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Digitization of Business: What Is This Digital Transformation?

Madeline Jacobson
8 mins
Converting info into digital format, also called Digitization of business.

“Digitization of business” and “digital transformation” have been buzzwords for more than a decade, but this terminology is still going strong for a reason. Digitization and digital transformation have become bigger priorities than ever as businesses have shifted towards hybrid work models and customers have increasingly embraced online channels.

Let’s take a closer look at what both of these terms mean and how knowledge management plays a critical role in digital transformation initiatives. 

Jump to a Section:

What Is the Digitization of Business?

What Is Digital Transformation?

Where Does Knowledge Management Fit In?

How Knowledge Management Helps Enterprise Digital Transformation

5 Best Practices for Digitizing Your Business

What Is the Digitization of Business?

According to Business Dictionary, digitization is the conversion of analog information to digital form with suitable electronic devices so that information can be processed, stored, and transmitted through digital circuits, equipment, and networks.

Put simply, digitization is converting information into a digital format, which is by no means a new concept. Digitization of business leads towards a more digital workplace. Often, leaders mistake this as meaning simply an absence of paper, but it can mean so much more. For some organizations, it can mean a different style of work, such as accessing information from mobile devices in the field and collaborating with remote workers in new ways. These process changes require more than just replacing paper documents with digital ones.

What Is Digital Transformation?

And then what about digital transformation? Digitization and digital transformation often get used interchangeably, but a new difference in the way these terms are used has started to emerge. While digitization may be a part of a digital transformation initiative, digital transformation also encompasses the changes to business technology, culture, and processes that drive better business outcomes, including a better customer experience.

By way of explanation, think about how your expectations as a consumer have changed. When you purchase a new phone and that phone immediately contains all your contacts and photos, that’s digitization. When you call your bank or hospital and your transaction history or medical records are readily available, that’s digitization. When Amazon Prime saves all of your card numbers and shipping addresses so that you can order anything that you need and see it on your doorstep in two days, that’s digitization.

Digital transformation doesn’t just impact customer interactions and transactions: it also changes business operations. As hybrid work models increasingly become the norm, businesses must adapt so that employees can work and collaborate efficiently, regardless of their physical location. Adopting cloud-based technologies that keep people connected and information centralized ensures that businesses are setting themselves up for success as the ways we all work evolve. 

The key here is that digital transformation requires a fundamental shift in thinking and opens up the possibility for disruption. Simply bolting on technology to an existing process will only get you so far. Businesses need a true digital information hub that connects employees and knowledge so that everyone can quickly access the information they need in the flow of work.

Where Does Knowledge Management Fit In?

Modern knowledge management systems serve as the digital information hubs that businesses need. They are at the forefront of helping organizations transform their manual and offline processes (physical documents, file cabinets, email chains, and word of mouth) into tech-supported systems. 

For example, let’s say your marketing team created a new case study. This case study will be helpful to both the sales and customer success teams. When your company has a knowledge management system in place, that document needs to be shared only once, in a central location, where everyone who needs it can access it.

When your company lacks a knowledge management system, the owner of that case study may answer dozens of emails requesting the same document. Or worse, other team members may not realize it exists and won’t benefit from the information it contains.

Allowing cross-departmental access to information is a building block of informed decision making and results in a much more engaging work environment. If you’re supporting different platforms across various departments, it’s impossible to make sense of the mass of information, content, and knowledge that should ideally be at everyone’s fingertips. It is essential for a digital information hub to be at the center of your digital workplace, integrating with other applications and centralizing important knowledge assets across the various channels used by your teams.

Analytics and Metrics That Matter

Another function that is becoming more important to organizations when they undergo a digital transformation is the ability to access analytical insights. With knowledge management software in place, you can monitor employee engagement to create an actionable report of how your team is working, what knowledge is helping them succeed, and where there are opportunities for improvement.

Being able to report on company knowledge engagement allows teams to have better insights into how they should be spending their time. Understanding what kinds of questions people are asking is essential to building your business’s knowledge base and improving operations. Spending time on items that don’t directly or indirectly contribute to overcoming challenges or result in a company win may not be worth investing time and money in. With a knowledge management platform, companies can be more proactive and make strategic plans, rather than being so reactionary to situations.

How Knowledge Management Helps Enterprise Digital Transformation

Knowledge management is a critical aspect of enterprise digital transformation because it helps businesses consistently extract the maximum value from the data, knowledge, and insights that exist across the organization. Here are a few of the benefits:

Harnessing the Explosion of Data and Information

Digital transformation is about creating a work environment in which digital tools–information, applications, processes–are used to create business advantage. But to put those tools to work, you need a way to easily control and manage the digital environment. A good knowledge management solution gets you there by providing a way to capture knowledge from everyone across the organization, as well as to organize it so that it’s widely accessible and usable. Without those capabilities, what’s the point of digitizing everything in the first place?

If you have an effective knowledge management solution in place, you can eliminate the risk of losing access to resources in the crush of data, or losing individual knowledge when people leave the organization and take their knowledge with them. Good knowledge management ensures that the information you create and collect as part of your digital transformation remains consistently available to be used for business improvement.

