Digitization vs. Digitalization: What’s the Difference?

Digitization vs. Digitalization

What is Digitization? | What is Digitalization? | How They Can Transform Businesses |

By using the Internet, entrepreneurs are able to accomplish nearly any task that they pursue. This is especially true when it comes to the overall productivity of their business.

But, not everyone understands everything they should about digitization vs. digitalization.

Not sure where to start? Don’t worry, we’ve got you covered.

Let’s take a look at everything you need to know.

What is Digitization?

Put simply, digitization is the shift from analog platforms and methods to digital ones. This is most commonly seen in businesses when it comes to accessibility for product or service manuals.

In the past, it was customary for people to refer to a physical manual in order to resolve an issue. For example, a product that wasn’t functioning correctly could often be remedied by consulting the manual. At the very least, users were likely to be able to find a solution by calling the manufacturer. Some manufacturers even had a list of certified technicians that buyers could call if they needed to.

When interacting with customers, businesses kept physical files of everyone they interacted with. This included information like their name, address, occupation, and past issues they’ve had with the product or service.

They also kept information about the type of products their customers used or purchased in the past, allowing the company to get a better understanding of the customer’s needs.

Today, though, thanks to digitization, all this information is easily available in a digital format. As you may expect, this makes it far more accessible than it would be otherwise.

What is Digitalization?

Although this term sounds similar digitization, digitalization is the process of making the most of information that’s been converted from analog to digital.

Fortunately for businesses that need to make the most of it, the potential applications are virtually limitless.

Here’s an example of digitalization: customer data collected through digital methods can be used to better understand the individual and provide them with a better level of service in the future.

This is particularly useful for companies with a high number of repeat customers, as they’ll be able to ensure that each experience is better than the last.

Businesses are also able to use this information to resolve issues that would otherwise occur on a consistent basis.

Digitalization has made this type of service available to smaller businesses as well, which can benefit greatly from this since they can refine their service as quickly as possible.

How Can Digitization and Digitalization Transform Your Business?

Digitization enables you to collect data through digital methods and digitalization helps you find ways to use this data to benefit your company, and take your business to the next level.

Digitization and digitalization are both crucial for the development of your business. In fact, they are the most beneficial investments you can make into your company.

Let’s explore a few of the most notable ways that hey can empower your business.

1. Predictive Maintenance

With digitalization, you can implement predictive maintenance under the right circumstances in order to resolve issues before they even begin.

By utilizing data obtained both from customers and product performance via digitization, you can develop an understanding of when repairs will be needed. This is the digitalization upgrade that allows your business to schedule repairs during the most convenient times.

This is commonly seen within the automotive industry, where maintenance is scheduled well before any outstanding repairs become necessary.

Predictive maintenance accomplished two main tasks:

  • Prevents downtime due to damaged/malfunctioning products
  • Maintains a steady revenue stream through repairs

The latter point may not always come into play due to some businesses offering warranties, free repairs, etc. Instead, predictive maintenance will ensure that customers remain satisfied with the company and are more likely to purchase from them in the future.

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2. Augmented Reality (AR)

Augmented reality is a perfect example of digitization and digitalization working together. Business owners can implement AR in a handful of different ways depending on which industry they’re in.

In real estate, for example, buyers can use augmented reality to view a showing of a home without ever stepping foot inside the house.

This is also highly beneficial for sellers, as they’re able to virtually ‘stage’ their home without the normal inconveniences that come with it. This is digitalization at its finest.

In other cases, a company may integrate augmented reality as a method to help their audience have a better understanding of their products. A common scenario would be to use AR to help users set up products correctly, resolve common issues they may encounter, etc.

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3. Artificial Intelligence (AI)

Perhaps the most useful way that customer data obtained via digitization can be utilized effectively in a digitalization process is through artificial intelligence.

Through the implementation of AI, companies can automate a large segment of the customer service process and lay the foundation for a better overall experience. One of the most efficient ways to do so is to analyze past customer behavior.

For instance, a digitalization process can be implemented to use this data to connect a customer with the right type of service representative based on their needs.

Even basic information can be collected by AI and used to improve the customer experience. In a scenario where a customer needs to have a product repaired, AI can determine the customer’s geographic location and then connect them with the closest technician.

The technician will also have a notable amount of data on the customer before they even arrive, allowing the entire process to become as streamlined as possible.

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Understanding Digitization vs. Digitalization Can Seem Difficult

But it doesn’t have to be.

With the above information about digitization vs. digitalization in mind, you’ll be well on your way toward making the decision that’s best for you and your business.

Want to learn more about how we can help? Feel free to get in touch with us today to see what we can do.

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