In plain English
Three terms are often confused. Digitization converts information from analog to digital form, such as scanning paper. Digitalization uses digital technology to change how a process works, such as replacing a manual approval with a workflow that has controls built in. Digital transformation reshapes strategy, operating model and culture around what the technology makes possible.
Many institutions have done a lot of digitization, some digitalization, and less transformation than they report.
Why it matters to a board
Spending on the first is often reported as achieving the third. Knowing where the institution really stands helps direct investment.
Common mistakes
- Calling a scanned form digital.
- Automating a broken process.
- Digitalizing a process without redesigning its controls.
What the standards and regulators say
- No single standard defines these terms, and usage varies between sources.