Digitalization: A Comprehensive Guide

If your business still runs on paperwork and landlines, it’s time to start thinking about digitalization. Digitalization is the process of replacing analog processes with digital ones. Embracing digital files instead of physical documents is the simplest example, but a fully digitalized office can do much more. Think about video conferences for remote workers, AI chatbots for customer support, and automated invoices for vendors. With the right strategy in place, digitalization can save time and money for both companies and their customers.

In our guide to digitalization, you’ll learn what the process is and how you can implement it in your own business. We’ll also explore some use-cases for digitalization in different industries, as well as some of the latest trends in the field. Once you create a successful digitalization strategy, you can look forward to faster, simpler, and less expensive workflows.

What is digitalization?

Digitalization is the practice of upgrading outdated analog workflows into modern digital ones. For example, a business might:

• Scan physical records to create electronic versions that can be stored in the cloud
• Share marketing materials via email and social media instead of traditional mail and local newsletters
• Communicate with clients via online video chats rather than landline telephones

In other words, if your business can replace a physical process with a computerized one, that’s an example of digitalization. Generally speaking, digitalized processes take less time, cost less money, and have less room for human error than outdated analog ones.

Digitization vs. digitalization vs. digital transformation

To understand digitalization, you’ll also need to understand two closely related terms: digitization and digital transformation.

• Digitization is the process of converting physical assets into digital ones. Scanning a paper document and saving it as a digital file is an example of digitization.
• Digitalization is the process of converting workflows from analog to digital. Having a policy of scanning all paper documents and saving them to a cloud server is an example of digitalization.
• Digital transformation is the process of converting a business from paper-first to digital-first. A company that doesn’t need to scan paper documents because it receives all of its correspondence online has undergone at least a partial digital transformation.

Digitization and digitalization usually go hand-in-hand. Digitizing your backlog of paper records is usually the first step in a wider digitalization initiative. A high-quality document scanner and powerful scanning software are vital tools for this process.

Benefits of digitalization

If you had to sum up the big draw of digitization in one word, it would be “efficiency.” Digital processes are not only quicker than outdated analog ones, but they also require less human oversight. Companies save time and money, while individual staff members don’t have to deal with as much busywork.

Some more specific benefits of digitalization include:

• Better operations: Digital document management helps workers quickly organize documents by content and tag. This indexed information allows near-instant access to key info. These types of improvements are a common benefit of digitalization.
• Stronger security: Data on an encrypted network gains protection. Login credentials help limit access to protected data. Automatic audit trails show who has accessed files or made changes. Automated backups allow for instant rollback in case of data loss.
• Lower costs: Digitalization can also reduce your use of expendable resources. Paper, printer toner, envelopes, and postage all quickly add up in expense. While digitalization may incur up-front costs, it will likely save you money overall.
• Automated workflows: From scheduled marketing email blasts to artificial intelligence (AI)-powered chatbots, digitalization can replace tedious manual work with automatic, preprogrammed processes. Employees get more time to focus on the challenging, specialized work that you hired them to do.
• Deeper insights: Your stored paperwork contains a lot of valuable information about your business. However, you can’t access those insights if your documents are locked away in forgotten filing cabinets. Digital data is easier to store, share, and analyze, especially with intelligent automation tools.

How to digitalize your business

How digitalization would play out at your business depends on the digital technology you already have and the business processes you need to replace. There are a few steps that every business should take, though:

1. Audit current workflows for digital solutions: If you plan to go digital, ensure digital solutions exist for all of your workflows. One way to prepare is to diagram your current workflows. Map where digital solutions might fit in or replace them. Then conduct thorough research on each tool. Investigate free trials and accumulate hands-on experience before committing.
2. Create a digital transformation roadmap: Overhauling your company’s approach may take time. Creating a digitalization plan can help you stay on track. As one of best practices, your plan should include each step in the process, from research through implementation. Assigning ownership of each stage to specific employees can ensure accountability. Setting a timeline can help identify when aspects of the transition need more attention.
3. Transition at a sensible pace: Trying to implement a business-wide digital transformation all at once is a recipe for confusion. Instead, transition elements of the business one by one, or a couple at a time. If one part of the transition takes longer than expected, the repercussions should be contained. This can help minimize disruption to the business.
4. Train employees: Digital transformations bring lots of new information for employees to learn. Educating and supporting them as much as possible is in your best interest. Ensure workers have access to experts on new tech. Encourage those who understand best to help their coworkers. That will promote a culture of mutual assistance.

How to build a digitalization strategy

A digitalization strategy is a formal business plan to update a company’s analog workflows to their digital equivalents. This strategy details changing procedures, anticipated challenges, and an execution roadmap. Remember that a digitalization strategy may (and likely will) incorporate both digitization and digitalization elements, so you may want to consider including a scanner and scanning software in your plan. A sheetfed document scanner, which can hold dozens of pages in an automatic document feeder (ADF), is a good fit for most businesses.

