From Digitization, Through Digitalization, to Digital Transformation.
Many articles, blog posts, and comments have been written about the differences among these three terms, so you can rightfully ask why yet one more should be written. The reason is simple: because of the practical need that humans have to communicate clearly and to be properly understood. As my example in the previous paragraph demonstrates, confusion still exists about the meaning, scope, and use of these terms.
At one time, the terms were used almost interchangeably, especially the first two--digitization and digitalization--in which the difference in spelling is just two letters. Digital transformation is a somewhat newer and more easily understood term, although it still causes semantic confusion. Digital transformation attempts to rise above the terminological ambiguity by assuming an umbrella role, encompassing digitization and digitalization as its constituting components and regarding them as rather small, but necessary, steps in the big picture of an organization's digital transformation.
Let's dig deeper into several facets of the concepts covered by each term. For clarity, each term is reviewed through five facets: focus, goal, activity, tools, and challenges. The table below gives a brief summary, with examples of each facet.
DIGITIZATION: CONVERTING FROM ANALOG TO DIGITAL FORMAT
The rise of commercially available high-resolution (600 DPI or more) paper scanners in the late 1990s was a technical trigger for the mass conversion of analog data (paper archives) to digital format. The invention of the first compact disk (CD) in 1982 offered a cheap storage and distribution medium that was used not only for storing paper documents but also for the conversion of audio and video analog formats, such as LPs, cassettes, film reels, and VHS tapes. The digitization of microfilm and microfiche was also widespread at that time. This conversion did not perhaps bring about the promised longevity of new digital formats (TIFF, DjVu, PDF), but it did provide other benefits, such as usability, the speed of access, transferability, and the possibility of further processing.
A good example of this was the digitization effort of the International Nuclear Information System (INIS). Since its creation in 1970 until 1996, INIS collected and converted to microfiche more than 312,000 non-conventional literature (NCL) reports received from IAEA (International Atomic Energy Agency) member states and international organizations. The microfiche collection contained more than 1 million items, with an estimated 25 million pages of full texts (dobrica.savic.ca/pubs/2013-GL15-DigPres-Savic-St-Pierre.pdf). This collection, after digitization, is now part of the online INIS repository (inis.iaea.org/search).
The example of INIS demonstrated several challenges of digitization, such as the volume of potential materials to be converted to a digital format, the provision of proper storage facilities, and adequate access to this facility by external users. Security and privacy became part of the regular technical and management agenda that had to be taken into consideration.
DIGITALIZATION: AUTOMATING BUSINESS PROCESSES
Digitalization has three distinct phases--the initial phase, when single operations or processes are automated (such as library purchasing); the mid-phase, when related processes are automated and joined together (such as library collection management or supply chain management); and the third, most complex phase, when multiple systems that support business processes and information flows are integrated into library management systems or enterprise management systems.
Where the initial digitization was mainly concerned with data and various converters, digitalization concentrated on the automation of various business processes and operations, as well as on information processing. IT hardware and software were powerful enough at that time to allow for the automation of existing digital work processes and the creation of completely new ones. Huge investments were made in purchasing, developing, deploying, and maintaining conglomerates of different applications dealing with numerous single issues using sometimes unrelated technologies that hardly "talked" to each other, but helped the IT departments mushroom in size, cost, and power. Siloed information and distinct, different, and sometimes redundant applications were part of the digitalized organization. Still, digitalization with the use of digital information helped lower production costs, optimize business results, and sometimes even created new revenue options and new customer experiences, such as online library catalogs and discovery tools.
INIS also spent time and effort automating some of its existing information processes, stages, and functions to make them connected, transparent, and more efficient. With more than 100,000 new records added to the existing repository each year, automation included various tasks, starting from record creation using FIBRE+ software, subject analysis and classification via computer-aided indexing (CAI), and full-text records management with the NCL Collection Management System to overall management and statistics through the INIS Reporting System. However, these systems still needed to be fully integrated and made interoperable and coherent.
DIGITAL TRANSFORMATION: CREATING A DIGITAL COMPANY
Digitalization does not result in digital transformation. Digital transformation is about doing things differently--creating a completely new business model by using modern information and computer technologies. Digital transformation leverages existing knowledge to profoundly change the essence of the organization--its culture, management strategy, technological mix, and operational setup. It places the customer at the center of all its decisions and actions.
Introducing mobile applications, artificial intelligence (AI), cloud computing, analytics, chatbots, and other digital services only augments the existing business without changing its essence. This is more of a digital business optimization than a digital business transformation. According to the International Data Corporation (IDC), digital business transformation happens when companies "pursue new revenue streams, products and services, and business models" (idc.com/getdoc.jsp?containerId=IDC_P38013).
Forrester Research predicts that within the next 10 years, 85% of all jobs will be impacted by digital transformation, so it is not surprising that the biggest resistance to this change comes, in fact, from employees who are afraid of losing their jobs, the positions they've achieved, and their status. Forrester's advice is, "Be the automator, not the automated" (crn.com/news/applications-os/digital-transformation-advice-be-the-automator-not-the-automated-).
Isaac Sacolick, in his 2017 book on digital transformation (Driving Digital: The Leader's Guide to Business Transformation through Technology. New York: AMACOM., p. 251), states:
It's not an easy transformation.... It largely depends on the culture that you're working with and how quickly leaders and managers are willing to leave sacred cows behind and adopt new practices.... Company culture is the most overwhelming factor in getting these practices instituted. The size of organizations, the number of geographic locations, the disparity in business and products, and the magnitude of legacy systems are all factors but secondary to cultural issues.
Sometimes top-level managers themselves are also obstacles. Rather than showing vision and an open mind toward digital innovation, they are overcome with fear and prefer to maintain the status quo. A good example of this is when Netflix, in 2000, proposed a partnership with Blockbuster. Blockbuster laughed at the idea. Bad response. Blockbuster went bankrupt in 2010, and Netflix is now worth more than $100 billion.
INIS is looking at making the necessary leap to digital transformation, positioning INIS as an even more valuable resource for nuclear scientists, researchers, students, and government officials around the world, by exploring various examples of successful digital transformation in the area of information and knowledge management and considering available options. Fifty years of INIS' history, 154-member states collaborating in the field of peaceful uses of nuclear information, more than 4 million metadata records, access to 1.2 million full texts, 3 million webpage views, 1.6 million searches, and 1 million unique visitors annually represent a tremendous potential that needs to be leveraged.
Digital transformation presents enormous opportunities for businesses, as well as for government and public organizations. Innovation, disruption, constant change, and rapid development are the mantras, not of tomorrow, but of today.
In conclusion, let me borrow a quote from Gartner: "The pace of change will never be this slow again" (gartner.com/en/about).
Disclaimer: Any views or opinions expressed here are those of the author and do not necessarily reflect those of his employer.
By Dobrica Savic
Dobrica Savic (linkedin.com/in/dobricasavic) is head, Nuclear Information Section (NIS) Division of Planning, Information and Knowledge Management, Department of Nuclear Energy, International Atomic Energy Agency.
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|Comment:||From Digitization, Through Digitalization, to Digital Transformation.|
|Date:||Jan 1, 2019|
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