THE ENTREPRENEURIAL MIND

BUSINESS
DIGITALIZATION
Fatimahttps://www.pagero.com/blog/what-is-business-digitalization/
Source: Joy B. Judaya
BS Architecture 5D
DEFINITION
Digitalization is a more in-depth transformation of a business model towards using digital
processes rather than analogue ones. For example, a company deciding to turn the handling
and processing of all financial documents digital would be considered digitalization.
Business digitalization is the integration of technology that transforms the way organizations
operate across their different areas, services and channels, with customers and other
stakeholders. A true digital transformation process goes beyond buying and using a new tool
or software; it requires an honest commitment from the entire organization to evaluate,
challenge and reconfigure business processes at a path and pace that work for that
company, their clients and their suppliers.

3 TIPS FOR GETTING STARTED WITH DIGITALIZATION

1. Identify where there is room for improvement

Our advice is to examine one process, understand where there is room for improvement,
and start your digitalization journey there.

Do you still receive paper invoices from your suppliers? Even if you work with few paper
documents and mostly PDFs, there is a lot of room to develop a truly digital business model.
The tedious challenges of manually entering data, verifying invoices and handling and
storing paper or PDFs can be replaced with automated e-invoicing directly within your ERP
system. You’ll see lower costs, less manual work, increased straight-through processing,
and far fewer errors come to life before your eyes.

Digitalizing these tasks significantly increases visibility over company spend to help your
finance department make more informed decisions that benefit the entire organization. All
your invoice data is saved in one place so you can conduct searches and comparisons that
are not possible with piles of paper.

2. Get your organization on board

Once you have identified areas of improvement, you must get your whole organization to
support your digital business endeavors. Prepare a detailed business case that shows what
the company as a whole will gain from this digitalization project.

Beyond saving money, time and resources, digitalizing your financial processes lets you
collect and access quality data from orders, invoices, and other documents. This makes it
possible to identify trends, patterns, pricing insights, and buyer preferences. Being able to
see “the bigger picture” of your company finances will help all department leaders make
informed decisions now and in the future. Fully informing the decision makers of your
company of these benefits will give you a value proposition that is hard to deny.

3. Integrate with your existing systems

While embarking on a digital transformation project, make sure not to create more problems
than the ones you aim to solve. Do not get trapped in a web of disconnected systems!

When investigating options, look for a service provider that can easily integrate with your
current ERP or other accounting system. By making sure your digital business processes do
not need any system or format changes, you can go digital much faster and make the most
of your transformation project.
Source: https://www.i-scoop.eu/digital-transformation/digitization-digitalization-digital-
transformation-disruption/

3 DEFINITIONS/ CONTEXTS
In business, digitalization most often refers to enabling, improving and/or transforming
business operations and/or business functions and/or business models/processes and/or
activities, by leveraging digital technologies and a broader use and context of digitized data,
turned into intelligence and actionable knowledge with a specific benefit in mind.

1. It requires digitization of information but it means more and at the very center of it is data,
nowadays lots of data and big data. While digitization is more about systems of record and,
increasingly systems of engagement, digitalization is about systems of engagement and
systems of insight, leveraging digitized data and processes.

2. Digitalizing your business leads to digital business. The list of what you can
digitalize (supply chains, leading to digital supply chains, etc.) is long. In general,
digitalization is seen as the road of moving towards digital business and digital
transformation, as well as the creation of new – digital – revenue streams and offerings while
doing so. And that requires change.

3. Digitalization goes beyond business and refers to the ongoing adoption of digital
technologies across all possible societal and human activities. Think about, for
instance, the increasingly digital customer, the rise of digital healthcare, the growing
digitalization of government, of marketing, of customer service, etc.

Source: https://factory.dev/blog/digitalization-business-growth

DEFINITION
As stated by Gartner, digitalization refers to using digital technologies to change a
business model and provide new revenue and value-producing opportunities.
Digitalization in business helps to improve the efficiency of its operations, making automation
possible. There are fewer human errors and operational costs are reduced, due to the
decreased need for human resources.
Digital technologies have reconfigured the whole business landscape, transitioning from
traditional analog to digital. Data isn’t stored anymore on any storage devices but on the
cloud, thus ensuring there are no data silos.
Cloud computing helped many companies gain a competitive advantage amongst their
competitors. Even we use cloud databases on a daily basis, as they have proven to have an
enormous impact on team collaboration and performance.
By using cloud storage, data loss is prevented and data backups are automated.
EFFECTS
1. Customer behavior in a digitalized environment
GE Capital Retail Bank’s study has found that 81% of consumers go online to conduct
research before heading out to the store. Furthermore, there’s a growing trend of buying
online.
By fully embracing digital technology, customers are now using the web and mobile apps to
find whatever information they might want, whenever they want it. 
And now, customers aren’t only comparing your goods and services to your direct
competitors, but they are comparing them with different industry’s offerings that may provide
even better products and services.
Up to this point, customers are continuously pressuring companies to level up their customer
experience to a certain extent, considering the experiences customers have with other
companies globally.

