The term digitization is no longer anything new. But many people still don’t know what digitalization involves and what exactly is hidden behind the term. Companies have new opportunities as a result of digitization, but there are also risks that can arise. What exactly belongs to the collective term digitization and how does this important step take place?
No precise definition available
Numerous aspects are summarized under the term digitalization. It is not always clear what exactly belongs to it and how digitization can be defined. To begin with, there is no uniform definition, but it is generally regarded as the most important development of our time. The digital transformation in society and in the economy is driven by the change from analog to digital technologies. Digital transformation refers to the way in which technologies and business processes are transformed. A mechanical process as it has been carried out until now is translated into a digital format, so to speak. This creates more flexibility and structures change.
Sectors and industries are changing
Digitization refers to all processes that are translated into digital and improved. The immediate result is digital transformation. A good example to illustrate this is the marketing and advertising industry. Old familiar concepts such as addressing a general target group via advertising no longer exist. User data is tracked and target groups are analyzed. Today, marketing knows all the numbers and accurate statistics are kept. Advertisements can be distributed in a targeted manner. In email marketing, there are precise figures on how often an email has been opened and content read. The nature of interaction and communication has changed permanently.
Support programs for digitization projects
Companies still shy away from digitization or don’t know where to start. The Digital Prämie Berlin is part of a funding program that awards cost subsidies for digitization projects. The program is aimed at solopreneurs and medium-sized companies with up to 249 employees. Digitization includes not only the conversion of analog data into digital information, but also the transformation of media. One can see the transformation from cassettes to MP3 files. Today, CDs are no longer needed. Music is streamed via streaming platforms. But the transformation of analog processes into digital ones also counts as digitization. This can be, for example, document filing, which is being transferred from folders and paper to digital document managers.
Technologies and innovation are being digitized
The change can happen because there are new disruptive innovative technologies. People also talk about the age in which old inventions and innovations are gradually transferred to digital. The invention of the computer and internet were the starting point of digitalization. Technologies such as cloud computing and artificial intelligence are enabling the transformation. The big terms of digitalization continue to include the Internet of Things, virtual reality, augmented reality, blockchain and Big Data. For companies, this means that they have to deal with the digital transformation. Otherwise, they will not remain competitive and will go under in the market.
Constantly changing markets
Markets are constantly changing and information as well as technologies have a short half-life. Society is affected by digitalization, as is the economy. Both influence each other and drive change. Processes that were once paper-based are now digital. Whether in the automation of production processes or in the organization of documents. Forms of work and the way people communicate with each other have also changed dramatically. The classic meeting is being replaced by online meetings, and teams are collaborating digitally via appropriate software. Many are in home offices and no longer work face-to-face. Interaction with customers is changing and there are new solutions and business models.