What is the difference between digitization, digitalization and digital transformation?

When talking about innovation and the need for companies to deploy new technologies to survive in the competitive market four terms frequently appear. These are digitization, digitalization, digital disruption and disruptors.

We will focus on disruptors further on, but the first three terms are sometimes used indistinguishably. Disambiguating these concepts does not just clarify the meanings but helps us grasp the potential of fully transformative digital strategy.

What is the difference between digitization and digitalization?

Gartner defines digitization as "the use of digital technologies to transform a business model and create new revenue and value opportunities; it is the process of transitioning to a digital enterprise."

Accordingly, a digital enterprise is the result of multiple digitization processes and a step toward digital transformation.

But just as digitization leads to digital transformation, the former cannot take place without digitization.

Digitization goes back to the basics. It is the transformation from analog to digital. Digitization uses digital technologies to impact productivity, work processes, revenue streams and customer loyalty. Digitization is the optimization of processes, such as the conversion from paper to digital files.

What is the difference between digitization and digital transformation?

Digitization and digital transformation belong together. The former is a strategy that implements technology and implies a profound change in an entire business model. The latter, on the other hand, implies a cultural change that goes beyond the company.

Digital transformation is customer-centric, focusing on user and customer engagement, organizational change through leadership, and employee empowerment.

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