What is Digitalization?

Digitalization is the process of leveraging digital technologies to transform a business model, creating new revenue streams and value-producing opportunities. This involves integrating digital tools and systems into various aspects of a business’s operations, from management and communication to production and customer service.

In today’s competitive landscape, digitalization has become essential for businesses to stay relevant and thrive. It enables organizations to adapt to rapidly changing market conditions, meet customer expectations, and optimize their processes for greater efficiency and productivity.

Using digitized information, digitalization is the process of making workflows and processes easier and more efficient. Especially in today’s tech-driven world, it is crucial to adopt a digital culture in order to survive and succeed.


Digitalization vs. Digitization

Don’t confuse digitalization for digitization. Though often used interchangeably, they’re different. 

Digitization is simply the converting of hard/paper files and documents into digital files and documents. Think of scanning a picture, uploading paper documents, or converting a report into PDF form and storing it on a computer. This is digitization. 

The data and info remain the same, only the accessibility and storage change. It is beneficial for businesses because key information can be accessed instantly and easily.

Digitalization is the strategy or process of utilizing digital technologies, resulting in deeper changes that can alter the core of business models. Ultimately, these changes lead to opportunities for increased efficiency and revenue.

Examples of Digitalization

John Deere

How did a farming and farming equipment company digitalize its business? One thing they’ve done is analyze data collected by internet-connected devices to determine new revenue streams. They also use the data they collect to advise farmers in order to maximize their crop yields. 

John Deere Digital Operations Center connects users with their data by creating equipment with built-in sensors that relay information to the John Deere Operations Center.

Farmers can access this portal through their own account via tablet, computer, or smartphone to receive updates, suggestions, and forecasts.


Once having outsourced their web services to Amazon, Target reclaimed its digital presence and has created a new, remodeled design that blurs the lines between eCommerce and brick-and-mortar stores.

The stores have been equipped with new tech and have started offering online ordering, in-store pickup, and curbside pickup.

Target has also been successful with consistently engaging its social media followers—leading them to new products that they can buy directly through social media platforms. Target has seen its revenue increase significantly since implementing its digital strategy.

The Cloud

Storing files on the cloud supports digitalization; they’re accessible to anyone, anywhere with customizable permissions and settings. This enables the growth of a business beyond a single geographic location.

Employees working remotely can access whatever information they need, no matter where they’re based. This is especially useful these days, considering it is estimated that 32% of all employees will be remote workers by the end of 2021—which is up from 17% in 2019.

It is also predicted that global end-user spending on public cloud services will jump by 23.1% in 2021, as CIOs prioritize cloud-based applications, like software as a service (SaaS).

Pros of Cloud Storage

There are some distinct advantages of cloud storage:

  • Cost-effective and scalable 
  • Elasticity—store as much or as little as needed 
  • Off-site management reduces the workload on staff
  • Quick implementation
  • Business continuity in the event of an on-site issue…or, you know, a pandemic


Cloud and SaaS adoption are critical to successful digital transformation strategies. There is a variety of examples as to how SaaS can assist companies in their digitalization efforts:

  1. Meeting Demands & Business Agility 

Technology never stops evolving, and along with it, the expectations of customers. Other outside factors such as a rise in telecommuting brought on by health restrictions affect how products and services are delivered.

Companies need to be ever-ready to embrace change. SaaS empowers businesses along their digital transformation journeys and keeps them agile. The combination of scalability and continuous functionality improvement allows companies to future-proof their business and technology investments.

  1. Time-Saving

IT departments take time and resources to implement, maintain, and update on-premises software. Adopting SaaS solutions can reduce time and resources spent on IT-related operational support.

Companies can be more efficient when integrating IT systems and operational technology.

  1. Enhancing Collaboration

Having forms and processes that are structured and readily available to everyone makes for streamlined collaboration across departments.

SaaS solutions also help improve products, processes, and services with the ability for simultaneous input from anywhere in the world.

  1. Security

Providers of SaaS use the latest security technologies, ranging from data encryption to multi-factor authentication and API keys.

Modern cloud-based apps are built to prevent potential threats like hackers, malware, and data breaches. Additionally, updates to SaaS software are almost entirely non-invasive as opposed to on-prem technology.

  1. Accessibility & Quality 

With just an internet connection, employees can access cloud-based files and apps. This affords companies the flexibility to operate internationally with ease and efficiency.

