What is digitalisation and how is it different from digital transformation?
Digital transformation is the process of change within society or industry that is brought about by the adoption of new technologies, which cause changes in the way people behave, interact and live their lives.
There are many definitions for digital transformation and it is often used interchangeably with digitalisation, but the two are quite different. Digitalisation is the process of converting physical information into digital information – moving from analogue to binary, from manual to automated.
You can think of it like this:
Digital transformation deals with the big strategic picture of how changes in people’s behaviour, resulting from the adoption of technology, impacts business and society. Digitalisation deals with the tactical implementation of new technologies to modernise processes, operations, functions and so on.
An example of digitalisation would be a hospital implementing electronic sensors to automate the monitoring of patient health, rather than relying on nurses taking regular measurements manually. While this is a radical change, it is not digital transformation.
In this context, digital transformation would be the hospital responding to the increasing demands and expectations of patients and other stakeholders, resulting from the development of new technologies. The hospital may choose to replace all their electronic sensors with new generation sensors that connect to the internet (the Internet of things). These sensors gather patient data in real-time, upload it to a cloud-hosted database, have AI produce big data analytics and feed the insights back to doctors and nurses via mobile apps. The insights can then be used to tailor highly responsive health care practices and methodologies, deliver care to more patients but with fewer medical staff and, offer preventative medical treatments that are not currently possible.
In this hospital example, digitalisation is a change in the application of technology within one specific area to improve the efficiency or effectiveness of nursing staff. The digital transformation example shows a bigger strategic change that impacts a wide range of processes, systems, operations, functions, resources, job roles and so on – a complete overhaul of the delivery of healthcare.
Several industries, such as the music industry and print media, are experiencing severe disruption due to digitalisation. Considering the wider business community, many organisations are not ready for digital transformation because the process of digitalisation is still to take place. This is the much-needed base layer upon which to build digital transformation programmes. The future will see many more companies experiencing digital disruption and undergoing change.
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