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.