In recent years, we have witnessed the acceleration of the digital transformation that affects all levels of our society and particularly companies. However, this notion of “digitalization” can be quite vague for some people. In this article we have detailed all the elements that will allow you to better understand what it is all about. Enjoy reading!
What is digitalization?
Digitalization is the fact of evolving/transforming systems or processes thanks to various computer and technological advances.
The use of digitalization allows to optimize the daily life and to simplify a great number of steps.
Little by little, it is the whole society that is transformed and impacted by digitalization. Indeed, it is everywhere and is part of our daily life: automatic cash registers, e-commerce sites and online orders, the development of applications or electronic payment are examples.
What is the difference between digitalization, digital transformation and digital transformation?
In the digital sector there are many different terms that are often taken as synonyms, but which still have some differences. This is the case for digitalization, digital transformation or digital transformation.
These terms are very related, because there is a causal link between them. The starting process that brought about all these changes in our daily lives is the digital transformation.
The digital transformation started with the rise of the internet and digital systems. This transformation has led to the digitalization of a large number of processes such as our business models (the phenomenon of uberization of the economy which is based on new technologies) and information technologies.
All these changes lead to the digital transformation that affects all companies today. According to the definition, this digital transformation consists in using all current digital technologies to improve the performance of organizations and increase the general standard of living.
For example, the digital transformation will consist in digitizing all the paper documents of a company, the digitalization will consist in creating a server on which all these documents will be available and order them to facilitate their classification and the digital transformation will consist in modifying the practices of the users of a whole industry or a sector in relation to the digitalization that has been set up.
What is the digital transformation of companies?
The digitalization phenomenon is a process that has already and continues to transform all sectors of society. Thus, the professional world and our companies are also impacted. When we think of digitalization, we are tempted to believe that it only affects companies that are active in the New Technologies sector, but now they are all concerned, regardless of their sector, to start a digital transformation process.
Digital transformation impacts the entire value chain of the company, so it requires a deep transformation. It will really impact employees, their habits, but also all managerial practices, and even the company’s culture. The digitalization of tools is the first step towards digital transformation. This transformation concerns all of the company’s positions and the very way of thinking about the organization. For some it is a new industrial revolution.
The first organizations that went digital started in the 90’s by creating a website for their company. The goal of digitalization at that time was to have a new communication channel. Then we saw the digitization of the processes of support functions with the creation of management tools developed by competent companies. It is thanks to this software that employees began to be aware of digitalization, but at that time the digital transformation stopped there. It is with the arrival of startups, which, starting from nothing were able to compete with large firms and create new markets, that we better understood the extent of the phenomenon (example: Uber, Facebook …). From that moment, digital became strategic knowing that we saw a change in our consumption patterns. Indeed, users are more and more equipped and spend more and more time on the internet. Social networks are partly responsible for this phenomenon and for the increase of time spent on the internet. As for companies, they have followed this trend to be able to be where the users are.
The digital transformation has also had an impact on the business model of companies since with digital users no longer buy services, but will rent a service according to formulas defined by the company. The distribution and marketing of products is also impacted, because the web allows to reach a target directly without going through many intermediaries.
All these changes that are taking place in companies lead decision makers to set up complete change management strategies within their organizations.
Why is it important for companies to go digital?
As previously mentioned, digital transformation is for many a form of industrial revolution. It is therefore important to understand the magnitude of the transformation that has taken place in recent years. Thus, companies have no choice but to take this turn since all users/customers/consumers expect institutions and companies to change. It is necessary to be able to evolve and to propose a service in coherence with the new needs of the users.
Moreover, all companies in all countries are in the process of digitizing, and we have to make sure that we remain competitive. With globalization, this competition has increased and it is all the more important to be as advanced as possible on this digitalization. It is also important to be aware of all the opportunities that digital transformation can bring.
What are the sectors and professions that have been most transformed by digitalization?
The question of jobs and their evolution is often raised when we talk about digitalization. There are a number of jobs that will disappear or that have been considerably transformed. According to some studies, there will also be the creation of 10 to 20% of new professions in the space of a decade.
The sectors that have been most affected are material handling, office automation and secretarial work, accounting, banking and insurance, and cashiers and self-service jobs. Indeed, these trades have experienced a sharp decrease in the number of employees or a renewal of the jobs.
- The banking sector has been disrupted by the development of Fintech (financial technologies) which has led to the digitalization of most banking services.
