Digitisation vs digitalisation vs Digital Transformation

Explore the nuances of digitisation, digitalisation, and Digital Transformation and their impact on navigating a digital-centric future.

Unpacking how technology can work for your business

In an era where invention and innovation are considered a priority for societal advancement, it is easy to challenge the naming of new concepts, specifically in the tech industry. As humanity strives to comprehend the implications of transformative concepts, various labels for the same idea are generated. A prime example: digitisation, digitalisation, and Digital Transformation. But are they actually the same idea? And does understanding the nuances of each have any impact on an organisation’s approach to ensuring they meet the demands and realities of a digital-centric future?

When examining these transformative concepts, the notion proposed by Juliet in William Shakespeare’s work, which suggests that the name of something does not affect its fundamental essence or identity, could potentially be subject to questioning. Why? Because the existing perspectives on the inherent distinctions in these terms may challenge or complicate Juliet’s assertion.

Below, Tony van der Linden, CIO at software solutions company BBD, dives into these three seemingly indistinct concepts and unpacks how understanding the fundamentals thereof strengthens an organisation’s technical positioning – no matter the current state of their tech ecosystem.

Digitisation: From analogue to binary

Theoretically speaking, the common agreement is that digitisation involves the process of moving analogue information to a digital representation of ones and zeroes, or binary. This process enables the storage, transmission and utilisation of that information through digital devices. Why is this something that matters?

As the first step in the Digital Transformation journey, which we will dive into later, digitisation assists businesses in reducing paper usage, saving storage space and improving collaboration. Beyond that, digitisation also helps reduce the probability of mishandling or misplacing data while creating the opportunity to more easily refine, examine, share, alter and transform the data into useful information.

In summation, digitisation is the first step towards higher efficiency, improved data security and improved integration.

Digitalisation: From binary to automation

Now that the data exists in a digital format, organisations can start to apply digitalisation principles. Here, although the jury is still out on a single, concise definition, it’s safe to say that digitalisation allows for enabling digital technologies and tools to be applied to automate, modify or optimise business processes. Through this, organisations can advance their operations and activities.

Basically, digitalisation is step two on the journey to Digital Transformation, where digital processes are optimised and automated in a bid to reduce costs and improve efficiency, while often improved user and customer experiences.

“Take banking for example. When I was younger we all had bank books. You’d pop past the “teller”, hand in your cash and they’d write in the book what you were depositing or withdrawing – that was your physical record of the money you had in the bank. As they moved that process to the branches where you could use the ATM to deposit and withdraw, we saw digitisation in action. We then swiftly moving into an era where at any time of the day or night we could transfer funds on our personal devices between accounts, automate payments, move funds and apply for loans, all without a bank agent’s intervention. This a prime example of digitalisation” explains van der Linden.

Digital Transformation: To infinity, and beyond

From the above, one might say that Digital Transformation is the end destination… And while it is the end state of digitalisation, it is actually the start of another journey, one where organisations embrace technology and its evolution in a constant cycle of modernisation and improvement.

That sounds daunting, like a never-end task list.

The concept of Digital Transformation can be traced back to the late nineties. Ultimately it is a continuous process that aims to leverage digital tools and processes to drive positive change and innovation within organisations, enhancing digital capabilities to improve processes, products, services and business models. All while effectively managing risks so that organisations can better meet their customers’ needs. It is not only something for the technologists in a business to tackle, but a strategic move that helps businesses capitalise on emerging or established technologies.

Van der Linden goes on to say that “We can apply that same example of banking here as well. As the banking sector has embraced technology, we are seeing the continuous evolution of the services offered to us as customers. From tapping our phones and watches to pay for our morning coffee fix, to cardless withdrawals through the likes of eWallets, and even the ease at which we transfer funds between currencies in instant cross-border payments, banking has taken on an entirely new meaning for the end user. The trend towards behavioural based banking is another clear nod to the progression of banking in its own Digital Transformation journey”.

So how would an organisation go about embarking on a Digital Transformation journey?

All mapped out: How to start your own Digital transformation journey

Having successfully stepped numerous organisations through the journey at his time in BBD, van der Linden explains that the first step is always to address the mindset of yourself and your employees. “By giving yourselves room to change direction, course correct, and experiment, you are setting yourself up to succeed from the get-go.” Remember that part of this journey involves unpacking and assessing not only the systems in your tech environment, but also the people, processes and tools that form part of those systems. Next is to be realistic about where your business aims to end up and where you currently are – paint the bigger picture and understand what steps you’ll need to take to get there. Once you have that bigger picture you can understand the value and impact it will have on the business when compared to the current situation. The next step is the most intensive, forming a strategy that supports the move towards your vision and prioritise the outcomes. This involves understanding the gaps that may exist between people, skills, technology, data and operations.

Having a partner on this journey who not only intrinsically understands what all is involved and how best to achieve individual visions, but who can also put an achievable strategy into play is a game changer. “That’s our role in BBD. We come in as your technology partner, and help unpack your technical landscape and systems, positioning where you’d like to go versus where you currently are, and then advising on not only the best tools and technologies to employ to get there, but also the steps required in that journey.”

FOCUS on your future

One such route BBD takes in assisting organisations on transformation journeys is through diagnostic health checks, and specifically our unique FOCUS framework. FOCUS stands for Framework for Operational Consistency in Ubiquitous Strategies (quite a mouthful!) and is the culmination of extensive experience gained over many years in enterprise software. The framework encompasses various activities including evaluating enterprise software strategies and implementations, and designing, architecting, developing and supporting highly available and scalable software solutions. Van der Linden explains that “FOCUS has been meticulously crafted to address the diverse needs of on-premises, cloud native and hybrid cloud environments, and reflects BBD’s commitment to delivering robust and effective software strategies”. This pragmatic approach for evaluating operational consistency across chosen strategies helps cement the foundation that supports the core pillars which are crucial in developing and maintaining available and scalable enterprise software solutions. Cementing these core pillars is critical to steering a Digital Transformation journey in the right direction.

A multi-faceted approach with 10 specific areas of assessment, FOCUS can be customised per engagement, with not all areas required in each instance. One such area that FOCUS includes is business requirement analysis to align the development strategy with the organisational goals and objectives. We have found it crucial to understand how these translate into operational metrics such as deployment frequency, recovery times and customer satisfaction. Equally critical is assessing the technical infrastructure, where the existing hardware, networking capabilities and cloud services employed are evaluated.

The 10 areas FOCUS assesses are:

• Business requirements analysis
• Technical infrastructure
• Operational metrics
• Ways of work
• Deployment environment
• Deployment automation
• Security and compliance
• Data architecture and governance
• Rollback and DR plans
• Cost analysis (FinOps)

Finding harmony in the chaos

So what does this all mean for your business? Well, by utilising effective and comprehensive strategies, such as FOCUS, to map out your technical future, businesses are better equipped to employ digital technologies without amassing unnecessary technical debt or losing internal brand cohesion and identity. These continuous steps in the Digital Transformation journey, hand-in-hand with a trusted solutions provider, set the scene for organisations to improve employee efficiency, system reliability and customer satisfaction. No matter where you are on the spectrum between digitisation and Digital Transformation, the rate technology is advancing can create chaos for businesses who don’t yet know in which direction to proceed, but it doesn’t have to be that daunting to find seamless harmony. If you’d like to learn more about our diagnostic health checks, and how they can assist in your Digital Transformation journey – reach out here.