Digital Transformation

Digital transformation refers to the overall process of, and effects brought about by, the use of novel digital technologies to solve problems. Digital transformation can occur at a company, sector or even societal level. Both digitization (turning analogue information into digital form) and digitalization (restructuring processes around new digital technologies) are prerequisites for digital transformation. As we shall see, novel innovations and technologies to push digital transformation are increasingly data-driven. A lot of these innovations are based on machine learning (ML) models and AI.

Digitization refers to changing analogue information into digital form, i.e. creating digital versions of analogue or physical things, such as paper documents or cassettes. Essentially, digitization means we are turning “things” into bits and bytes to store them digitally. Digitization is a process that has already been happening for a couple of decades. For example, we used to store pictures in analogue form in physical photo albums. Today, we store them on our phones, computers and in the cloud.

Digitalization is very closely related to digitization and refers to the restructuring of processes and other domains of our lives around digital technologies and digitized information. Digitalization is therefore enabled through digitization. For example, a hospital may digitize its information about patients, such as their personal data, medical reports, lab results and X-ray images, from paper to digital form. Based on that, the hospital may digitalize the process for how patients receive their medical results. Back in the day, the process may have been as follows: the doctor wrote their diagnosis by hand, a secretary typed it up on a typewriter and it was posted in the mail along with the lab results. Digitalizing this process would mean simply sending the digitized medical report and lab results via email. The reason why organizations and companies are increasingly digitalizing their processes is because it is more cost efficient and quicker for them and more comfortable for customers.

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