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Digitization in Business: What It Is and Why It Matters

Digitization in Business: What It Is and Why It Matters
June 18, 2024
Digital Transformation

In today's rapidly evolving digital landscape, businesses must embrace digitization to stay competitive and meet the needs of an increasingly tech-savvy customer base [1]. Digitization, the process of converting analog information into digital form, is crucial for optimizing workflows, facilitating data-driven decision-making, and enhancing customer interactions [2] [3]. However, digitization differs from digital transformation, which involves a comprehensive integration of digital technology across the entire organization [1] [4].

To thrive in the digital age, companies must embark on a digitalization journey, leveraging tools like Mobile2b to digitize processes, integrate systems, and automate workflows [4]. Mobile2b's intuitive platform enables seamless digital workflow design, centralized information access, and AI-powered automation, paving the way for operational efficiency, data-driven insights, and innovation-driven growth [1] [2] [3] [4].

Understanding Digitalization

Digitization refers to the process of converting physical objects or information into digital format, such as scanning documents into PDFs [5]. Digitalization, on the other hand, is about using digital technologies and digitized data to enable or improve processes and workflows, focusing on changing how work is done [5]. Digital transformation is the integration of digital technology into all areas of a business to fundamentally improve efficiency, create value, and adapt to changing industry trends [5] [6].

  • Digitization is the foundation for digitalization and digital transformation, providing the digital data that can then be leveraged [5].

  • Digitalization in business can improve operational efficiency, reduce costs, minimize errors, and enable data analysis to create new revenue opportunities [5] [6].

  • Digital transformation in business integrates digital technology across the organization to improve or create new value for customers [5] [6].



Digital Transformation

Conversion of analog data into digital format [6] [7]

Strategic integration of digital technologies to transform business processes, models, and operations [7]

Comprehensive, strategic approach to leveraging digital technologies to fundamentally change how an organization operates, delivers value, and interacts with stakeholders [7]

Task-level change [6]

Impacts operations [6]

Organizational shift [6]

Makes data more accessible [6]

Targets operational efficiency [6]

Aims for organizational transformation [6]

Narrower scope focused on data conversion [7]

Broader scope encompassing process transformation, innovation, and customer experience enhancement [7]

Goes beyond digitization and digitalization, driving cultural change, fostering innovation, and enabling new business models [7]



Benefits of Digitalization

Digitalization offers numerous benefits that can propel businesses towards success in the digital age:

  • It enables robust data collection, centralized storage, and tools to analyze data into actionable, revenue-generating insights [10]. Companies can leverage user data, such as IP addresses and device characteristics, to serve personalized ads and content, measure their performance, and understand audiences better [11].

  • Digitalization provides a framework to create digital revenue streams through software licensing, protection, and enhanced customer engagement [10]. User profiles can be created based on collected data to serve more relevant and personalized ads, content, products, and services aligned with user needs and preferences [11].

  • It facilitates automation, AI, and self-service tools to deliver frictionless, high-quality user experiences, improving speed and accuracy beyond human capabilities [10] [12]. Combining generative AI with other technologies could add 0.2-3.3 percentage points annually to productivity growth [12].

  • Digitalization eliminates inefficient communication and promotes productivity, accountability, and creativity through improved internal collaboration [10]. It enables consolidation of manual processes, automation, and integration with back-office systems to reduce costs and increase efficiency [10] [12].

  • It allows companies to anticipate challenges and build preemptive solutions, increasing their ability to remain viable in a rapidly changing environment [10]. Digital technologies like digital twins and data analytics can shorten product lifecycles, reducing the timeline from idea to launch [12].

Mobile2b embraces digital transformation and workflow automation, making it easier for businesses to digitize, integrate, and automate their operations:

  • Digitization: Transition from paper to digital seamlessly with Mobile2b's intuitive drag-and-drop platform for designing digital workflows accessible across devices, ensuring operational efficiency everywhere.

