Digitisation And Digitalisation – You Need To Know The Difference
In German there is only one term: digitalisation. In the Anglo-American language area, however, a distinction is made between “digitisation” and “digitalisation” (in the U.S.A.: digitization – digitalization). For once, our language is not as precise as English.
But what is actually the difference?
What Is Digitisation?
Let’s start with the more commonly used term, digitisation. It involves converting non-digital, analogue material to a digital format. For example, keeping digital records of production line batches rather than paper-based records. You can also digitise business processes.
Digitising batch records is a much more efficient method of record keeping, but it also improves the batch traceability business process. In other words, digitising doesn’t just create digital records of batches. Instead, it creates them in a format that you can then use to make further productivity gains.
Digitisation is the process of changing from analog to digital form, also known as digital enablement. Said another way, digitisation takes an analog process and changes it to a digital form without any different-in-kind changes to the process itself. (Gartner IT Glossary)
What Is Digitalisation?
Digitalisation is about transitioning your business to a digital business. This is why digitalisation is sometimes referred to as digital transformation. You achieve this using digital technologies, so digitisation is a part of digitalisation. It is only a part of it, though. This is because digitalisation involves changing or adapting your business model, not just digitising your data, processes, and actions.
The result will be a business that is more efficient and productive. In addition, digitalisation can present you with new revenue-generating opportunities.
Digitalisation is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business. (Gartner IT Glossary)
A good example of digitalisation comes from the movie rental sector. The analogue, non-digital version of this business involved going to your local video/DVD rental store to select a movie to take home and watch. Movies were then digitised to make it possible to stream or download them online. Trips to the video/DVD rental shop became a thing of the past.
Digitalisation, however, created whole new business models. The digital business Netflix is one of the best-known examples. Digitisation was part of the process that led to the success of Netflix, but it also required a digitalisation approach.
In other words, it was digitalisation that enabled Netflix to develop its subscription-based model and then integrate that model on platforms like the internet, App Store, smart TVs, and more.