Digitisation and Digitalisation: What’s the difference?

In tandem with these changing times of rapid digital disruption and transformation, even language is becoming more disrupted.

One of the debates gaining momentum during networking sessions at events in ASEAN, especially in leadership circles, is a certain confusion surrounding the meaning of the terms —“digitisation” and “digitalisation.”

The two terms are often mixed together in informal conversations especially in leadership circles, and vaguely connect to the rising tide of digital transformation across all areas of life. To the digital natives – especially the “born-digital” startup community, the distinctions may not appear to be relevant. However, business leaders in the “brick and mortar” world need clearer definitions for their planning procedures.

So, let’s try to clarify what the emerging distinctions in the business community are.

Gartner has presented the definition that “digitisation” is about converting analog to digital content. In short: “Digitisation is the process of changing from analog to digital form.” A simple example is converting an analog music piece – vinyl record to a digital file. Or to convert “brick and mortar” to “click and mortar.”

Digitalisation and Transformation

And then Gartner moved to suggest that “digitalisation” is when you use digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business. Examples of this include converting and automating manufacturing processes under the control of digital technologies: this may be illustrated by automating what were previously manual workflows in producing new products.

Analyst firm Deloitte adopts a similar approach, suggesting that digitisation means ‘Doing digital’ while digitalisation means ‘Being digital’. So, it is not simply a matter of digitising the touch points, it’s also about transforming your traditional organisation into to a digital organisation, essentially making your company digital at the core.

Putting it in a populist terms, digitisation is when Star Trek’s teleportation device (pardon the Star Trek reference; I’m a Star Wars fan, truth-be-told), changes your body into digits whereas digitalisation is about transforming the whole process and business of teleportation with the latest technological strategies.

Therefore, I suggest that digitalisation is essentially rooted in the holistic process of transformation across different sectors and different areas of our lives. The potential for change is suggested by this journey of digitalisation.

When we adopt these clarified definitions, we will be able to communicate more efficiently about the potential for change in our vision, in our planning and in our achievement. Our conversations about digital transformation are rooted in the fertile ground of digitalisation.

A few words to finish: Malaysia Digital Economy Corporation (MDEC) is focused on building a digital future – Digital Malaysia – in a holistic manner, one which unlocks significant economic, environmental, and social values. The four strategy pillars of digitalisation we are using to achieve transformation are: to drive investments; build local tech champions; catalyse digital innovation ecosystems; and enable more digital inclusivity.

  • “Digitisation” is the process of changing from analog to digital form.” A simple example is converting an analog music piece – vinyl record to a digital file. Or to convert “brick and mortar” to “click and mortar.”
  • “Digitalisation” is a broader, more strategic word to embrace the holistic process of transformation across different sectors and different areas of our lives: digitalisation is when you use digital technologies to change a business model and provide new revenue and value-producing opportunities.

Datuk Yasmin Mahmood is the CEO of Malaysia Digital Economy Corporation.

Change and the Importance of Core Values

The only thing that’s constant in life and business is change. And change is best exemplified in the Information, Communications and Technology (ICT) industry which is constantly evolving for the better, with newer innovations to improve lives, and enable businesses to run more efficiently and productively.

Having been at Malaysia Digital Economy Corporation (MDEC) for more than three years thus far, after having spent my previous chapter at multinational companies such as Microsoft, Dell and HP; I have witnessed first-hand the power and magnitude of digital transformation that pave the way for the Fourth Industrial Revolution.

I have always thought of innovation as being the intersection between invention and insight. And with innovation comes transformation that transcends government, business and society for the better.

However, there is one aspect of transformation that is equally important. And that’s cultural transformation which, done correctly, brings positive benefits and significant changes within a company.

Allow me to share the MDEC example.

MDEC’s mission is to champion Malaysia’s Digital Economy, and for this to happen, it must be rooted in our core values and we must hold ourselves accountable to the highest standard of integrity.

Visitors to the Malaysia Digital Economy Corporation (MDEC) headquarters in Cyberjaya would inevitably see a statement of our core values on the ground floor. They are:

  • We serve the nation, and are here to help bring meaningful impact to our country. And we do so with utmost integrity, sincerity and accountability.
  • We are go-getters, and do things with passion, courage, agility and resilience.
  • We are forward-thinkers, and constantly look towards the future, anticipate change, are not afraid to challenge the status-quo and connect the dots to maximise impact.
  • We are collaborators, meaning we are approachable and respectful, and we believe in the power of partnerships and teamwork.
  • We have fun… are adventurous, creative and we inject “Wow (!) into everything that we do.
Photo Credit: Nurul Shafina Jemenon, New Straits Times

As CEO of MDEC, I am very proud of these values and the MDEC team – because I see my MDEC team bringing them to life on a daily basis.

These core values represent “our true north”, because they are what makes the MDEC team a highly impactful and highly collaborative one. Evidence of this is how the Digital Economy contributed some 18.2% to Malaysia’s GDP in 2015 and is expected to further increase in the years ahead.

However, corporate cultural transformation can be challenging.

At times, the MDEC leadership team and I have had to make some tough decisions to ensure that these core values and integrity continue to be at the heart of everything we do.

We have had to transform processes and to make them more transparent – and be seen as transparent.

I admire and respect MDEC Chairman Tan Sri Sidek Hassan’s position on “Zero Tolerance” or “ZeTo” on corruption.

It is a position MDEC as a company can relate to: MDEC has Zero Tolerance for any form of corruption.

Let me give you an example: Through our audit process in 2016, we uncovered issues concerning Foreign Knowledge Workers (FKW) Approval Process and Governance. This goes against the grain of what MDEC stands steadfastly for.

As a result, under the purview of the Board Audit Committee, we undertook an extensive audit and process transformation to drive transparency. This included:

  1. Engaging credible third-party consultants to undertake the Business Process Reengineering and an extensive forensic audit to validate issues that had been uncovered.
  2. The approval process was redesigned to make it a ‘committee-based’ approval system. Most of the changes came into effect in mid-2017. Since then, we continue to further fine tune and make improvements in the best interest of transparency.
  3. Issues that may have been discovered during this exercise would have been notified and reported to the relevant authorities.

Embarking on this clean-up exercise was no easy task. It required commitment, patience and most of all, courage – especially in the face of many obstacles and people who were against this positive change for a more transparent and fair process.

As one of the leading organisations in the nation, MDEC is also pursuing the Corruption-Free (also known as “IBR”) pledge with MACC. What this means is that MACC will have direct access to us and our people, myself included.

It pleases me to say that, when we announced this process, the MDEC Senior Leadership Team volunteered to be the first to go through this audit and to be checked. It’s very heartening because it shows that core values and integrity are not just corporate statements, but that the team is leading by example even if such a process may be perceived to be inconvenient and tedious.

Another initiative that MDEC is implementing is developing our very own Code of Ethics and Business Conduct.

While such processes may be time-consuming and tedious, it is our commitment to our core values and integrity that would ensure MDEC continues serving Malaysia and helping our country realise our digital potential to its fullest. Failure to see through such commitment would mean that we have let down the country.

At the end of the day, though, integrity is what defines us as people and as professionals.

Yes, change is constant and transformation is important – but what’s equally or more important is integrity and the core values within us all to always do the right thing.

This article “Change and the Importance of Core Values” also appeared on New Straits Times on 10 February 2018  at 1.21pm.

© 2017 Malaysia Digital Economy Corporation Sdn Bhd (389346-D). All rights reserved.