  • Integration: Unify your systems and centralize business information with Mobile2b for streamlined operations and enhanced decision-making.

  • Automation: Adopt the power of bots and AI for process automation with Mobile2b, reducing manual efforts, eliminating repetitive tasks, and paving the way for innovation and growth.


Real-World Examples

Businesses across industries have embraced digitalization, leveraging digital technologies to transform operations, enhance customer experiences, and drive innovation:

  • Entertainment: Netflix transitioned from a DVD rental service to an online streaming platform, disrupting the entertainment industry [13]. Disney launched Disney+, acquired major entertainment brands, and focused on personalization through tools like MyMagic+ wristbands [15].

  • Retail: Amazon reinvented retail through data-driven personalization, supply chain automation, and seamless customer experiences [13]. Walmart expanded online sales and services like grocery pickup/delivery [14]. IKEA adopted 3D and visual AI technology to transform online shopping [14].

  • Manufacturing: Toyota used AI, analytics, IoT, and automation to streamline manufacturing [14]. GE adopted CAD, 3D printing, IIoT, and data analytics to speed up design and manufacturing [14]. Caterpillar leveraged AI and IoT sensors to predict maintenance, anticipate part replacements, and assist in automation [15].

  • Finance: Goldman Sachs launched a digital banking platform 'Marcus' and used AI/ML for insights [14]. Hanseatic Bank implemented an Open Banking API to improve time-to-market and enable new business models [15].

  • Healthcare: Mayo Clinic utilized AI and ML for diagnosis and remote patient monitoring [14].

Successful Digitalization

Failed Digitalization

Microsoft shifted to cloud-based, mobile-optimized technologies [9]

Kodak's missed opportunity to adapt to digital photography [13]

Nike focused on optimizing their apps and website [9]

Blockbuster's failure to adapt to the rise of streaming services like Netflix [13]

Horderly offered virtual organization services [9]

Wells Fargo's account scandal due to unethical sales practices [13] created an online grocery delivery service [9]



Embarking on the Digitalization Journey

Embarking on a digitalization journey requires a strategic approach to ensure successful implementation and long-term sustainability. Here are some key strategies to consider:

  • Foster a digital culture by promoting open communication, transparency, and employee training around technological changes [8]. This creates a collaborative environment where everyone understands the vision and embraces digital transformation.

  • Implement digital processes for onboarding and offboarding to streamline the hiring and departure of employees [8]. This enhances efficiency and ensures a smooth transition during personnel changes.

  • Leverage electronic document signing to expedite and secure the execution of contracts, NDAs, and other important documents [8]. This streamlines processes and reduces delays.

  • Digitalize files and records by implementing an electronic document management system (EDMS) to centralize and secure data [8]. This improves data accessibility, organization, and security.

  • Digitalize employee feedback processes by utilizing digital surveys and performance management tools [8]. This facilitates efficient and transparent feedback mechanisms.

Traditional Approach

Digital Approach

Paper-based processes

Automated workflows

Siloed data storage

Centralized data management

Manual data entry

Data capture and integration

Disconnected systems

System integration and interoperability

Limited data insights

Data-driven decision making


What does digital transformation entail, and what is its significance?
Digital transformation refers to the integration of technology throughout an organization to foster significant change. It's crucial because it leads to enhanced efficiency, increased business agility, and the creation of new value for employees, customers, and shareholders.

What is the primary goal of digitizing data?
The core aim of digitization is to store information in a digital format that is easy to access for reading, action planning, or analysis. The intent of a digitization strategy is to structure and organize data to make it more manageable and useful.

How does digitalization benefit customers and businesses?
Digitalization is important because it enhances the customer experience by making transactions quicker and more convenient. For instance, customers can use mobile payment options to shop without repeatedly entering their credit card information, thereby reducing hassle and enhancing their overall experience.

What is the importance of digital business?
Digital business is significant because it allows companies to optimize their operations, attract new customers, and stay competitive in a constantly evolving marketplace.


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