What is Digitalisation?

Digitalisation is the process of using digital technologies to improve business and social operations within an organisation. It aims to transform how a company interacts with its customers and maximise its return on investment (ROI).

What is the Purpose of Digitalisation?

Digitalisation aims to improve the efficiency of business processes, enhance your company’s productivity, and revamp the customer experience. In short, digitalisation intends to simplify and streamline workforce operations.

According to the Gartner’s CIO Agenda 2021 report, 69% of boards said that they had accelerated digitalisation in response to Covid-19. This statistic highlights that, as the pandemic was a challenging disruption, it required organisations to adopt a digital way of working to help their business survive.

What Effect Does Digitalisation Have?

Digitalisation is setting the standard for marketplace success, and when it inevitably becomes the new normal within your organisation, it can have the following effects:

  • Streamlined business or work processes by automating manual or repetitive tasks where necessary.
  • The promotion of better decision-making as technology such as machine learning can analyse complex and comprehensive data to improve the understanding of customers or processes.
  • Reduced costs, reinforced safety, and a diminished need for human involvement in tedious and repetitive tasks.
  • Encouragement of innovation among employees as they become more aware of the possibilities of new technologies.
  • Improved talent retention, decreasing the likelihood of a high job turnover while allowing for more flexible working conditions such as working from home.

What Are the Disadvantages of Digitalisation?

While digitalisation can transform organisations, it is no simple feat to prepare your workforce for the change.

Disadvantages of digitalisation include:

  • Employees may feel lost if they do not receive relevant training as new technology and processes are implemented. Of course, some employees will need more support than others to embrace digitalisation, but they can be left behind if their employer does not recognise this.
  • Digitalisation is an ongoing process. You have to perpetually provide information for all parts of the business through unified technology so that your company can continue to run efficiently.
  • Digitalisation is a step-by-step process that takes time and money to implement. If you aim to digitalise one business area at a time, you will start seeing more benefits as you progress.

How Can Digitalisation Improve Your Business?

Digitalisation can do the following for your organisation:

  • Improve productivity, from empowering employees to enabling customers
  • Reduce operating costs.
  • Allow you to enter new markets.
  • Facilitate the creation of a centralised database that gets rid of organisational siloes.
  • Enhance your customer experience offering.

How Companies from Different Fields Benefit from Digitalisation

The pandemic has forced every organisation to invest in digitalisation, racing for an advantage over their competition through faster, more precise decision-making and quicker adaptations based on what they learn.

Here are four examples of businesses that can benefit from digitalisation:

  • Real estate/Housing: Software can make taking rent payments and scheduling moving easier for residential tenants. Additionally, commercial tenants could benefit from food delivery options, thermal scanners to take an individual’s temperature as they enter a building, or real-time analytics for heating and cooling systems.
  • Finance: Data analytics on virtual platforms can be leveraged to achieve a deeper understanding of customer portfolios to enable efficient processing of loans. Additionally, useful insights into credit history and customer preferences can be gathered from the collaboration of fintech and big data analysis. Another useful area where digitalisation can be leveraged is fraud detection, where customer behavior is recorded and used to analyze potential fraud.
  • Manufacturing: Digitalisation can enhance productivity and lower costs through advanced technologies that facilitate predictive maintenance of transport. Additionally, a digital twin could be employed to collect real-time data on a product over time, delving into the end-user experience, performance, and distribution.  
  • Retail: By investing in technology such as predictive analytics and artificial intelligence (AI), a company could quickly switch from brick-and-mortar stores to e-commerce channels. Furthermore, during a crisis, you can use technology to grant online orders from fulfilment warehouses and stores.

What is Digitalisation in HR?

Digitalisation in HR refers to transforming HR processes by using technology like the cloud and software services. This digitalised approach means that the HR department can strategically plan a better workforce and create more efficient employer experiences. In this way, technology enables HR professionals to place their focus on hiring and retaining the best people.

What is Digitalisation in Sales?

Sales departments are benefitting immensely from digitalisation. This is due to sales teams applying technology to improve their performance—to make better, customer-centric decisions.

They are also automating touchpoints to maximise engagement with minimal effort. There are even systems that utilise AI to analyse sales calls and provide insights to salespeople about how to drive potential customers through the funnel.

What is Digitalisation in Marketing?

Digitalisation in marketing allows your business to reach more customers with less money than offline marketing methods. When you adopt digitalisation in marketing, it can make it easier to:

  • Better know your customers expectations at any time and anywhere so that you can personalise messaging for them to improve their connection with your brand.
  • Communicate with your customers at any time during their customer journey
  • Track and monitor all of your marketing efforts instantly so that you can clearly define what works well and which activities need adjustment.

What is Digitalisation in Education?

In terms of education, digitalisation refers to technology such as mobile devices, computers, and the internet to teach students of all ages.

As a result of the pandemic leading to remote classroom settings, leading school administrators have learned the value of “ed-tech”. There are numerous benefits to digitalising the learning process.

A few examples include:

  • Greater student (and parental) engagement for a more involved learning experience.
  • Paperless classrooms that save countless trees and waste.
  • Automated grading that acts as an aide to teachers and expedites the grading process.

How Does Digitalisation Affect Employment?

Digitalisation has the potential to reshape how we work as it can make working more flexible and fluid. However, as we become more dynamic in the way we work, there is a greater chance for the emergence of a gig economy, where a labour market is comprised of freelance work or short-term contracts rather than permanent jobs.

Which Countries Have Best Embraced Digitalisation?

According to the Digital Riser Report 2021 from European Center For Digital Competitiveness, China was a prominent digital riser within the G20, but Germany, Japan, and India lagged behind.

Over the last three years, Canada, Italy, and France were top digital risers within the G7. This report analysed the digital competitiveness and demonstrated the growing divide in terms of an agile digital transformation, especially within Europe.

What is the Difference Between Digitisation and Digitalisation?

While digitisation refers to converting physical information into a digital format, digitalisation goes one step further. It takes advantage of technology to assess this converted digital data to improve business decisions. 

In short, you can digitise information, digitalise processes, and workflows of an organisation and lastly, digitally transform the company and its strategy. 

Examples of Digitalisation

To help you further distinguish between digitisation and digitalisation, here are some examples of digitalisation:

  • Meeting up with another individual through video conferencing instead of face-to-face.
  • Assembling a product with the help of a robot or machinery, rather than by hand.
  • Monitoring the use of equipment using digital sensors rather than visually inspecting them in person.
  • Sending messages to a customer through social media or email as opposed to the post.

Updated: December 19, 2022

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