of digitisation include:
Scanning documents to save it as a PDF
Converting old analog media to digital
Manually keying in customer information from hardcopy feedback forms
Without clearing this stage, you cannot move on to the others.
Stage 2: Digitalisation
Digitisation is the basic first step in your digital journey.
To really get started, you'll need digitalisation, which is the process of using available technologies and information to drastically improve the efficiency and revenue of a business.
Examples of digitalisation include:
Storing and managing all data in a cloud, which can be accessed by all authorised staff regardless of their physical location
Personalising email marketing such that an email is sent every time a customer meets certain requirements, e.g. 2 months since last purchase
Submitting payment through digital wallets and online payments (like PayPal or internet banking)
Digitisation VS Digitalisation
Digitalisation and digitisation are often mixed up.
To differentiate them, just remember this: Digitisation involves only conversion and nothing else, while digitalisation creates value for businesses.
Stage 3: Digital Transformation
Time to take your business to the next level – time for digital transformation, which is when businesses change their business models and operations to incorporate technologies.
Many of the services we know and love are products of digital transformation.
Examples of successful digital transformation by businesses include:
Netflix, which revolutionised the movie rental industry with subscription-based streaming through personal devices
Uber and its pivotal role in the gig economy; first with ride-sharing and private hires, then with food delivery, all from your mobile phone.
Did you notice a similarity between the two?
Both businesses changed the status quo.
Using technological solutions, they changed the way we interact with these industries and set a new standard for their competitors.
This is the main difference between digital transformation and digitalisation – both bring value to the organisation, but digital transformation has a larger societal impact.
Is it Digitisation, Digitalisation or Digital Transformation?
Now that you know the meanings of digitisation, digitalisation and digital transformation, put your new knowledge to the test!
Do you know which of the following are examples of Digitisation, Digitalisation and Digital Transformation?
At its peak, there were a maximum of 1,426 COVID-19 cases in a day in Singapore, with most of these cases being from dormitory clusters.
To control the outbreak, the government intensified monitoring efforts in dormitories across the country.
One of these efforts is a COVID-19 chatbot that:
Reminds residents (in their native language) to monitor their health
Immediately informs healthcare practitioners when residents report abnormalities
This sped up monitoring and intervention (when needed), and alleviated resource constraints.
In a cutthroat industry like F&B, success often relies not on the food alone, but rather, the entire customer experience.
Starbucks has decided to do this through technology, and for consumers, the main impact of Starbucks' digital strategy is felt through the Starbucks Mobile App.
The app is integral to the Starbucks experience.
Everything that can be done in-store can be done through the app, but in an even more personalised way. Through the app, customers can order, pay, track loyalty rewards, and receive personalised recommendations.
This, together with the use of technology to prevent unnecessary delays from equipment failures and delivery delays, improve the overall customer experience, increasing customer loyalty and brand reputation.
You found an old cassette tape from your parent's childhood, and want to help them preserve the memory.
After gathering the necessary tools, you manage to convert the content from analog to digital, making it easy to store and view on your computer.
CHECK YOUR ANSWERS!
Example 1 refers to Digitalisation.
Although the chatbot has been incredibly useful, the scenario simply makes the entire monitoring process more effective, and (at the moment) does not impact the way medical staff monitors health or administers healthcare.
Example 2 refers to Digital Transformation.
In this case, technology is not just a tool that is used to improve processes – it is a key strategy that can no longer be separated from Starbucks' operations and business model.
Example 3 refers to Digitisation.
The content and how it was collected did not change – all that changed was the format of the content.
Think about where you are at and what you can do to digitally transform yourself and your business.
Plan out a digital transformation strategy, which should include digitising processes, training yourself and/or your employees in digital skills, and reevaluation of your business model to stay relevant in Industry 4.0.
Written by: Chloe Thio (Gen Infiniti Academy)