Digitization V/S Digitalization
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Industry 4.0 Digital Transformation
DIGITIZATION V/S DIGITALIZATION
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Let's explore to clearly understand the differences between these two similar terms, which are Digitization and Digitalization.
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Let's start with a simple step . . . and that is to start with a?question.
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Before moving forward into the detailed aspects of a concept;
Let's start with a simple step . . . and that is to start with a?question.
■ Let's start with a question!
■ But, why start with a question??
■ Because a question bounds us to think.
■ Think in different directions and with different perspectives.
■ A question ignites curiosity, to learn and understand.
And every question has an answer.
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■ Let's try to visualize the term "Digital Transformation".
■ While visualizing the term "Digital Transformation", what is the 1st thing that comes to your mind about the word " Digital Transformation"?
■ Let's think in different directions and visualize with diversified perspectives.
■ To make it systematic, let's align these directions and perspectives with the business requirements, market environment, technology landscape, industry trends, hypes, and buzzwords.
■ This very 1st step to visualize "Digital Transformation" enable us to establish the link between Why? & What? of "Digital Transformation".
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■ Let's focus on the 1st part of the term "Digital Transformation", that is "Digital".?
■ The initial part of the term, simply highlights that it's about Digital and it starts with zero and one, which is the representation of the electronic state of information in digital format.?
■ As most of the phenomena happening in our surroundings are analog in nature, which invites the process step of Analog to Digital Conversion.?
■ This step is crucial to process digital information at different stages, ranging from generation, transmission, storage, analysis, and action.
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■ While progressing toward understanding the term "Digital Transformation" we are going to interact with other similar terms, which are "Digitization" and "Digitalization".
■ Though both the terms are very similar and arise from the root term "Digital", but still have different meanings, purposes, and importance as a part of the Digital Transformation Journey.
■ Whereas Digitization is the very 1st step of Analog to Digital Conversion.
■ On the other side Digitalization is the successive step after Digitization, where we utilize the digital format of information in broader and diversified aspects.
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■ Let's explore further to clearly understand the differences between these two similar terms, which are Digitization and Digitalization.
■ To explain the term from different perspectives, we have defined 7 differentiation factors.
■ These differentiation facts elaborate, on both terms individually with examples.
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7 Differentiation Factors for Digitization v/s Digitalization.
■ These 7 differentiation factors are; Focus Area, Target / Goal / Purpose,?Activity, Tools, Challenge, Use Case Example, and Strategy to implement individual steps.
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■ The Focus area for Digitation is data conversion, which means analog to digital conversion.
■ As in our routine life, we deal with the analog nature of physical attributes, e.g. temperature, velocity, flow, pressure, time, etc.
■ By applying digitization we are able to capture these physical attributes in digital format, so we would be able to utilize this digital information for successive steps towards digital transformation.
■ Whereas the focus area for Digitalization is to create a process flow by utilizing the digital format of information results from digitization.
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■ The target for Digitation is to capture and convert the Analog format of information to the Digital format of information.
■ Whereas target of digitalization is to automate the existing business operations, by utilizing the digital format of information.?
■ Digitalization is always targeted for information flow, process flow, and automation flow to bring efficiencies in business operations.
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■ Activities associated with digitization are capturing the analog format of information from physical attributes and converts into a digital format of information.
■ Whereas Digitalization is involved in the creation of a complete digital workflow.
■ For example, capturing time in digital format is about "Digitization", whereas automatic scheduling of a repeated event/action, at a certain time interval is about "Digitalization".
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■ The process of digitization requires capturing physical attributes by using tools, such as computers, Data Loggers / Recorders, Sensors, and Transducers.
■ Whereas Digitalization utilizes the tools in the form of software applications (e.g. ERP, MES, IIOT Platforms, etc.), which utilizes the captured digital format of information as an input and performs certain tasks, as per the intended use/output of a software application tool.
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■ Challenges associated with the digitization process step are the huge variety of physical attributes.
■ Consequently, we have to use different types of data loggers/recorders, sensors, and transducers to capture these diversified forms of physical attributes in different volumes.
■ Whereas the challenge associated with the digitalization process step is to access and forecast the Business Model and Return on Investment while deciding to develop or purchase a software application tool.
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■ An example of Digitization is converting paper-based information into digital form by scanning the paper.
■ In this example capturing information on paper is the representation of the analog form of information, and scanned information is in digital format.
■ Whereas digitalization is about the implantation of an online and automatic electronic form of the registration process, where we can reuse the information for multiple purposes and applications.
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■ Strategy with Digitization is focused on selecting a specific type of physical attribute and implementing the digitization process at a large scale/volume and moving on to select another type of physical attribute.
■ Whereas strategy with Digitalization is focused on building 1st Business/use case and achieving the expected returns on investments in the stipulated time frame and moving on to define and replicate the best practices while defining and initiating other business/use cases.
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A knowledge artifact by -?KULDEEP KAUSHIK
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