Digitalization is one of these words that we hear more often these days. The term is used very broadly. Here are the most common flavors – digitization, digitalization, digital transformation. There are tons of publications and theories about what does it mean and how it should be applied in practice. The terms are used so broadly and it is very hard to understand and decide if this term brings any value.
Here is what the dictionary says about digitalization.
Digitalization is the conversion of text, pictures, or sound into a digital form that can be processed by a computer. What is the difference between digitization and digital transformation? One of the most common differences is that digitization is applied to data (eg. invoice or text) and digital transformation is attributed to a process. Here is the one from Gartner IT glossary.
Digitalization is the use of 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.
Chad Jackson of Lifecycle Insight came with the video explaining digitalization. I like the video – it is short and sweet.
What is #digitalization? It is a new term that applies some old concepts more broadly. For development, it is based on a complete digital product definition, except going beyond mechanical to cover #electrical, #electronics, #embeddedsoftware, #systems and #IoT. It also includes the automation of development processes. This video covers it more in depth. Share if you can.
The main points of Chad’s video are to explain digitalization as a combination of two things – digital definition and processes.
1- Getting a complete digital definition of product
It includes a multidisciplinary definition of the data, allows you to keep people on the same page, has the ability to assess performance and collaboration. In other words, it is a complete set of information representing a single source of unambiguous truth.
2- Executing processes and procedures
Digital process management includes task, change management and tons of other activities that need to be covered. Digital processes are covering an interaction between complete definition (data) and activities.
I liked Chad’s explanations. However, what struck me at a certain point that the word “digitalization” can be taken off without actually impacting the meaning of the activities and data definition. In the past, we had PLM definition of a single version of the truth. That’s stays… Moving forward, processes like change management were also introduced a long time ago.
Last week at ACE 2019, Aras CEO and founder Peter Schroer call out CAD salespeople are selling CAD modes as Digital Twin Scam. Maybe digitalization is another form of scam basically not adding anything meaningful and significant to existing technologies and products?
What is my conclusion? Digitalization is a new term that applies some old concepts. Do you think digitalization is a sleek marketing word following modern buzzwordy and meaningless characteristics? This is a question I want to ask. Do we have something meaningful that can differentiate old school single version of truth and processes from its new digital forms? What do you think? For the moment I can see it more like an annoying buzzword, but I want to give it more thinking. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud-based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.