Accessing Information Across Devices and Locations

Remote and hybrid work have been on the rise since the onset of the covid-19 pandemic and are likely to remain popular work models in the post-pandemic world. In fact, Gartner estimated that 51% of knowledge workers and 32% of all employees worldwide were working remotely at the end of 2021.

With these changes in the ways in which people work, businesses are supporting more devices across more locations. And with so many different devices and platforms in play at work, organizations rolling out digital transformation initiatives need to be sure they have a knowledge management solution in place that supports information access across the entire spectrum of device technologies.

There’s no question that support for diverse devices is important to employees successfully communicating and sharing information with each other in any organization. But for some, diverse device support can also be essential for external, customer-facing interactions. In a company whose operations include a substantial customer support component, for example, the customer support team needs to be able to quickly and efficiently access, through whatever devices or platforms they prefer, the knowledge resources needed to resolve customer issues.

Imagine the impact on customer relations when a front-line support team member can’t get her hands on a key piece of technical information to resolve an issue because it’s not available through the device she relies on for most work communications. Or imagine the time wasted when she has to switch between that device and a company-issued device, depending on what information she needs and where the knowledge is stored. Knowledge management that supports information access across platforms eliminates problems like these.

Promoting Collaboration

Support for fast, easy knowledge sharing and collaboration is another hallmark of good knowledge management. A good solution will allow people to add to an organization’s knowledge base quickly and intuitively, without specialized technical skills, as well as make it equally simple for other people to draw on that knowledge. And it all needs to happen as part of a solution in which knowledge is well organized and easily managed.

Contributing and drawing on information in a well organized knowledge environment is one thing. But what about collaboration–connecting in real time to exchange information and share knowledge? That’s a vital capability and an important role for knowledge-based technology to play. An effective knowledge management solution should support real time and asynchronous collaboration so people can connect with each other.

5 Best Practices for Digitizing Your Business

Done right, digitization and digital transformation can help turn just about any company into a more customer-centric, high-performing organization. Here are five things you can do to accelerate your gains from digitization.

1. Take a Strategic View

Always start digital transformation projects with your end goals in mind. Think about what you’re trying to accomplish, and build a strategy around those goals. What do you want to achieve? A shorter process for sharing information internally? Speedier responses for when customers have questions? Only when you’ve defined the business objectives for a digital transformation project can you start to determine how you’re going to reach them. Set your goals first, and build out your project strategy from there.

2. Put Culture First

Investing in digital technology resources is an important part of digitizing your business, but it’s by no means the only component. If you’re just tacking on digital technology to automate the same old processes and practices you’ve always used, don’t be surprised if you continue to experience the same problems with productivity and performance. But if instead you treat digital transformation as a strategy for deep, fundamental improvements in how people work and how they work together–how they search for, find and share information, for example–you will realize its truly transformative power.

3. Couple Digital Tools with Talent

Digital transformation won’t work without team members who know how to get the most out of it. Take a two-pronged approach to the challenge of connecting people and digital tools: 1) rely on people with strong technical skills to guide your digital transformation, and 2) choose digital tools that are designed to be fairly easy and intuitive for the less tech-savvy to understand and use once they’re in place.

Ultimately, you want to create a culture in which everyone brings some level of digital awareness and skill to their jobs across the organization. The answer may be a mix of hiring new people based on digital talent and training existing employees to strengthen their digital capabilities.

4. Focus Your Efforts

Digitization has the potential to transform every part of an organization from product or service development, to supply chain and operations, to sales and marketing. And while it’s important to see the organization as a whole, and to pursue improvements across all these areas, that doesn’t mean you have to tackle everything at once.

As part of your digitization strategy, identify areas where your organization will benefit most. (For example, at Procter & Gamble, recruitment was one key area to be digitized.) Then balance that against where you can make significant changes quickly. This will help shape your thinking about ongoing initiatives and guide your investments in an enabling digital infrastructure to support them.

5. Set Your Priorities

What exactly is the best way to set specific priorities for digitizing your business? You have to decide what issues take priority and evaluate every potential project against those criteria.

Suppose your overarching goal is to digitize institutional knowledge about products or services. You may want to consider things like: Which information assets are sales reps requesting the most? Are some assets out-of-date or inaccurate? If so, should you rethink investing resources in digitizing them? What about the value of resources across the organization? Do you want to prioritize assets that both the sales and service reps in your organization use frequently? Whatever the goal, you need to establish a set of carefully considered criteria to ensure digitization will move you toward that goal.

Conclusion

Long story short: digitization of business means anything that can be digital will be digital. And by coupling digitization with a digital transformation strategy, businesses empower their employees to use technology to achieve their best results. Whether you’re looking to increase internal productivity, streamline training and onboarding, document processes and protocol to improve knowledge transfer, or all of the above, the right tools exist to ensure your organization is using technology in all the right ways, no matter where and how everyone is working.

This blog post was originally published in January 2017. It was updated and expanded in December 2021 with new information and best practices.

December 2, 2021

Harness The Power Of Knowledge Sharing With Digital Transformation

Companies that grasp what the digital workplace is really all about are willing to change the ways people and applications connect across their organizations. By fostering a digitally driven culture of collaboration, they break down silos, share knowledge more effectively and compete more successfully.

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