Digitization v. Digitalization – is there really a difference?
As it turns out, there is. Taking the wrong approach could doom your procurement transformation journey before it even starts. Confusion between the meaning of these two words is very common. Not only do people confuse the two frequently, some languages don’t differentiate – as we recently heard from Christoph Flöthmann, Co-founder at Akirolabs.
Digitization takes a manual process and puts it into a system or digital platform. The tasks themselves don’t change, nor does the essential nature of the process. This is a smaller step, one that is more comfortable for procurement leaders who are not ready for much change. It may not take advantage of the latest technological capabilities or fix problems that have plagued procurement for a long time.
Digitalization goes one step further – it questions everything, including the efficacy of the process and tasks that will be put into a digital platform. It considers the capabilities of the latest technology and asks, ‘How can I reimagine this work in this very best way possible?’ It is far more disruptive, in terms of the change it users in and the types of ROI it delivers. Digitalization is a reimagining, and takes a blue-sky approach to positioning procurement as a truncated advisor and strategic partner to the business.
For more from Christoph Flöthmann, listen to his recent Art of Procurement podcast interview, ‘Seven ‘Next Generation’ Procurement Skills’