Digitization vs digitalization
What is digitization?
Digitization is a relatively straightforward concept to understand. Any time you translate something – for example, by scanning a photo or a document – into bits and bytes, you are digitizing that object. Scanning a document into a digital archive creates a digitized version, encoded with ones and zeroes, without altering what is written in the document or activating it in a process.
Any time you translate something into bits and bytes – for example, by scanning a photo or a document – you are digitizing that object.
Digitization took off with twentieth-century computing and its requirements for data storage, processing, and transfer. This shift from mechanical and analog electronic technology to digital technology is the driving force of the Digital Revolution, also known as the Third Industrial Revolution. To understand how pervasively digitization has already permeated our lives, consider this fact: in 1986, 99.2% of the world’s storage capacity was analog; however by 2007, 94% of the world’s information storage capacity had shifted to digital. By no small coincidence, the figure from Google Analytics shows a distinct drop in Internet searches for information on digitization by 2007.
What is digitalization?
The upfront effort required to digitize objects and assets positions businesses and industries to carry out digitalization. Data from throughout the organization and its assets is processed through advanced digital technologies, which leads to fundamental changes in business processes that can result in new business models and social change.
When data from throughout the organization and its assets is processed through advanced digital technologies, which leads to fundamental changes in business processes that can result in new business models and social change.
The Gartner Glossary 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.”
It is noteworthy that the rise of digitalization coincides with the acceleration and mass marketing of new digital technologies, like cloud computing, machine learning, artificial intelligence, business intelligence, and the Internet of Things, in the last decade. Emerging digital technologies are fundamental to advancing automation in the Fourth Industrial Revolution, a term first introduced in 2015 by Klaus Schwab, executive chairman of the World Economic Forum, and the 2016 theme of the World Economic Forum Annual Meeting in Davos, Switzerland.
Source: SAP insights