Unlike digitization, digitalization is the ‘organizational process’ or ‘business process’ of the technologically-induced change within industries, organizations, markets and branches. Digitalization of manufacturing industries has enabled new production processes and much of the phenomena today known as the Internet of Things, Industrial Internet, Industry 4.0, machine to machine communication, artificial intelligence and machine vision. Digitalization of business and organizations has induced new business models (such as freemium), new eGovernment services, electronic payment, office automation and paperless office processes, using technologies such as smart phones, web applications, cloud services, electronic identification, blockchain, smart contracts and cryptocurrencies, and also business intelligence using Big Data. Digitalization of education has induced e-learning and Mooc courses.
Digitization has become one of the most important economic themes of the future, affecting not only the economy, but society as a whole. Due to the ever-changing economic environment and changing digitization processes, organizations can face a major challenge. Digitization can be defined as the conversion of signals and media objects (eg documents, images or sounds) into digital form that are processed, stored and transmitted via digital devices and networks due to the adoption of digital technologies and the use of systems built on them. Regarding digitalization, there are different levels of intensity: mere presentation and information (website), sales channel functions (e-commerce) and integration of business processes (e-commerce) into new business models with virtual products or services.
The academic discussion surrounding digitalization has been described as problematic as no clear definition of the phenomena has been previously developed.A common misconception is that digitalization essentially means the usage of more IT, in order to enable and take advantage of digital technology and data. This early definition, however, has largely been replaced by the above definition, now linked to holistic views on business and social change, horizontal organizational and business development, as well as IT.
It should be noted, however, that the meaning of digitization is not exactly explained by one and the same concept in the professional literature.
Finally, digital transformation is described as “the total and overall societal effect of digitalization”. Digitization has enabled the process of digitalization, which resulted in opportunities to transform and change existing business models, consumption patterns, socio-economic structures, legal and policy measures, organizational patterns, cultural barriers and the digitality of society itself.
Digitization (the technical conversion), digitalization (the business process) and the digital transformation (the effect) therefore accelerate and illuminate the already existing and ongoing horizontal[clarification needed] and global processes of change in society.