{"id":321,"date":"2023-01-09T13:09:32","date_gmt":"2023-01-09T13:09:32","guid":{"rendered":"https:\/\/digiterrebestg.wpengine.com\/?p=321"},"modified":"2024-05-30T13:57:14","modified_gmt":"2024-05-30T13:57:14","slug":"digitisation-vs-digitalisation-whats-the-difference-and-why-does-it-matter","status":"publish","type":"post","link":"https:\/\/www.digiterre.com\/us\/2023\/01\/09\/digitisation-vs-digitalisation-whats-the-difference-and-why-does-it-matter\/","title":{"rendered":"Digitization vs digitalization \u2013 what\u2019s the difference and why does it matter?"},"content":{"rendered":"
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Digitization vs digitalization \u2013 what\u2019s the difference and why does it matter?<\/h1>\n\n

\u201cWhen digital transformation is done right it\u2019s like a caterpillar turning into a butterfly. But when it\u2019s done wrong all you have is a very fast caterpillar.\u201d George Westerman, MIT Sloan initiative on the digital economy. <\/p>\n \n <\/div>\n<\/section>\n\n\n

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Digital transformation is having a moment. You might say it\u2019s been having a moment for a decade \u2013 and you wouldn\u2019t be wrong. After all it is probably the most talked about business paradigm shift in living memory. Why now? Well, before COVID-19 entered our vernacular, many businesses held back on the extent of their digital transformation due to the perceived imbalance between the disruption caused by the change management requirement versus the value created.  <\/p>\n\n\n\n

However, since COVID, many organizations have been accelerating their transformation programs because in the current hyper-turbulent market conditions and commodities super cycle everyone is looking for a competitive edge, and the smart thinking now concurs that value delivered by digitalization goes way beyond that of mere cost savings or process efficiencies. The package of benefits that includes data insights, learning that drives continuous improvement alongside scalability, risk management, and resilience is the true Koh-i-noor in the crown. <\/p>\n\n\n\n

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What is the opportunity?<\/h2>\n\n\n\n

Back in 2016, the World Economic Forum estimated that $100 trillion would be added to the world economy through digital transformation by 2025. It went on to predict that by 2025, interactions driven by platforms were expected to enable roughly two-thirds of the $100 trillion value at stake from digitalization. <\/p>\n\n\n\n

According to Gartner 91% of businesses are now engaged in some form of digital initiative and 87% of all senior business leaders say digitalization is a priority. <\/p>\n\n\n\n

What can we draw from these eye-watering predictions and high levels of commitment to the cause? Digitalization is a big deal. A deal maker and a deal breaker for all organizations across all sectors.  <\/p>\n\n\n\n

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Digitisation or Digitalisation?  <\/h2>\n\n\n\n

At this point it is probably worth pointing out that the terms digitization and digitalization are often used inter-changeably. However, there are important distinctions: <\/p>\n\n\n\n

Digitization<\/strong> according to Gartner is \u2018the process of changing from analogue to digital.\u2019 It is making information available and accessible as a digital asset and therefore it is the information and not the processes that are being digitized. Most importantly, there\u2019s no fundamental change to the workflow. Whilst there may well be advantages of taking paper-based or manual processes and digitizing them with little or no transformative thought to the accompanying workflows, the real magic and value delivered comes through the process of workflow transformation and that requires change management. <\/p>\n\n\n\n

Digitalization<\/strong> is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities. Digitalization brings about total transformation of the workflow from start to finish. If this is done well you liberate vast amounts of value through cost saving, process improvement, efficiency, scalability, risk mitigation, business resilience, and access to data to inform and drive the business forwards at speed and with the insights needed for continuous improvement. <\/p>\n\n\n\n

Put very simply, Digitization is mostly about doing the same things in a slightly different way. A faster caterpillar. While digitalization opens up the possibility of doing new, better things (and hopefully doing less manual, repetitive, boring, unpleasant work too) which in turn supports the change that organizations seek for their processes\u00a0and\u00a0<\/em>their people, to allow the butterfly to fly.\u00a0<\/p>\n\n\n\n

While \u201cdigitization\u201d and \u201cdigitalization\u201d share many of the same letters, the outcomes that can be created by the latter far outweigh those associated with the former. No caterpillar can out crawl a butterfly.  <\/p>\n\n\n\n

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What are the benefits of digitalisation? <\/h2>\n\n\n\n

For energy and commodity trading organizations and those in the financial markets, with whom we work, the use of advanced data analytics tools in market risk management, contract creation, logistics and complex networks have manifold and long-term benefits in terms of providing new opportunities for delivering business value and improving transparency.  <\/p>\n\n\n\n

For example, digitalization and resultant new technologies can improve profit margins, save traders time compiling data for contracts. In addition, digitalization converts data to market intelligence, giving the business the means to respond to changes in real-time and thereby mitigate risk. <\/p>\n\n\n\n

The speed at which organizations can access data, extract the maximum value from it and act on it is foundational to success. In fact, in the case of commodities trading, digitalization has caused a data explosion where access to real-time and near real-time data is widely available, where once it had only been the preserve of the few. The democratization of this data through self-service access has levelled the playing field. Digitalization and the innovation it effects is the key to building and maintaining competitive advantage.\u00a0<\/p>\n\n\n\n

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How to succeed<\/h2>\n\n\n\n