The phrase of ‘digital transformation’ already become a ‘mantra’ for recent years. Many experts say every company that not run digital transformation might endanger their business sustainability. But how well do we know about digital transformation? We might mix up definition of digitalization with digital transformation or even with digitization.
Digital transformation is not digitization or digitalization. Many businesses or companies claim they have run digital transformation, but they might only run digitization or digitalization. What’s the difference between digitization, digitalization, and digital transformation?
"Many examples we can learn from history, that some big name in business was ‘disappeared’ because late to transform."
Digitization is the move from analog to digital, the process of converting information from analog to digital. Since digital era was started, the digitization also started. All information was converted from analog to digital. At that time the job as “data entry clerk” was introduced. If your business/company, only convert all your information from analog to digital, you only doing digitization, not digital transformation. For example: the salesman converts all sales data that previously recorded on notes/book, become recorded into computer, helped by ‘data entry clerk/admin’. Today, the condition where all data is recorded in hardcopy form, should has passed. The analog era is over. But sometimes we still found many analog modes. Digitization still occurs until now. Digitization could be one of the ways that being used in digital transformation
Digitalization is using digital data, that was converted in digitization process, to simplify how you work. Digitalization is the process of using digitized information to make ways of working simpler and more efficient. Digitalization is one step advanced compared to digitization. For example: equip the salesman with mobile phone and mobile apps that enable themselves to entry sales data directly. Job of data entry admin slowly eliminated. In fact, digitalization is the one what many companies do, not digital transformation. Like digitization, digitalization could be one of the ways that being used in digital transformation
Digital transformation is bigger than digitalization. Digital transformation is the process of creating new
— or modify existing — business model (processes, culture, and customer experiences) to face changing business and market requirements, to make the business sustain, or to increase business profitability, using digital technologies. Digital transformation triggered by business challenges, led by business side and helped by IT side as critical supporting function. Digital transformation starts with defining business target and corporate objectives. Digital transformation is companywide scope.
For example: Your business now is as education provider (university). Your business challenges: due to covid-19, mass gathering was hinder. Your business objective: how to sustain after covid-19, adapt to new norm after covid. Your simple digital transformation example: prepare and implement business roadmap to convert from in-house education provider to be online academy, using digital technology. Identify all aspects that should be changed, i.e: the teaching method, tools, curriculum, exam, teacher etc. If you don’t transform, it might endanger your business sustainability.
Many example we can learn from history, that some big name in business was ‘disappeared’ because late to transform.
So, do you really need digital transformation or what you need only digitalization? If you really need digital transformation, you are better to start now. Digital transformation is a journey, need several years to be
implemented. Success of digital transformation depend on vision of the top management of the business/company.