Digitization, digitalization, and digital transformation are often used interchangeably. However, the truth is that despite the similar spelling, these terms have different meanings.
Keep reading as we look into the three concepts and how they are linked.
What is digitization?
Digitization refers to the process of converting physical objects into digital assets. In other words, changing them from analogue to digital form.
Scanning a paper document or a photograph to save it into an electronic format is an example of digitization.
The main reason behind digitization is that electronic data is easier to analyze, transmit, and store. From a business perspective, digitization is essential to transforming paper-based and manual processes into digital ones.
What is digitalization?
Digitalization is the optimization of processes with the help of technology.
Automating document signing with the help of a digital signing solution is an example of digitalization. Instead of manually sending the contract to each signatory, you can simply set up document routing rules in the platform. The software will ensure that the contract reaches the right people in the correct order without any manual intervention.
What is the difference between digitization and digitalization?
Digitization is about converting data to a digital format. On the other hand, digitalization is about using technology to optimize business processes.
Converting the information is just the first step. The new digital format creates the need to involve different technologies in the process, ultimately reshaping the way we do things.
Besides helping companies reduce manual work and cut costs, digitalization improves overall performance and client satisfaction.
Different tools and software allow automating big chunks of repetitive work – not only in manufacturing and production but also within finance, sales, marketing, HR, and other business functions.
What is digital transformation?
Digital transformation is about the organization as a whole. It is often referred to as the radical change of business operations and culture with the help of technology.
It takes more than going paperless and embracing online meetings. Digital transformation is about integrating technology into every area of the business.
With the growing impact of technology on our lives – buying groceries while sitting comfortably on the sofa and accessing financial accounts from a phone app – customers’ needs and expectations change.
Improving processes to stay competitive, meet new demands, and enhance the customer experience are some of the reasons why companies start their digital transformation journey.
However, organizations can’t just change overnight. Digital transformation requires a solid foundation of digital activities, strong organizational culture, alignment, and collective efforts.
Trying to integrate technology across the entire organization, securing acceptance, and ensuring that the business culture facilitates the change is an impossible task. That is why you should do one thing at a time instead of everything at once.
As companies have different purposes, strengths, objectives, and challenges, it is crucial to understand what digital transformation means for your business and build your strategy based on that.
To recap: Digitization, digitalization, and digital transformation have different meanings.
- Digitization represents the analog to digital conversion of data, documents, information, etc.
- Digitalization is the use of digital technologies to make a process more efficient.
- Digital transformation is the integration of technology into all areas of an organization.
How can Penneo help you get one step closer to your digital transformation goals?
Penneo Sign & Penneo KYC are two digital solutions that can help companies get one step closer to their digital transformation goals. Here’s how.
Penneo Sign
Penneo Sign is a digital signing and data collection software that helps companies automate their signing processes. With Penneo Sign, you can:
- Automatically route documents to signers with the help of predefined rules
- Sign documents digitally from your phone, tablet, desktop computer, or laptop
- Send automatic reminders to the people who didn’t sign
- Sign multiple documents in one go
- Build API integrations to automate data imports
- Set up automatic data deletion for documents
- Create shareable PDF forms to safely collect data from employees, business partners, and clients
Penneo KYC
Penneo KYC is a digital tool that helps companies automate customer due diligence. With Penneo KYC, you can:
- Automatically screen customers against PEP and sanctions lists
- Automatically identify the beneficial owners of a company
- Carry out guided risk assessments
- Automate data imports with the help of integrations
