What is digitization?

It is appropriate for me at this stage to define what I mean by digitisation. In the context of this article, I mean digitization being the projects and processes required to increasingly manage information in digital form, whether that information was born digital (e.g. email, Word doc, Excel spreadsheet, eForms) or was converted from hardcopy (e.g. scanned documents).

Tactical advantages of digitization

The key tactical benefit of digitization is to improve the efficiency of core business processes – a benefit that comes through exploiting the tactical advantages offered by digitization. Capturing documents and data at the point of origin or receipt into an organisation allows for many tactical advantages including but not limited to:

• Eliminating transcription errors
• Implementing electronic workflow processes
• Creating audit trails
• Implementing security protocols
• Creating one source of truth for each document/item of data
• Improving accessibility to information
• Integrating business systems

The source of these advantages include the following digitization initiatives, processes, and activities:

• Document capture through scanning
• Digital capture of information through use of eForms
• Capture of metadata from both eForms and scanned documents to obviate the need for transcription and duplicate entry
• Optical character recognition to obviate the need for entry of data into systems
• Using workflow functionality to automate authorisation processes and create audit trails
• Version control
• Eliminating security issues with emailed attachments by instead sending links to a single source of truth in a database
• Making it easy to access all documents relevant to a business process by creating a relationship to other digitised records
• Improving searching of documents by completing content as well as title and metadata searches

To a person without records and information management experience, these advantages may not seem to be truly relevant to a business. They may not seem to deliver real benefits – financial benefits. However, that could not be further from the truth.

Tactical benefits of digitization

The advantages of digitization can be made to deliver clear, unequivocal financial benefits. Simple examples I have seen include:

• A university that reversed its enrolment declines by speeding up the processing time for new students by capturing application data via an eForm and using workflow functionality to automate the process. They additionally reduced the cost of managing the enrolment process by hundreds of thousands of dollars.
• A utility company automated data capture for new connections, eliminating errors and elapsed time taken for data entry. This reduced the time taken for clients to achieve a connection by several days.
• An insurance company automated and simplified application and underwriting processes by using workflow and image capture.
• A large company simplified and their process of assessment for worker’s compensation self-insurance by using a single source of truth document repository which related all records pertaining to their self-insurance. This saved tens of thousands of dollars in compliance costs and ensured their million dollar self-insurance premium savings were not at risk.

Strategic context for digitization

Whilst each of the tactical benefits of digitization are important, the context for discussing digitization in the C-suite should be strategic.

Digitization offers many strategic benefits, one or more of which may accelerate the implementation of a corporate strategy or increase the depth of returns that implementing the corporate strategy brings.

Big data

The issue which gets the headlines and the money invested in it for now is the concept of big data. In 2012, Gartner (Laney, 2014) defined big data as: “Big data is high volume, high velocity, and/or high variety information assets that require new forms of processing to enable enhanced decision making, insight discovery and process optimization.”

Big data tends to steal the limelight of the strategic benefits of digitization and for many organisations provides a clear strategic benefit. For example, imagine a large food retailer being able to mine their data on people’s grocery buying habits to form a view of the risks associated with providing the same people life insurance and differentiating the insurance risk by their buying habits.

Not all organisations have the volume of relevant data that enables them to gain the particular benefits of big data. The strategic benefits of digitization, however, are much more accessible to organisations than big data.

Governance and risk reduction

Digitization enables more transparent governance arrangements for all activities within an organisation. This is possible because digitization allows organisations to have:

• a single source of truth;
• workflow with audit trails;
• security protocols applied at the document, folder, person, position, or workgroup level; and
• automated measures of the success (or otherwise) of processes.

Through digitization is it easier for members of the executive and the board to have a clear line of sight over the execution of strategy, the measurement of its level of attainment, and the degree of compliance with policy.

Having a measured line of sight allows the executive to embark on continuous improvement, thereby reducing the risk of failures due to process breakdown or non-compliance.

Internal integration

Digital transformation of organisations which are geographically dispersed allows transparent sharing of cross-organisational information. In turn, this allows for governance at a regional and transnational level rather than a local level, which is the level to which the organisations using a hybrid of paper and IT systems are often restricted. The restrictions are caused by much of the information required for governance being available only in hardcopy, locally. Digitization makes it easier to form centres of expertise without geographic barriers.

Examples of internal integration possible though digitization include but are not limited to sectors such as:

• Health care
• Education
• Aged care
• Government services at all three levels (local, state, and federal)

And functions such as:

• Supply chain
• Human resource management
• Project management
• Procurement

As integration levels rise, organisations find that they can embark on continuous improvement programmes which not only have a positive influence internally but also externally with clients and with vendors.

External integration

Digital integration with clients allows them to self-select options and self-enter data and thereby take responsibility for their relationship with the organisation. Using web-based interfaces, we can allow clients to take responsibility for managing their own data whilst retaining control over the structure of the data and the form of the data, increasing both the efficiency and the transparency of the relationship between the client and the organisation. Mobile devices now make it possible to integrate not only client-sourced data, but also audio and image files, reducing further the probability of transcription errors.

On the other side of the coin, integration with vendors is almost mandatory to enable efficient relationships to develop with suppliers of engineering and construction services. The days of relying on the correct versions of paper plans being held in a drawing office onsite and drawing office at head office of both the organisation and the vendor are on their last legs. Organisations in those industry sectors are moving towards digital solutions as the technology to hold a single source of truth in one database and access it via an internet-connected mobile device.

As discussed before, digitization makes it easier for organisations to create centres of expertise. This applies equally well when that expertise is sourced from an external supplier.