“Digital transformation” and “digitization” are terms that have come up frequently recently, especially after the covid-19 pandemic appeared. These two concepts are of great importance to a business. However, many business leaders still do not understand and distinguish these two terms, leading to unsuccessful application. So in this Tech Town article, let’s find out the similarities and differences between the two terms “Digital Transformation” and “Digitalization” as well as the causes of failure in implementation.

What is digital transformation?

Digital transformation is the application of technology and digital to improve all activities of an enterprise. It changes the way of working, operating businesses, business models, perfecting organizations, people, etc. Thereby creating new values for businesses. At the same time, enhance competitive advantage for businesses by providing customers with better value and experience.

Digital transformation affects not only the work process, but also the organizational culture of the business. Before deciding to implement digital transformation, enterprises need to prepare psychologically to adapt to the change, including training employees on digital transformation goals.

Digital transformation is the biggest trend in the business world today, it is applied in many different industries and fields such as: Manufacturing, services, banking, marketing,…

What is digitization?

Digitization is a misleading concept because it also has two different forms, namely, Digitization of data and Digitization of processes.

Digitization is a form of converting information, data and documents from physical, analog to digital formats. For example: Scan documents, convert paper documents to files stored on the computer…

Process digitization is the use of data that has been converted into digital form as mentioned above to change and improve the operating, working and business processes of an enterprise. For example, a document after being digitized will be saved on a company server, then uploaded to the cloud so that all employees can search and access it. That makes the work process faster and more convenient.

In short, document digitization is the first step towards digitizing workflow.

Same and different

Digital transformation is similar to Digitization in that they all apply technology and digital to increase efficiency in business activities. They all require a change in the size and way of operating the business.

The difference is that Digitization will benefit from the fact that digitized data will be used to automate the process, providing better accessibility, but Digitization has not been able to fully optimize the process. Meanwhile, Digital Transformation is the transformation of a business model to a digital model, it requires a change in business model, assessment or even restructuring… by applying technology turmeric. In short, if Digitization is data transformation, then Digital Transformation will use that data to analyze, change operating processes, and devise next strategies for businesses.

In addition, the difference between Digitization and Digital Transformation is also reflected in the human factor and sustainable values. Digitization itself does not change data, but changes the way data is stored and manipulated. And Digital Transformation affects the entire enterprise, from organizational structure, way of thinking to business model. It requires businesses to have a long-term strategy, exploiting digitized data to change the way businesses operate, from data that can give appropriate strategies to bring high business efficiency. In addition, the most important factor in Digital Transformation is that people, from leaders to employees, need to change their mindset to adapt to the transformation.

Finally, Digitization is a task that has a deadline and can be done in a short time, while Digital Transformation is a long-term process that cannot be completed immediately. Digitization can be considered as a stepping stone to implement Digital Transformation.

Causes of digitalization and digital transformation failure

Lack of innovative leadership is one of the main reasons why many businesses fail. These jobs require the services of experts/leaders who are innovative, have a clear sense of the importance of digital transformation, are assertive and can inspire employees. Of course, leaders who understand the nature of Digital Transformation and Digitalization will help them apply more effectively.

In addition, there are still businesses that have not yet invested heavily in digital transformation. Hardware infrastructure still accounts for a high proportion of investment, while modern software such as resource management (CRM) accounts for very little, although they really bring many benefits to businesses. Fear of failure and fear of change is also one of the reasons why you should not start digital transformation.

We must admit that, in order for a business to survive and develop, it is necessary to satisfy old customers and attract new customers, followed by stable and optimal storage of customer data. for necessary. However, at present, there are still some small businesses, especially startups, who have not seen the importance of this issue.

So what is the method of success?

To succeed, let’s think simply: Invest from the smallest, go slowly but surely, strictly control each stage, digitize and exploit customer data – that’s the important key. help businesses win in the market, and at the same time, it is also a solid stronghold to protect the values of the business.

Above all, customer data helps businesses understand their customers, thereby enhancing customer satisfaction and maintaining strong relationships, increasing sales and strengthening their position in the market.

Hopefully the information Tech Town brings above will be useful to businesses. If you are planning to implement digital transformation but don’t know where to start, Tech Town is here to help.

Tech Town is a technology company from Vietnam, with representative offices in the United States, Japan, Canada, the Netherlands,… As a reputable digital transformation consultant, specializing in implementing projects custom software development with the application of the most modern technology techniques such as AI, Machine Learning, Blockchain… For more than 4 years of operation, Tech Town has become a trusted digital transformation consulting partner. by startups and enterprises from many countries around the world such as the US, Canada, the Netherlands, Japan, the UK and other developed countries.

Contact us if your business has any technological challenges!