I was having this discussion with a friend (let us call him Watson, shall we?) on digitalization & emerging technologies and how it was helping in the times of current crisis. During that week Siemens was conducting the Digital Enterprise Virtual Summit (The event has now concluded, but you can register and watch the recording here) and suggested him to attend the virtual conference to gain more information on digitalization and its applications.
Is it digitization or digitalization? He queried.
Interesting question, I thought to myself. I had always used digitalization in discussions with colleagues and friends but have seen people in the industry use both digitization and digitalization interchangeably.
Scholars across disciplines use the term digitization to refer to the technical process of converting streams of analog information into digital bits of 1s and 0s with discrete and discontinuous values [1]. In simple terms we can define it as the process of converting something into digital form. This something could be analog signal from a transmitter, logs, attributes of an equipment, information in documents, music, photos etc.
Once the process is done, we get a single store of all data called a data lake. This data lake includes raw copies of source data in digital form and the transformed data. With the right techniques and vision in place, it is possible to extract useful information from this data lake for usage in tasks such as reporting, visualization and advanced analytics. This can be used to enable, improve or transform a business process by leveraging digital technologies and the digitized data.
Voila! Digitalization.
As Gartner [2] defines it, digitalization is “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.”
So, in a business context, an organization that seeks to become Digital might focus on the automation of processes with the objective of making them more efficient. By contrast, a company focusing on Digitalization, might aim to realize more effective outcomes from those processes. As SAP [3] points out, you would digitize a document, but you would digitalize a factory.
In Siemens [4], Digitalization is the process of connecting digitized information via digital twins and the digital thread to gain detailed insights that can be used to transform business processes and create new opportunities for product innovation. First, the process begins with digitization. Next, digitized information is used to build digital twins, which are virtual representations of physical products, production processes, and operation performance.
The data relationships between digital twins, and the ways in which they inform and influence each other, is known as the “digital thread.” Analyzing the digital thread and using the resulting insights to improve products and processes across an enterprise is digitalization. This was what I was referring to in my discussions with my friend Watson and my answer to his query was:
Digitalization, My dear Watson!
A version of this article was first published on LinkedIn (https://www.linkedin.com/pulse/digitalization-my-dear-watson-pramod-rao/)
REFERENCES
[1] Scott Brennen and Daniel Kreiss – Culturedigitally.com
[2] https://www.gartner.com/en/information-technology/glossary/digitalization
[3] https://news.sap.com/2016/05/digitization-vs-digitalization-wordplay-or-world-view/
[4] https://www.plm.automation.siemens.com/global/en/our-story/glossary/digitalization/25216
IMAGE SOURCES
ihearofsherlock.com
ibmbigdatahub.com
siemens.com