- The accounting sector has been impacted by the arrival of a large number of accounting software programs that are able to perform accounting tasks autonomously.
- Secretaries or office workers have also seen their work penalized by digitalization. This position is now often outsourced to platforms and the use of technology has also been responsible for the decrease in the number of employees.
- For cashiers or self-service staff, digitalization and technological development have led to a real change in the profession. This sector has received a lot of media attention, but for the time being, cashiers still exist in most stores, even if their number has considerably decreased.
- Finally, concerning handling, the appearance of robots and remote control systems have changed the overall functioning of the profession. Robotisation has allowed a very important increase in productivity which has caused a great deal of harm to handlers. Physiological limits can be exceeded thanks to robots that can carry up to 500 kilos and they also limit the risk of accidents in this unsafe profession.
What are the advantages of digitalization?
As with any change, digitization has its advantages and disadvantages. However, the reason why digitization is so important in today’s society is that it has more advantages than disadvantages.
Among the main advantages, we find:
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Time saving and process optimization
Thanks to the digitization of processes, there is an obvious saving of time that has been observed and usually it is done on very repetitive and tedious tasks. Invoice management software is an example of this, it allows for the automatic follow-up of unpaid invoices.
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Simplification of communication
Whether in a company or not, digitalization makes communication much faster and more efficient. Indeed, the current tools at our disposal make the means of conversation very accessible and always more optimized. This is the case, for example, with the Slack interface which makes exchanges between members of a company’s teams and/or project groups very easy.
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Improved working conditions
Due to the simplification of processes and communication in companies, there is an improvement in the working conditions of employees. Often, the tasks that are improved by digital tools are very boring and require little thought. Also, it simplifies the daily life and limits the frustration of some employees and allows them to be more efficient.
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Data exploitation
Digitalization goes hand in hand with Big Data, as it has allowed companies to have more efficient access to data and to process it in a more intelligent way. As a result, organizations can have very effective ways to reach targeted prospects.
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Improved corporate image
Consumers today are very attentive to companies, their actions and their level of development. So, if a company is ahead of its digital transformation and uses innovative tools, it will give it a more serious image, of an expert company with highly trained employees.
How to implement a digitalization strategy?
There are several ways to implement a digitalization and digital transformation strategy. We are going to present you the 4 elements that allow the good implementation according to Gilles Babinet, who is currently the co-president of the National Digital Council and digital champion of France at the European Commission.
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Have a commitment from management and the CEO
The company’s director must be really convinced of the necessity of this digital transformation. Indeed, in digital, the number of hierarchical levels is reduced, so decision makers must show a great willingness to succeed in going through the process.
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Train all the staff
In order for this transformation to take place, all the company’s personnel must be trained in the new tools and the new practices that result from them. To do this, organizations must provide training that is adapted and designed for each function.
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Carry out the transformation in two stages
It is necessary to think in the long and short term when making the transition to digital. Indeed, there must first be a very important investment in hardware and tools and this should take about ten years. Then, it is necessary to make changes in the short term in order to allow employees to really see a change in their daily life thanks to digital and to wait for the real change which will take place in 10 years.
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Opening up the company through its culture
The success of the implementation of a digitalization is the opening on the outside. A company that has the ability to aggregate an ecosystem of participants at all levels of digital transformation will be more effective in its transformation.
How to measure its level of digitalization?
To measure the level of digitalization of an organization, several criteria must be taken into account such as its size, its positioning or its sector of activity for example. Based on this, it will be interesting to set KPIs (Key Performance Indicators) to follow.
Among the main categories of indicators, there are for example those that concern the commercial aspect with the increase of leads/sales thanks to a digital strategy or the complaints and requests of the customers concerning their user experience.
There are also operational indicators that look at the functioning of the new strategy and the analysis of the improvements or not in the realization of the missions. The number of tools made available to employees is also an interesting data point, as well as the number of support requests, which testify to the mastery of these tools by the teams.
It can also be interesting to measure the level of satisfaction of the teams in the implementation of this digitalization in their work.
Digitalization, which has led to the digital transformation of our society and our companies, has become unavoidable. With the health crisis of 2020 in particular, they have all seen the need to be able to adopt new digital tools to reinvent themselves and face the unexpected.
However, this transformation can be complicated to implement for some companies that do not have the knowledge of how to proceed with these changes. At Habefast, our experts are able to help you both in the reflection of your organization’s digital strategy and in the adoption of the new tools and processes by your teams.