An effective digitization strategy should include:

1. Digital vision: Digitalization leaders benefit from having a clear vision of what they wish to achieve. This can take the form of a brief vision statement that lays out what the transformation will look like. Wherever possible, the vision should align with existing strategies.
2. Performance targets: The next step is to plan for accountability. Select key metrics that will reflect your progress toward digitalization. Go beyond revenue and profits if possible. Higher productivity is a great indicator of a sustainable transition.
3. Research and analysis: Cast a critical eye over your existing processes. Which areas could obviously be improved with digitalization? Which are worth investigating further? Which are fine as they are? Team members with IT expertise will be especially helpful in answering these questions.
4. Organizational buy-in: Employees sometimes fight the digitalization process, especially if they’ve used outdated analog tools for a long time. Listen to their feedback and demonstrate how digitalization can make their jobs easier. As one of the best practices, you should also provide training sessions that help employees learn how to use new tools.
5. Digitalization roadmap: A digitalization roadmap breaks down every element of the transformation timeline, step-by-step. Most include graphs and charts that organize tasks and estimate timeframes by department. A strong roadmap will not change every workflow at once. Focus on small changes to operational pillars where everyone can see results, then gather feedback.

Digitalization examples from different industries

The relationship between consumers and companies has changed in the last decade. Digitalization can help your company to keep up with new demands, no matter which industry you operate in. Consider these five digitization examples:

• Transportation: Uber began with its co-founders unable to find a cab one snowy night in 2008. The rideshare app was operating in 100 cities by 2014. The digitalization of the rideshare industry also led to taxis moving to upfront pricing, mobile pickup and return for U-Haul, and many more.
• Restaurants: Dine-in or take-out? That was the extent of your dining options for most eateries 10 years ago. The growth of DoorDash and its competitors rewrote the book. Now you can get delivery from a range of restaurants, some of which only do business through the app.
• Retail: Amazon, and its impact on digital commerce, needs no introduction. But the next wave of online specialty retailers is changing the playing field too. Think Warby Parker’s stylish but affordable eyeglasses and Purple’s mattress delivery.
• Fashion: Billing itself as a digital personal stylist, Stitch Fix collects consumer data about style and fashion preferences and uses it to put together bespoke looks for subscribers. Customers then receive a regular shipment of clothing and accessories picked especially for them. Fashionistas buy what they want and return what they don’t.
• Travel: Digitalization has turned a once-arduous process into a digital DIY that travelers can complete in minutes. Instead of visiting a travel agent and coming home with a folder full of paperwork, consumers can now book digital tickets through smartphone apps and share itineraries automatically via email.

What are the latest digitalization trends?

Every year, more industries are embracing digitalization. While every business is different, certain technologies are worth watching to determine where your own company should head next. Consider these digitalization trends as you work on your own strategy:

• Cloud computing: Investing in cloud storage is an essential part of the digitalization process, as it allows companies to store data online rather than on-premises. This can eliminate the need for in-office servers, storage hardware, and other costly maintenance tools and practices. Cloud computing also makes life easier for remote and hybrid workers, as they can access data from almost anywhere.
• Machine learning: For companies that want to incorporate AI into their workflows, machine learning can play a big part in digitalization. Machine learning is a way that AI systems can refine themselves over time, recognizing patterns and becoming more accurate without direct human oversight.
• Generative AI: Generative AI, or GenAI, is a type of artificial intelligence that relies on data and algorithms. This technology can create new content rather than simply organizing existing content. Most GenAI tools can also receive instructions and create outputs in plain English, letting everyday workers create anything from a catchy social media post to a fully functioning app. A newer technology, agentic AI, takes these capabilities one step further with fully autonomous AI systems.
• Internet of Things: Connecting physical objects to an internet network enables remote access and automation and can decrease the time spent on manual tasks. It can also make data management easier, particularly if you use a network document scanner.
• Distributed scanning: This process allows many physical stores of data to be fed into a digital archive at one time. Distributed scanning helps companies with large archives work through backlogs quickly. It’s also referred to as decentralized scanning.

Our recommendation: RICOH PaperStream Capture software

When your business embarks on a digitalization project, the first thing you’ll need to do is digitize your backlog of physical paperwork. Depending on the size of your business, you might need a high speed document scanner, an affordable document scanner, or something in-between. No matter what kind of hardware you buy, though, a good piece of scanning software is what will turn your physical documents into actionable information. We recommend RICOH PaperStream Capture.

PaperStream Capture boasts accurate optical character recognition (OCR) technology, which turns scanned documents into digital files with editable, indexable, searchable text. The software can also identify scanned documents, tag them with metadata, and route them to the appropriate folder. A RICOH PaperStream Capture Pro subscription will also allow you to automatically extract data as you scan, adding relevant names and numbers directly into digitalized workflows.

Contact us today if you’re ready to build your company’s digitalization strategy.

Note: Information and external links are provided for your convenience and for educational purposes only, and shall not be construed, or relied upon, as legal or financial advice. PFU America, Inc. makes no representations about the contents, features, or specifications on such third-party sites, software, and/or offerings (collectively “Third-Party Offerings”) and shall not be responsible for any loss or damage that may arise from your use of such Third-Party Offerings. Please consult with a licensed professional regarding your specific situation as regulations may be subject to change.