Unexpected audit? That’s a bittersweet candy that can give business owners a panic attack. It’s not because they have something to hide, but because it may “look like it” — especially if you cannot find the right documentation in time. There never seems to be enough room to store all existing paper documentation, especially as businesses rely heavily on the safekeeping of their documents.
The secret to solving your documentation overflow lies in two similar sounding yet conceptually different words:
Dig·i·ti·za·tion and Dig·i·tal·i·za·tion
According to an article by Jason Bloomberg, “Digitization, Digitalization, And Digital Transformation: Confuse Them at Your Peril,” these two words are often used interchangeably. The result? We get confused about what each word really means.
Business managers, however, must be able to understand and distinguish between these terms, since how they are applied can significantly affect whether or not they improve business functions.
What is Digitization?
Digitization is the process of changing from analog to digital form. There are various examples of digitization in enterprises today, as there have been for many decades. Converting handwritten or typewritten text into digital form is one example of digitization.
What is Digitalization?
Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities. Digitalization is transforming the world of work as organizations implement ‘digital technologies’ – which in this context means computers and other information technology – people’s jobs change.
So, both digitization and digitalization are processes that can improve business operations. However, they target different sides of business. On one side, digitization improves actual business processes by transforming them from analog into digital form, whereas digitalization emphasizes the use of technology to create change in behaviour at work.
Furthermore, if we look at the transition process, we can see that digitization could become the first step of digitalization. For example, let’s consider the financial industry and its heavy dependence on the documentation of daily operations. It is much easier to find information in stored electronic databases than through mountains of paper files in a file room. For such a firm to go entirely paperless would mean two steps:
- Digitization of all the paper documents and file rooms through the employment of a scanning solution. This would turn existing documents into electronic ones which can be easily filed in a digital database.
- Establish procedures and train mployees on how to utilize the new database for filing and retrieving documents more effectively. This adoption process by your workforce requires more time and resources but is vital to the digitalization of your business.
Digitizing one of your business processes can help improve your workflow and get your business started on the path towards full digitalization!
To learn more about Business Digitalization read the following a case study: MY Capital
- File management process resources and nice-to-knows: To learn about Digitization, check out this book “The Design Thinking Playbook: Mindful Digital Transformation of Teams, Products, Services, Businesses and Ecosystems” by Michael Lewrick
- To learn about Digitalization, check out this book “Driving Digital Strategy: A Guide to Reimagining Your Business” by Sunil Gupta
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