What are digitization, digitalization, and digital transformation, and what’s the difference between the terms?

Is your company digitizing its data? Maybe you’ve already progressed to digitalization? Is your business paving the way through digital transformation, or perhaps even threatened by it, given the fact that you’ve not completed the process and now everything is online for the unforeseeable future?

The 21st century ushered in a new era of technology that’s been reshaping everyday life, facilitating outdated processes, and giving rise to entirely new business sectors.

Some of the most common catchphrases being tossed around are digitization, digitalization, and digital transformation. However, there’s been persistent confusion regarding the difference between these terms, or that there is even a distinction to be made.

And yet the difference is significant, and should be taken into account when discussing what kinds of changes your business is – or should be – making.

Difference between digitization, digitalization, and digital transformation

Digitization: Transitioning from analog to digital

This is where it all began. Years ago, and sometimes still today, business processes were analog. If you had a device in need of repair, you’d call the manufacturer, who would fill out a work order form explaining your issue.

A service technician would be assigned the task of making a field visit to assess, and hopefully repair the issue.

All customer files, product manuals, repair handbooks were hard copies. This meant that the service technician would arrive with a stack of paper that might include anything from the customer’s name and address to the product’s history and a listing of replacement parts to a date book listing the day’s appointments.

Digitization is the process of making all of this information available and accessible in a digital format.

Digitalization: Making digitized information work for you

Once analog data has been digitized, there’s enormous potential for applications that facilitate standard work practices.

Field service providers can implement field service management (FSM) software to make smart use of digitized information.

For example, centralized data about customers including contact information and product history help service technicians stay informed about their customers’ previous issues and what types of problems they might encounter, meaning they come prepared with an arsenal of current and background knowledge to assist in a smooth field service operation.

In addition, information collected from different service technicians about the same or similar products can be compiled to create checklists for resolving recurring issues. This kind of knowledge sharing can also extend to product manuals and video tutorials that are available on any mobile device. All these types of tools ensure that technicians in the field have access to as much information as possible to guarantee a first-time-fix.

Digital transformation: COVID-19 has clearly defined (and rewarded) the businesses that have undergone digital transformation 

Digital transformation is the process of devising new business applications that integrate all this digitized data and digitalized applications.

Thanks to digitization and digitalization, data is easily accessible for use across various platforms, devices, interfaces.

Consider the example of Netflix and Blockbuster: once films were digitized, the path was paved for a completely new business model – movie streaming.

These are the biggest game changers when it comes to digital transformation:

  • Artificially intelligent FSM: Using artificial intelligence, field services can be optimized to ensure the quickest service is performed by the most qualified technician. By quickly calculating a customer’s location and the location of available field service technicians at any given time, and cross-referencing this information with the technicians’ skill sets and expertise, AI powered FSM software can dispatch the best man or woman for the job in real-time.
  • Augmented reality tools: Though AI applications ensure that the technician most suited for a task is assigned, no one can know everything. That’s why combining augmented reality tools with a database of video tutorials, manuals, and even offsite experts is changing the way field service technicians tackle complex issues, and redefining the field service sector.
  • Predictive maintenance: Thanks to sensors programmed to measure specifications like temperature, wear and tear, and a slew of other indicators, machines are now able to transmit warning signals well in advance of breakdowns and malfunctions. This makes it possible to schedule repairs at convenient low productivity times, and to avoid costly downtimes.
  • Crowd sourcing: One of the most popular and widespread applications of the digitalization of services has been the sharing economy. The same thing has been happening in the field services sector.An increased number of tasks resulting from predictive maintenance, combined with a desire to keep overhead costs low, has led to the concept of crowd service: a pool of certified and qualified service technicians consisting of the company’s own employees as well as the company’s partners and subcontractors, and skilled freelancers.The crowd is integrated into the AI-powered Field Service Management software, guaranteeing that someone is always available in real-time to meet customer demand. And since these service technicians are compensated by service and are not full-time employees, service providers can keep their overhead costs to a minimum.

These new digital transformation business innovations revolutionizing an industry are also leading to huge savings in the most valuable corporate resources: time and money.

However, as with any revolution, there will be clear winners and losers. Companies unable to keep pace with the digital transformation run the risk of becoming obsolete, the next Blockbuster so to speak.

The Digital Age has only just begun to change how we work and play. There will be plenty more innovations and just as many new terms for us to learn and distinguish amongst. As digital transformation redefines business, just remember we have digitization to thank for it all!

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