If you search on Google for “Digitalization in Pakistan”, many websites will show you other similar terms as well such as “Digitization” or “Digital Transformation”. In fact, there is a bit of confusing information everywhere on internet especially for those who don’t know much about digitalization. Unfortunately, these similar terms are often misinterpreted and used one for the other without understanding actual meaning.
Consequently, the confusion would end up in wrong transformation strategy while wishing to move your business towards digitalization. Therefore, one must understand the difference between these commonly used terms i.e. digitalization, digitization and digital transformation. So let’s explore each term one by one to understand in a better way.
What is Digitalization? Use of Modern Technology to Improve Business Activities
A number of definitions circulating over internet making it even more complex to understand what digitalization actually is. Let’s check out from one of the most authentic sources instead of moving around with meaningless definitions.
Gartner Glossary of information technology says “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”.
As a business leader, when you intend to revolutionize your business, you choose to use digital technologies. Above all, you use technology in every aspect of your organization from software, programs and machines to marketing strategy, product delivery and human resources. Additionally, you try to analyze the data to find new avenues to increase revenue.
What is Digitization? Conversion of Information into Digital Format
Now you know what digitalization is but you still need to know what digitization is. Basically, digitization is the process of converting information into digital format. For example when you scan a printed document, it is converted into digital formation. Now it can be stored on hard-drive/ cloud computing or shared with others through emails, messages, whatsapp etc.
- Scanning printed documents, reports and photographs
- Converting documents into DOC or PDF formats
- Recording video meetings and conferences
- Creating digital attendance register for staff members
- Keeping meeting minutes in editable form
Digitalization is not Possible without Digitization of Information
What is Digital Transformation? Changes in Entire Organizational Setup
Digitalization is the process of using digital technologies to resolve prevailing issues. On contrary, digitization is the process of converting information into digital formats. Now you must be wondering what is digital transformation then?
Well, the word “transformation” is defined as a change in overall appearance, form or nature of something. Hence digital transformation comes up with the meaning of overall changes in organizational and cultural behavior of a business organization.
Let’s suppose you are running a taxi service in your city for the past many years following traditional business rules. Customers visit your site or book taxis on phone calls. Henceforth, your business is facing these issues:
- Lack of App: You don’t have any apps or websites for your customers so you can book the ride.
- No Check & Balance: You are not monitoring your drivers’ activities and you are not in touch with them all the times.
- Improper Records: There is no proper record of customers and your staff.
- Customers Problems: Your team is unable to determine what problems your customers are facing, what their expectations are and how you can provide those better services.
- Lack of Plan: The competition is getting tougher as the other services are already in the city and you don’t have a solid plan to deal with the competitors.
Under those circumstances, if you wish to stay in the competition, you will have to go for digital transformation. In other words, it is time to use full potential of digitalization to leverage maximum share from the competition. Let’s repeat the above terms one more time:
You need to make your mind to use digital technologies i.e creation of apps for booking and software for keeping record of your customers and staff.
For leveraging full advantage of digitalization, you need to transform your business from traditional to digital i.e overall changes in all the processes of the business.
You need to convert all the information from hard to soft version. That’s what is one of the most important parts of transformation.
Why Digital Transformation is Crucial?
It is better to understand “digital transformation” as a single point: “If you go digitalized today, you will definitely see great results tomorrow”. Explicitly, business experts and gurus have advocated that adopting digital transformation is crucial for all types of businesses.
When you digitally transform your business, you are in a position to adopt better strategies than your marketing competitors. Of course, it gives you an edge over your business foes who might not be as fast you are going to be with digital tools.
Remember that the age of traditional or direct sales is over as most customers buy through indirect sales techniques. Some of the benefits which have convinced business leaders to transform their businesses are:
- COST: Saving cost on traditional marketing methods
- COVERSION: Visitors turn into customers quickly
- REACH: There is a much wider customer reach
- ROI: Return on investment is much better
- INTERACTION: Great interaction with customers
- VISION: Company’s vision seems achievable
Other Benefits for Going Digitalized
- Economic Growth: With the help of digitalization, country’s societal and economical systems improve rapidly.
- Better Services: Government and public sectors are in a much better position to provide better services.
- Direct Connection: Digitally organized platforms are fully capable of connecting sellers with the buyers directly instead of a third person.
- Secured Banking: Banks transactions become fully secured.
- Sufficient Choices: Comparatively, customers have more choices when it comes to get the best from the available sources.
Suitable Framework for Digital Transformation of Business
Digital transformation is crucial and many know about it but what is not known by most of the business leaders is that how they are going to do it. Because it is not just some kind of computer system upgrade, it is a complete replacement of an entire system.
Every type of business may have specific demands and face certain challenges; most of them would be having some similarities. In fact, when it comes to adopting digital transformation, it is not possible to suggest same method for all. Therefore, it is always good to understand the specification of a business.
Keeping all the differences aside, at least there would be some elements which can be considered the same such as:
- Quality of Management
- Organizational Setup
- Operational Sustainability
- Availability of Manpower
- Customer Experience
1. Quality of Management
This is the first factor to consider when you decide to move towards digitalization. Review your managerial setup, remover inactive managers with unprofessional attitude towards joint organizational goals. Recruit qualified, experienced and most importantly efficient people in your team to give you a good start.
2. Organizational Setup
Once having a good team of managers, there will be much ease to ensure a great organizational setup for your business. Each and every department of your organization must be connected with each other and there should be great interaction among them. The slow-poison for your business is workplace politics. Make sure to develop harmony among the people working with you.
3. Operational Sustainability
The supply of products you are offering to the customers must be continued through operational sustainability. If the customers are not provided what they demand for, they will turn to your competitors and this will be a bad sign for your business. So as a good leader, it is your responsibility to ensure operational sustainability.
4. Availability of Manpower
The chain of problems built when a business sees a difference between supply and demand. Ensure that the difference is dealt with effective production strategies. If there is a shortage of manpower in production process, you will find it hard to curtail it. A good business does not let it happen.
5. Customer Experience
At the end of the day it is all about customer experience that how they feel with the services provided by your business. Ensuring customers’ satisfaction will help you stay in the competition and you will be able to get maximum share from the market.
There is no more need to get confused with the term digitization as it is just a part of entire digitalization process. However, it is also important to know that digitalization is not possible without proper digitization. For business owners, digitalization is an opportunity to keep their heads out of water during cutthroat marketing competition.
No matter what business you do if you don’t decide to go for digital transformation today, you will be compelled to do it tomorrow. To be very honest, it is no more a choice, it is an obligation and you can’t deny it. Besides, nobody can turn a blind eye on its benefits that are unlimited like saving on cost of production and marketing, quick conversion, high ROI AND good relationship with customers.
Every business has a vision and digital transformation has greatly increased the chances for accomplishment of all such visions. The integration of digital technology in your system would bring good luck for you and your business.