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Non Tech Leader’s Guide to Digitization

With global spending on digital transformation expected to hit the $3.6 billion mark by 2026, organizations from the technology and non-technology sectors are investing heavily in cloud, AI, the Internet of Things, and more to scale up.

Moreover, some major non-technical sectors like retail, manufacturing, healthcare, banking, and insurance boast interesting statistics on the adoption of digital transformation for organizational productivity and business outcomes.

In this blog, I’ve discussed the basics of digitalization that business owners and CEOs of non-tech companies need to realize through business optimization and digital transformation initiatives.

Digitization vs. digitalization

I’ve seen people often get confused between the two terms and frequently mix both in different contexts and situations. However, there is a sharp differentiation between digitization and digitalization.

Digitization, by definition, is simply converting something into bits and bytes; for example, you digitize a hard paper by scanning a photo or document.

digitization vs digitalization

In business terms, companies use electronic systems and tools to convert data and place manual work. It helps businesses leverage sophisticated tools like automation and data analytics for informed decision-making and provide sustainable solutions.

On the other hand, the other counterpart digitalization is more about transformation. It involves employing digital technologies to transform business processes, models, and operations, optimize workflows, improve productivity, and enable innovation.

Understanding digitalization

Now that we’re done differentiating the two concepts above, the rest of our discussion will center around digitalization.

The first step towards using digitalization is defining the organizational objectives you wish to accomplish for your business.

Define your business ambitions

If you aim to incorporate digital solutions into your business model, start by defining your “digital ambition” with the right mix of digital initiatives.

Your company’s ambitions are your strategic intent and objectives related to integrating digital technologies into business operations, products and services, and customer service.

For instance, supply chain optimization, data-driven decision-making, robust cybersecurity, market expansion, product innovation, platform ecosystems, etc., could be your digital ambitions.

Digitalization isn’t a monolithic product!

In other words, digitalization isn’t a single massive product that is difficult to change.

The leadership team must devise a series of multiple initiatives before setting a strategy, taking us to two broad categories that fall under digitalization strategy:

  • Digital optimization for improving existing processes and customer experiences.
  • Digital transformation by reinventing the wheel in how the company services its market and clients.

Let’s understand both alternatives through a practical example of a non-technology industry.

The retail boom – digital optimization or transformation?

Consider you’re running a retail company and want to implement the optimization initiative.

You can seek to improve inventory management, POS operations, warehouse cleaning and maintenance, human resource and staff management, or any existing processes for quick benefits.

Moreover, retail organizations can seek to partially or fully transform through personalized shopping experiences, subscription services, omnichannel experiences, smart products and IoT, and eco-friendly and sustainable solutions to reduce waste.

The right mix makes your digital ambitions dependent on various factors, including the state of disruption in the industry, the organization’s culture, and willingness to adopt technology.

Business optimization improving or optimizing existing processes

Most organizations favor the optimization end on the strategy development scale without compromising the company’s core USP or business model.

Although benefits from business optimization initiatives are near-term, they can be as worthy as digital transformation efforts with less risk.

Improve current revenue channels

Your company might want to incorporate AI-powered analytics and insights features to improve demand and supply forecasts and reevaluate prices and promotions models.

Furthermore, online customer service can significantly reduce the cost of delivery and improve retention. And digital marketing and sales management tools can encourage customers to increase and repeat purchases.

Better workforce performance

Due to a lack of sufficient technology-induced processes and tools on board, your employees might get stuck doing standard, repetitive tasks.

Technologies like robotic process automation (RPA) can handle such tasks, allowing your employees to focus on high-value tasks requiring genuine human input.

Quality customer experiences

Digital adoption comes with the potential to leverage both customer-facing and behind-the-scenes jobs to improve CX. For example, using efficient chatbots and enabling self-service features can ensure customer satisfaction.

quality customer experiences

In retail business, IoT technologies can calculate the length of queries, or the average time taken to restock products on shelves. Similar insights help support teams better understand customer preferences, frustrations, and pain points.

Digital transformation – redesigning new business models and products/services

Organizations brave enough to embrace digital transformation want to do more than simply craft a better version and build on top of their old selves.

As a founder or a senior executive, you might want to disrupt the status quo through new revenue streams, customer engagement channels, new product lines, or even fresh business models.

Also, modern, more powerful technologies are giving companies ample reasons to prioritize transformations over optimization.

Consider these powerful paradigm shifts uncovering alongside the S-curve: at the bottom of the curve, a new technology or tool has designed a new product or a business model. This innovative shift experiences a steady period of growth until a new counterpart takes its place, initiating a new disruption cycle all over again.

Speaking about the hype of “digital transformation”, it’s encouraging for non-technical executives to try to fully transform their company, but wholesome attempts often fail.

Hence, the best thing to do is to make an optimum mix of the above initiatives across processes and departments.

The music business changed for good!

Consider the example of the music business. The shift happened when Internet 1.0 enabled music enthusiasts to opt for digital formats like MP3s, which considerably reduced the costs and uncertainties in the physical distribution of music cassettes.

Similarly, subsequent shifts followed, like online retail, streaming services, production technology, and monetization and rights management, which ruthlessly demolished the market of cassettes and CDs.

Final thoughts!

This concludes our discussion on understanding the fundamentals of digitalization and its two essential categories that lay the groundwork for companies striving for digital superiority.

Whether you proceed with low-key digital optimization or full-fledged digital transformation, laying down your digital ambitions is important.

You might not even go for either approach; instead opt for digital technology enablement by employing technologies like cloud, SaaS, APIs, or digital channels.

However, this only starts your journey to developing an appropriate digitalization strategy and later leads to the execution part.

Also, you can consult top digital transformation companies like Enterprise64 on how they can help you understand and answer your pain points by working together as a technology partner.

Non Tech Leader’s Guide to Digitization

Sameer Sheikh

Executive Vice President at Enterprise64, has 19+ years of expertise in product management, systems analysis, and client relations. He excels at building high-performing teams and driving business success through strategic leadership.