Numbers, digits, the 1-2-3s which everyone learns since being a toddler. We carry numbers with us in forms of Identification, grades and even our age – til death do us apart.
These days, we often hear the words ‘Digitization’ and “Digitalization”. Have we in certain instances confused them as one or do we actually know their differences?
Since the inception of modern printers and scanners, we have started to ‘digitize’ our hard-copies in various forms (e.g. photographs, worksheets, receipts, audios and videos etc) into soft-copies of ‘digital formats’. This is the coding and conversion of information or the transfer of analogue data into bit-streams known as digital formats.
Digitization has brought about reduction in physical storage spaces and more efficient retrieval of information. Over the decades, storage mediums and cards have become smaller in sizes, yet they have increased in capacities to store even more data than before. The loading times and the access speeds to the information stored within have improved tremendously as well.
Given the context of Digitization, it makes sense to explain “Digitalization” in the modern world. Digitalization is simply leveraging on Digitization to convert a business unit in its processes to better manage its own internal workings and its external counterparts, be it other businesses or clients.
This is achieved by transforming a business unit’s databases into digital information. Take for example: a HR department dealing with employees will have to handle the payroll and accounts on a monthly basis. Under the basis of issuing cash or pay checks to individuals at the end of each working month, it involves tremendous man-hours in the manual preparation and signing of documents, right down to the handing over of the salary to the rightful individuals. Imagine a company which hires by the hundreds or thousands, this process is going to be a nightmare for the HR department every 20-30 days. Digitization allows a company’s records to be synced and processed on the company server, allowing the system algorithm to process and match the exact payroll to every employee without hassle and on the dot each month.
A business which has digitalized would see its communication channel improve internally and externally. Handwritten instructions would be a thing of the past; even emails would be considered ‘snail-mail’ in the modern digital age. System chats and apps would have been created and replaced emails in companies which have digitalized. This ensures instant messaging capabilities and information to be discussed and transferred ‘in real time’. For clients and external parties, postage mail and letters were a thing of the past to be sent as reminders or notices; emails and short messaging services would have replaced the heavy usages of paper, ink and postage fees.
Certain countries have pushed for the innovation and modern use of mobile apps for digital payments. This reduces manual hours in queuing for purchases or the need to be present at physical stores. Business units which have hopped on the bandwagon to digitalize their payment services and software have seen the ease of transactions and accounting at their end, also seeing boosts in revenue without the ‘limitations’ of having physical customers or within the same country boundary anymore. This was much apparent in the Covid-19 stricken
months. Businesses which have digitalized stood well against the economic shakings and have survived. New business entities which have seen the benefits are now going through transformations to stay relevant in this fast moving era.
The main key to digitalization of any local business is that it can become a global business by tapping into the vast and limitless digital space these days. The list of benefits and components to transform a business into a digital platform are endless and it would be best for any business owner to explore the transformation possibilities.
At Mxgsoft, we help SMEs grow in the digital space by implementing business applications and analytic tools for efficient growth and insights of their business data. This further enhances operational processes and critical business decisions on products and services. Look no further if you have chanced upon this article and if you are in need of advice to the digitalization of your business, drop us a contact @ +65 6805 8999 or email@example.com