The relationship between digitalization and digital transformation has been a topic of discussion in various industries, but do we really understand the difference between the terms? Digitalization refers to the use of digital technology to perform the same tasks or provide the same products as before. For instance, digitalization has transformed the banking sector. On the other hand, digital transformation is all about implementing new digital technologies to create different products or services. This shift in focus enables a business to transform and provide entirely different products from what they offered before.
However, despite the frequent use of these terms, many businesses struggle with understanding their distinct meanings, leading to poor strategic decisions. At the Norwegian University of Science and Technology, research has shown that both digitalization and digital transformation are intertwined. Digitalization involves the automation of tasks and processes, which in turn leads to the accumulation of significant data. The data can drive innovation and create new opportunities, resulting in digital transformation.
Netflix is a perfect example of how digital transformation can revolutionize a business. Initially, Netflix delivered DVDs through the mail within the United States. However, the company used the data obtained from its customers to streamline its operations and eventually transitioned to become a TV and film production company that creates unique content.
Businesses must focus on both digitalization and digital transformation. Achieving a balance between the two is vital for success. Specifically, businesses that invest in creating a robust organization, capturing and quality assuring their data, and developing innovative technologies such as AI are most likely to succeed. Even after 300 years of digitalization, the need for further research to address practical, organizational, and legal issues remains apparent.
Ultimately, businesses that can achieve a healthy balance between digitalization and digital transformation are more likely to succeed in the fast-paced and continually evolving digital landscape.
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Jessica Irvine is a tech enthusiast specializing in gadgets. From smart home devices to cutting-edge electronics, Jessica explores the world of consumer tech, offering readers comprehensive reviews, hands-on experiences, and expert insights into the coolest and most innovative gadgets on the market.
