Digitalisation vs. Digital Transformation.

Is there a difference between digitalisation and digital transformation, and if so, is it an important one? The answer to both questions is yes. And although the expressions look very similar, there is a tremendous difference between these two things.

Emails, websites and in the meantime even social media as well as laptops, tablets and smartphones are widespread digital applications and technologies and have largely replaced non-digital solutions. This replacement process is called digitalisation and it does usually not significantly change the underlying processes or business models.

The most obvious examples of digitalisation are probably business letters and phone conferences. When usually a typewriter or telephone was used thirty years ago, we nowadays predominantly use emails or software like Skype, but it is still very similar processes and business models we follow, just using digital applications and technologies.

When digital transformation comes into play, we are talking about completely different business models, which means organisations change what they provide to their customers and the processes how it is provided.

A good example is the company Rolls Royce, which has successfully introduced a completely new business model when it comes to selling aircraft engines. Instead of selling their engines at the full one-off sum, Rolls Royce offers airlines to charge them by the hours they run the engine.It is not the value of the engines by itself which determines the rate per hour, but the flight performance which is generated. Rolls Royce has full digital access to these aircraft engines and is therefore able to provide the best possible service and maintenance. On the other hand airlines reduce their one-off costs when buying airplanes and can be assured that the engines are maintained properly throughout operations.

So the use and implementation of digital technology within or to connect existing processes and business models to improve efficiency or just to stay up-to-date is called digitalisation whilst its complete redesign by leveraging the potential of digital technology is called digital transformation.

We at negforce^® are strong in supporting organisations in adapting their structure, processes and work methods to make full use of the advantages digital technology provides. But even more important, we advise and accompany our clients during the preparation and implementation of digital transformation projects.