Which is healthier—digitalization or digital transformation?

Have you ever ever puzzled what the phrases digitalization and digital transformation actually imply? Are you uncertain about when to make use of these phrases and what they imply to you? And, extra to the purpose, what is the distinction?

Digitalization addresses the method of delivering the identical duties or merchandise as earlier than, however now with the assistance of a digital know-how. Digitalization within the banking sector is an effective instance. Digital transformation, however, is all about utilizing new digital applied sciences to allow us to ship one thing fairly completely different than what was doable earlier than. In different phrases, it permits a enterprise to bear change, or a change, which suggests it now not delivers the identical merchandise as earlier than, however one thing solely completely different.

The phrases digitalization and digital transformation have been tossed round and used interchangeably in parliamentary and consultants’ experiences, and within the media. In 2017, the World Financial Discussion board argued {that a} digital transformation was essential to profitability within the non-public and public sectors. We’ve got an intuitive understanding of those phrases, however after we ask ourselves precisely what they imply and whether or not there’s a distinction between digitalization and digital transformation, we do not all the time know fairly what to say.

Our analysis has proven that definitions of those phrases are steadily missing, and ample descriptions laborious to seek out. This will result in misunderstandings amongst companies and, within the worst case, faulty strategic selections as a result of they don’t perceive the distinction. They might spend money on a digital transformation when the cash can be higher spent on digitalization.

Analysis at SINTEF is demonstrating how digitalization and digital transformation are interconnected and that they’re impacting on companies in several methods.

Digitalization can greatest be understood because the sum of the actions {that a} enterprise takes with the intention of bettering or modifying its processes by the use of process automation. digitalization is nothing new. Programmable punch card know-how was in use within the early 1700s as a part of the automation of weaving looms.

The digitalization of enterprise processes permits extra information to be captured. These information then make it doable for digital applied sciences equivalent to synthetic intelligence (AI) for use to additional enhance these processes.

New information provide the chance to create solely new and as but unknown technique of wealth creation by making use of innovation and organising new areas of enterprise. This course of is named digital transformation.

Netflix began out as a provider of movie DVDs. Every particular person disc was despatched to the shopper within the submit. As a substitute of going to rental corporations equivalent to Blockbuster, the place clients might seek for movies, hire them after which return them, they have been routinely despatched the subsequent DVD on their checklist as quickly as their final one was returned. This ensured that clients all the time had a brand new DVD to look at.

Later, as a substitute of sending discs forwards and backwards, Netflix began to stream movies on to its clients. This was successfully a digitalization of the now outdated means of receiving DVDs within the submit.

By automating what have been beforehand guide processes, Netflix have been capable of receive entry to large volumes of information about its clients—what they have been viewing, for a way lengthy they have been viewing, what they favored and did not like, in addition to the scenes or elements of movies wherein they have been most .

Up to now, Netflix had obtained information sporadically from reference teams and buyer surveys. Based mostly on the information that was out there in these information about its clients’ preferences, the corporate started to supply and improve its personal movies and TV sequence. We should not overlook that at the moment, conventional suppliers equivalent to HBO and Disney have been additionally launching their very own streaming companies.

Netflix developed from being a digitalised DVD provider to a TV and movie manufacturing firm creating its personal content material primarily based on the info it had obtained from its clients. By altering its enterprise mannequin, it used its information to assist it develop right into a digitally remodeled movie and TV firm.

Netflix accomplished its digitalization and digital transformation by growing its personal progressive applied sciences. Nonetheless, most companies and organizations use applied sciences developed by others. What’s vital right here is how a enterprise interacts with those who develop the related applied sciences.

Analysis into know-how start-up corporations carried out at enterprise builders Iterate has enabled us to comply with the progress of a lot of such corporations which are at the moment trying to digitalize numerous features in society. These embody all the pieces from make the most of machine studying to detect vessels, and higher contain customers within the growth of digitalized methods.

A related present instance is the digitalization and digital transformation going down in our well being companies. In Norway, folks use the web portal helsenorge.no and different companies to allow them to rearrange appointments, receive prescriptions and talk with their docs. We are able to additionally see that work is in progress to digitalize affected person remedy.

At SINTEF we’ve been monitoring the corporate FlowZone, which is likely one of the start-up companies participating within the aforementioned ‘Iterate’ challenge. FlowZone has been working each to digitalize and digitally rework the rehabilitation of sufferers. By working each completely and effectively with sufferers and therapists, FlowZone is growing a digitalized rehabilitation system for sufferers and their therapists. The affect of digitally-supported interplay and monitoring has led to shorter stays in rehabilitation facilities and decreased danger of remission.

The digitalization of rehabilitation plans and the interplay course of not solely supplies information on how sufferers comply with up their plans. It additionally presents distinctive information and insights into the remedies themselves and the way particular person rehabilitations are working. In different phrases, it digitally transforms the methods wherein remedy and rehabilitation are carried out.

This in flip permits FlowZone to switch remedies and rehabilitation approaches, supported by the digitalized and close-knit interactions between sufferers and their therapists. It additionally delivers the advantage of exploiting applied sciences that sufferers are acquainted with and already utilizing, equivalent to Apple Watch and Garmin sensible watches. In brief, each remedy and rehabilitation have grow to be digitally remodeled.

Our analysis has proven that definitions of those phrases are steadily missing, and ample descriptions laborious to seek out. This will result in misunderstandings amongst companies and, within the worst case, faulty strategic selections as a result of they don’t perceive the distinction. They might spend money on a digital transformation when the cash can be higher spent on digitalization.

So, what’s most vital to you—digitalization, digital transformation or each? Our analysis demonstrates that each are vital and that they’re interlinked. We consider that companies should discover a simultaneous stability of their focus between digitalization and transformation.

Our findings point out that companies that reach figuring out this stability are doing the next: (1) they function with a corporation that works effectively, (2) they give attention to seize and high quality guarantee their information and, not least, (3) they develop applied sciences that make the most of information, equivalent to those who make use of synthetic intelligence.

Even after 300 years of expertise with digitalization, extra analysis is required into our up to date sensible, organizational and authorized points. SINTEF is conducting tasks equivalent to 10x-Groups, Digital Klasse (Digital Class) and Transformit in its try to seek out the secrets and techniques to success.