Performance can also be improved because work on cloud-based apps can be measured, analyzed, and adjusted by management teams. Cloud-based apps can also be released to the market faster, giving users early access to offer feedback for further improvements.

The Digital Customer Experience

The customer experience (CX) has grown in complexity over the past few years. Customers can select in-store or opt to shop online.

The number of touchpoints has surged with each new device—smartwatches, smartphones, computers, tablets, etc. Customers can engage with a brand via social media sites, mobile apps, and now, through channels such as voice-activated services.

The future is here, people.

All of these components make up the digital CX. Wherever your customers are engaging with your brand via the internet, that is the digital customer experience.

Customers want to be able to hop from channel to channel and maintain the same experience across each. Customers might research through mobile, purchase online in a browser, and follow up with a call or email to the support center. 

To deliver a flawless digital CX, you must create a seamless experience across channels and devices while personalizing the experience to resonate with your audiences. This is called an omnichannel approach. Businesses with an omnichannel offering retain more customers because there are more opportunities to engage and connect with a brand. 

Whether customers shop in-store or online, regardless of the device they use, their experience with the brand must be consistent and enjoyable. Omnichannel customers spend more money in-store and online than single-channel customers.

However, if each of the channels is managed by a different team or department, communication can sometimes be slowed and customer support can suffer. This needs to be taken into consideration because it could result in a poor customer experience. Be sure to treat each touchpoint with the same level of care for the best results.

The Digital Employee Experience

Do you work from home? Are you reading this glossary entry as part of your business research? Then you’re probably already familiar with the digital employee experience—but on the employer’s end, more than you might think goes into being able to offer a digital work environment.

As we already mentioned, the pandemic affected WFH policies in a huge way. For remote employees, meetings are usually conducted via Teams or Zoom, ongoing chat and discussions occur on Slack or some other similar software. And a whole suite of other tools is used to complete daily tasks.

The technology that enables effective telecommuting exists, and many companies are well on their way to acquiring everything they need to provide an excellent digital employee experience. 

Common issues that affect the digital employee experience include:

  • Slow computers and loading time 
  • Apps that suddenly crash
  • Network connection problems
  • Outdated hardware and software
  • Employee management
  • Maintaining corporate culture 

It’s crucial to understand what people want in order to have a good digital employee experience. Beyond having the necessary tools and software to do their jobs, employees need to feel included, supported, and properly trained for their roles.

Companies with active social networks have employees that are more productive than those without. Employees who feel engaged are more likely to stay at their companies. Some other key pieces to a meaningful digital employee experience include instant messaging and communication tools, and internal social media tools.

Providing an exceptional digital employee experience may well lead to a variety of rewards, including:

  • Happier and more productive users. Create a hassle-free experience to keep employees satisfied and efficient.
  • Improved retention and recruiting. Workplace flexibility attracts a wider and deeper talent pool while the tech stack influences job choice.
  • Fewer support tickets. Equipping and maintaining workplaces with the end-user experience in mind means less time and money spent on support tickets.
  • Cost-savings for organizations. Give IT departments what they need to support employees and properly equip employees to reduce problems and lower costs.

Digital Transformation During a Global Pandemic

It’s plain to see that the COVID-19 pandemic has accelerated most companies’ process of digital transformation. The trend was gaining momentum prior to the pandemic, but the situation has led to faster digital adoption by businesses. 

In a 2020 survey, Gartner found that 82% of company leaders plan to allow remote working at least some of the time as employees return to the workplace. Almost half say they intend to permit employees to work remotely full-time going forward.

The pandemic has indeed disrupted the normal timeline for digital transformation. With unprecedented number of employees working from home, companies have been forced to deal with everything it entails—virtual meetings, remotely accessing files and documents, cross-department collaboration, adjusting and maintaining corporate culture…the list goes on.

Businesses have been forced to adapt and transform their models to suit today’s demands and circumstances.

The impact of remote work is causing companies to re-evaluate their IT infrastructure as well. Senior Research Director at Gartner, Ranjit Atwal says, “Through 2024, organizations will be forced to bring forward digital business transformation plans by at least five years. Those plans will have to adapt to a post-COVID-19 world that involves permanently higher adoption of remote work and digital touchpoints.”

The best transformation strategies will take full advantage of remote-first technology as well as emerging technologies like hyperautomation, AI, and collaboration technologies. To do so, companies will most likely turn to digital adoption platforms as a catalyst for this massive technological undertaking.

Updated: September 12, 2023

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