In most cases, technical innovations that have a great impact on many areas of everyday live also have an impact on the language we use to talk about them. Sometimes, new words are introduced. Think of the internet or the smartphone, for example. In some cases, it is a little bit more difficult, especially when words that describe the new phenomenon already exist. But are they always fitting?
The so-called fourth industrial revolution we are witnessing today has brought a number of new terms. Industry 4.0, for example, a name the German government invented in 2011 for its high-tech strategy and the related research platform. The term is now accepted globally and has outpaced the American alternative of Industrial Internet (228,000,000 vs 72,000,000 results on Google).
Still, we are not sure how to talk about this process of transformation. Three terms are widely used without a clear distinction between them: Digital transformation, digitisation and digitalisation.
As of today, Google delivers almost six million results for the term “digitalisation” (5,970,000) and only a little bit more for the term “digitisation” (6,270,000 results). “Digital transformation” outnumbers these two terms by far with 34,200,000 results. But what are the differences between them? And what do they actually mean?
Both, the English Oxford Dictionary and the Cambridge Dictionary refer from the term "digitalisation" directly to the definition of "digitisation", which is a sign that both terms are used interchangeably. Additionally, the Google results show that both terms are used in similar frequency. The reason, however, why there are two terms in the first place, even though one would be enough, is simple: Digitisation has traditionally a much too narrow meaning to use it in the context of the process we are witnessing in the industry right now.
Three steps on the same road towards a changed society
Digitisation describes the act of converting analogue information into digital form that can be processed by a computer. This term would apply, for example, when converting old analogue pictures into a digital form. Simply speaking, digitisation is a much earlier step in the process of digital transformation. This is actually the step that happened before Industry 4.0, namely Industry 3.0, or the third industrial revolution (the first being the industrialisation beginning at the end of the 18th century and the the second – depending on whom you speak to – the introduction of mass production around 1920 or the rise of electric and chemical industries in the 1870s).
Digitalisation, on the other hand, is intended to mean a broader process of controlling, connecting and planning processes digitally. This is by far more the term describing the process of change happening right now in industries. Taking it one step further is the effect the digitalisation has on industry, economics and society as a whole. The results are transformed or newly developed business models, socio-economic structures and organisational patterns. This is what we call digital transformation.
However, this is a purely theoretical approach, while real-life language, on the contrary, is a living thing that does not submit to rules and definitions, no matter how well they are thought through. That is why people seem to use the terms “digitisation” and “digitalisation” in the same contexts.