Digital Transformation is the third step of your Digital Journey
Many “Digital Transformation experts” use the terms digitization, digitalization and digital transformation interchangeably. However, they have distinct meanings, particularly in the context of Supply Chain. They can be treated as steps in a process, starting with a literal conversion and ending with the creation of new digital capabilities, as shown below.
What Exactly do these terms mean?
Step 1: Digitization is the first stage where you convert your analog/manual processes into digital ones. This is where digital Supply Chain journey starts, with a basic switch. You could, for instance, incorporate automation by investing in eProcurement software from Coupa, Ariba or another vendor. This is often the most costly and time-consuming part of digital procurement.
Step 2: Digitalization refers to the use of active digital procurement processes. At this stage, you’ve made the switch, and it’s having an impact on operations. Now you should be monitoring every task and process to make sure that software or other technologies are having a positive effect. Automation in particular should save the company money each month.
Step 3: Digital transformation happens at a later point when a company has invested heavily in digital technologies. At this stage, a “digital first” model is adopted, and the business commits to a full and all-encompassing transition. Eventually, the digitalization of business processes will become ubiquitous, so unacquainted companies will be forced to catch up.