One of the chief aspects within Productive 4.0 is standardization. With work package 6 intending to influence international standards on digitalizing the industry, there still seems to be some confusion regarding major terms: What is digitization? What is digitalization?
Even in technical press articles the two terms that in detail mean something different are often used interchangeably which in most cases may be due to the fact that both of them simply are used as synonyms for another more general term: the digital transformation. However, there are various levels of transforming. One is to convert something to digital form, the other is the conversion of production lines and complete business models by using digital technologies. The difference of the ambiguous terms lies in the scale and the quality.
Digitizing alone doesn’t cause transformation
In other words, scanning a document and thus digitizing it may be a good start. The next step, however, will be to use the digitized data and inserting the technology into an existing process in order to optimize the current value chain and business efficiency which refers to digitalization.
Based on the digitalization, the third step would be a digital business transformation. It goes further by changing the value chain and modifying the complete business model, thus creating new products and services.
So, when talking about optimized business efficiency and success or disruptive effects of the digital transformation, we mean digitalizing. Digitizing alone does not cause a transformation. It is the technical basis for the digitalization as a business evolution, which again prepares the way for a digital transformation.
Confusion on the internet
What adds to the widespread confusion is the fact that even Wikipedia leaves you puzzled. Looking for digitalization, the popular online dictionary will redirect you to digitization. Merriam Webster at least goes a step further by adding an example. One of the more precise definitions is found in the glossary of Gartner Research & Consulting Group.
Although it appears recommendable to know the difference in meaning, an interchangeable use of the terms is no disgrace. A close look at the searching behaviour on Google reveals that mainly in North America digitization seems to be more widely used than in South America and Europe where more people search for digitalization. In comparison, digitization has been slightly ahead but digitalization is picking up lately. A standardization effect of Productive 4.0 may help to consolidate the trend.