What Is Digitalization?

Digitalization is a term used to mean several things in a business context.


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It refers to:

  • Businesses that implement and make use of digital technology
  • The adoption of digital mindsets and work cultures
  • Digital transformation, including the implementation of modern-day business models

The term digital encompasses much more than just technology, as we can see.

It also refers to business practices, ways of thinking, and modes of operating.

A business that is fully digitalized, therefore:

  • Stays on the cutting edge of digital technology as much as is practical
  • Maximizes the productivity and usage of the software and technology it does deploy
  • Employs modern operating models that are only possible with digital technology
  • Puts humans at the center of its revenue models

Naturally, different people hold slightly different views on what “digitalization” means. However, there is a general consensus that it focuses on an integrated set of concepts like these.

Due to today’s technological revolution, digital technology has spawned a set of closely related terms, including:

  • Digitization – Often used interchangeably with digitalization
  • Digital Transformation – The process of transitioning to a business that adopt digital technologies and ways of operating
  • Digital Business – A business that has transformed and become fully digitized
  • Digital Adoption – The adoption, deployment, and full usage of a software application or platform

These are some of the most common terms related to digital, but they are not the only ones.

While some professionals feel that these terms have a bit of a “buzz” quality to them, it is also true that the world is undergoing a radical digital transformation.

And, despite slight variations in meanings, these terms have become ubiquitous in certain professional circles.

It is precisely because the world is undergoing a large-scale digital transformation that these terms are so commonly used.

Understanding what these terms mean – and why they are important in a business context – will become critical as the world becomes more digital in the coming years and decades.

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