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Digitization And Digital Transformation: What’s The Difference?

FROX AG
24.01.2023

In this blog article, we look at the concept of digitization and digital transformation. As IT experts, we have a special connection to digital transformation and give you an insight into our customer projects with practical examples. Read here what digitalization is and what digital transformation means.

Switzerland is digital

Ranked 5th out of 63! In the IMD World Digital Competitiveness Ranking 2018, we read that Switzerland is one of the most digitally competitive countries in the world, gaining three places compared to 2017. So digitally, we’re pretty fit. In the list ahead of us, “only” Denmark (4th place), Sweden (3rd place), Singapore (2nd place) and the USA (1st place) are in the running. However, Nicolas Bürer from Digital Switzerland still sees a clear need to catch up, for example in the education sector (primary and secondary school). We note, however, that there is still disagreement about the definition of digitization. We therefore want to explain in more detail what digitization means and what we, as an IT company with over 20 years of experience, understand by it.

Digitization vs. digital transformation: What’s the difference?

With our customer-specific solutions, we make an active contribution to Switzerland’s digital competence. Before we go into detail, however, we must first make a distinction between terms, because in addition to digitization, there is also digital transformation. But what is meant by this?

Strictly speaking, digitization means the transformation of analog information into digital forms. However, this original definition is outdated in current usage. Today, it means activities, processes and products that are implemented or provided by means of digital technologies. This can be using e-mail and push messages instead of business letters, an online store instead of a retail store, or automatic payment instead of sending invoices. Advantage: A digitized company can work much more efficiently through the use of digital technologies, e.g., produce or sell more cheaply and quickly, and yet continue to operate in its traditional business model.

The term digital transformation generally describes the process when not only the existing business model is optimized through digitization, but also the business model itself changes significantly, i.e., is transformed.

The music and video industry may serve as an example of this difference: A traditional video store that invests in media management software is pursuing digitization. Building a streaming platform on the web would be called digital transformation. The latter is significantly more demanding for a company.

Digitization means further development

With digitization, we therefore want to partially or fully automate tasks that were previously performed manually. Among other things, this allows processes to be optimized, errors to be minimized, and costs to be saved. Valuable time and resources can then be invested in other areas of the company.

Digital transformation means change

If new digital business models are developed that have such a major impact on the entire company that, for example, new services are formed and a company’s value chain is permanently changed, a digital transformation has taken place. These are far-reaching consequences that allow companies to grow, increase sales and strengthen market positions.

Digitization in everyday life

At the end of the day, we at FROX are not just companions for our customers, but end-users ourselves and use numerous digital solutions. We are experiencing the digital transformation and thus the interconnectedness of people, machines and technology in many areas, such as when we track package deliveries online, maintain our social media channels, monitor all bio-data with fitness trackers or “talk” with chat bots. The storage of information, its further processing and the resulting gain in knowledge speak for the various technologies of digitization that we are enthusiastic about every day.

Digitization: pros and cons

When the word digitization is mentioned, opinions differ: While critics warn of a takeover by robots as well as machines and staff layoffs, proponents emphasize the advantages that a digital future brings – these include changed job profiles thanks to competence expansion and even new jobs, e.g. in the media and telecommunications industries. So digitization per se does not mean anything bad, but also stands for progress and diversity of opportunities. Admittedly, even if machines take over routine tasks or standard processes, humans are not replaced. He can then focus on cognitive tasks, for example, which cannot be substituted. It is important that not all industries are lumped together and that digital processes make sense and are desired depending on the company. After all, digitization makes sense when it leads to greater efficiency in the company, increases sales, and ensures employee and customer satisfaction.

Digitization in the enterprise: Customer stories

With more than 24 million hits in search engines, digitization is on everyone’s lips. Digital transformation seems to be even more important – over 53 million search results in one fell swoop. This shows that there is a great interest in comprehensive changes in established business operations. This is certainly to be understood positively, because digitization brings improvements that contribute to the further development of a company. And who doesn’t want to develop further and become better?

Our business area is all about automating classic business processes and services using IT solutions. In doing so, we prepare our customers for their digital transformation and support them with know-how and new technologies. When it comes to automating business processes, we develop customer-specific applications that focus on key business objectives: greater efficiency through lean processes, fewer errors, time savings and reducing the workload on employees. At the same time, we also keep an eye on employee satisfaction and a positive user experience. When we advise our customers, we always scrutinize existing processes and use targets to decide how these processes should be digitized.

FROX customer projects

Example 1: BKW

We developed a solution for BKW that enables the energy company to actively monitor its mutation processes and process mutation notifications more quickly. Thanks to digitized document handling, the data acquisition effort is significantly reduced and the continuous process management guarantees high data quality.

Example 2: Building automation and fire protection

For this customer from the building technology sector, the focus was on the development of an IoT platform operated in the cloud, which can be used to check the status of over 100,000 end devices. In this way, faults are automatically recorded and can be immediately dealt with remotely by staff. As a result, problems can be identified and resolved more quickly, and service costs are reduced thanks to fewer on-site visits.

Analog in a digital world?

Digitalization is our business. However, this does not mean that everything must necessarily be automated! Rather, it is legitimate to continue to perform certain processes manually than to automate them by hook or by crook. This is an important realization on the road to digitization. Please also read our blog article “Getting Started With Digitization: Here’s What You Need To Know – Do’s And Don’ts” if you would like to take a closer look at digitization in your company.

Personal advice on digitization

Do you have questions about digitization or need help with a specific digitization project? We would be happy to assist you and walk with you step by step into your digital future, because digitization is an ongoing process. Contact us now, we look forward to hearing from you!

Request advice now
Dr. Hanspeter Seiler, Head of Digitalization, FROX AG

Dr. Hanspeter Seiler

Head of Digitalization

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