Welcome back to our three-part series on digital transformation. In our first post, we talked about the three stages of digital transformation and focused on the first stage, digitization. Hopefully, it helped you see just what digitization means and why your business needs to digitize its data and documents like...yesterday.
Yep, it’s that big of a deal.
Let’s briefly recap what digitization means just so we’re on the same page. Recall that digitization is the modernization of how you create, access and share information. That includes converting paper documents into PDFs, VHS tapes to digital files, and music cassettes and CDs into MP3s. Finally, we contrasted digitization versus the old ways of creating and managing data and documents by comparing it to what Amazon Kindle is to libraries, what Spotify is to record stores, and what Netflix is to movie theaters. And if you want to get even more current, it’s what NFTs and bitcoin are to money.
In short, digitization optimizes all of your forms of data by making them quickly and easily accessible and shareable on computers, tablets and smartphones. It’s an absolute necessity and will change how you’ve done things in the past. Fortunately, the efficiency and cost savings make it a no-brainer.
To remain competitive, though, you must move forward on the digital transformation path to the second stage of digital transformation, which is digitalization.
Digitalization optimizes business processes
Digitalization is dependent upon digitization having already occurred in your business. Once completed, you will gain access to digital tools that will streamline your business processes.
Sounds great, right? But what does that mean in practical terms?
Regardless of your business model, digitalization leverages a universe of digital tools to convert clunky, human-driven processes into quick and agile software-driven tasks. The advances in visibility and efficiency, such as real-time insights into current workflows, trends, documentation needs and much more, will transform your business.
For example, basic processes such as generating and recording documents for contracts, invoicing, financing and business tracking can be done in a matter of a few minutes by leveraging digitalization. Forms are instantly accessed, customized and shared with the relevant parties via workflow automation, digitally signed by the relevant parties (wherever they may be), and automatically sent back to you and shared with other parties, such as regulatory agencies and so forth.
In short, what were once tedious, human-driven processes that would have taken days to complete at a much greater cost and risk of mistakes are accomplished with a few keystrokes on a keyboard from any digital device. This is just one small example of the power of digitalization, but it gives you an idea of its efficiency and cost savings.
A positive impact on business optimization, market positioning and new opportunities
Digitalization will also have a hugely positive impact on the products and services you offer and how you deliver them.
For instance, digital analytics can uncover hidden insights into your data and processes for a more granular picture of your business model and its operations. Analyzing customer response rates by a variety of criteria, such as performance by region, time of day, week, month or year, or by related purchases or other factors is easily done with customizable digital analytics.
What’s more, your decision to pursue digitalization will position your firm in the marketplace as one that is forward looking, with stronger prospects for longevity. Plus, enhanced efficiencies and capabilities let you offer more to your customers and expand your market. Powerful analytics can also spot inefficiencies and identify actions to remedy them in real time and even identify new revenue opportunities within your business model.
All of these benefits (and many others) can only be realized with digitalization.
Digitalization is not the whole picture
Digitalization is the second of the three stages of digital transformation. It’s what enables your company to optimize your business operations by converting human-driven tasks into streamlined, software-driven processes. It also identifies inefficiencies within your business model and potential new revenue streams so you can expand your business.
Finally, digitalization is what prepares your company to progress to the third stage, digital transformation, which we will discuss in our third blog in this series.
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