2. Effects of digitalization on sources of knowledge

Digitalization has blessed us with countless sources of expertise and knowledge available.
Every company needs to be aware of the knowledge that lies beyond the traditional
boundaries.
Companies should learn how to bring together collaborative groups in such a way that it
contributes to both the development and creation of surplus economic value.
It’s essential to know how to establish relationships with external communities, but also how
and when to capture value when owning and managing elements of processes. 
All in all, digitalization enables a large variety of people to group together, connecting IT and
non-IT departments and impacting the way businesses create value.

3. Digitalization brings lower transaction costs

Nowadays, companies are running low-cost experiments that were unimaginable in the past.
It’s easier to set new goals and test them in a low-risk environment, which gives companies
more insight into future directions and if they’re going to be cost-effective.
Startups are excellent examples of companies that fully rely on digital technology. Their
future is uncertain and their business models lay foundations on that fact.
To succeed, they need to test and test again. The company’s success today depends on
how agile are they.

ADVANTAGES OF DIGITALIZATION IN BUSINESS

1. Increased digital presence
It’s safe to say that this benefit is the most visible one. If a company is present through social
networks, online stores, and business directories, its visibility is clearly multiplied. 

2. Emerging of new communication channels

The implementation of digital technologies not only increases the company’s digital presence
but also sparked the creation of new communication channels. 
Emails, mobile applications, and social media are examples of these newly-established
communication channels. By harnessing the power of digital communication channels, you
even have the chance of implementing an omnichannel strategy! 
This increases the chance of boosting your sales revenue and customer loyalty, but on the
other hand – there are some new responsibilities! 

3. Digitalization encourages innovation

Digitalization in business has a massive impact on innovations. As the technologies become
more and more advanced, they simply force you to act and innovate. 

DIGITALIZATION VS. DIGITIZATION VS. DIGITAL TRANSFORMATION

Simply said, digitalization isn’t possible without digitization. 

1. Digitization refers to the conversion of information from analog to digital formats.
It is the process of making information available and accessible in a digital format.

2. Digitalization refers to the use of digital technologies and digital data to create new
value-producing opportunities and transform the way customers and companies interact with
each other.
It is the use of digital technologies in order to change a business model and provide new
revenue and value-producing opportunities.
It is the act of making processes more automated through the use of digital.
3. Digital transformation refers to much wider use of digital technologies and cultural
change. It’s more people-focused. It demands core changes in the organization backed
by leadership. It is the process of devising new business applications that integrate all the
digitized data and digitalized applications.

BENEFITS
There are certain benefits digitalization always brings when done right:

 Reduced operational costs

 Less manual work

 Fewer errors
 Visibility over company spend
 Control over cash flow
 Data-informed decision making
 Increased efficiency of all operations
 Safer data storage in the cloud
 Enables data analysis

As we said, companies tend to store their data in cloud databases, and now that’s a
standard. Today, it’s almost impossible to picture a great number of companies not using
cloud storage. 
Cloud computing giants such as 3M, Microsoft, and Google offer high-security cloud
services, enabling careless digital asset management. 
Due to the implementation of digital technologies, workflows are becoming streamlined and
there are fewer human errors. All of the operations are executed more efficiently, thanks to
these streamlined workflows which enable businesses to reduce operational costs. 
Tools such as Google Analytics have become the very core of basic data analysis.

EXAMPLES OF SUCCESSFUL DIGITALIZATION

1. Banking meets digital technology

The world of online banking has become the most notable example of digitalization. You no
longer need to leave the comfort of your home and wait in a never-ending line just to put
money into your savings account. Or to pay off the credit card.
Mobile banking apps have become reliable, secure, and fast. They make it even easier to
handle your money than by doing it in the actual bank. 
To additionally spark your imagination, just imagine a bank with no physical branch. Well,
there are many out there to be exact. And they are the ones leading the way and creating a
fully automated system of online banking. Ten years ago, not so many people could even
imagine this happening. 

2. Digitalization in advertising
Facebook Ads and Google Ads are one of the most used advertising platforms nowadays.
Today, we’re able to conduct market research thanks to digital technologies and use
Facebook Ads and Google Ads to target the specific audience, which wasn’t exactly possible
in the golden age of TV commercials.