MIT Sloan Management Review Article on Don't Confuse Digital With Digitization

Digitization involves standardizing business processes and is associated with cost cutting and operational excellence. In essence, it imposes discipline on business processes that, over the years, were executed by individual heroes in a variety of creative (but not always optimal) ways. SAP, PeopleSoft, and other integrated software packages that burst onto the scene in the 1990s helped lead the way into more digitizing, but it remains a painful process.

Today, companies are confronting something new and different: digital. Digital, of course, is an adjective. It refers to a host of powerful, accessible, and potentially game-changing technologies like social, mobile, cloud, analytics, internet of things, cognitive computing, and biometrics. It also refers to the transformation that companies must undergo to take advantage of the opportunities these technologies create. A digital transformation involves rethinking the company’s value proposition, not just its operations. A digital company innovates to deliver enhanced products, services, and customer engagement. Digital is exciting, thrilling — and a bit unnerving!