What is Digitalization, its Opportunities, and Challenges? - Techylem
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What is Digitalization, its Opportunities, and Challenges?


What is Digitalization, its Opportunities, and Challenges?


While living in this super-fast digital arena, we have often heard the word “Digitalization.” Businesses, the economy, and in fact, society is experiencing a digital transformation. It has become a need now, and every sector of human life is shifting towards it.

But what exactly digitalization is? How is it beneficial for an organization? What are the opportunities it can provide? What are the challenges an organization can confront by having it?

This article will give you answers to these and many more questions. So let us dive deep into the concept of digitalization!

What is Digitalization?

What is Digitalization

Modifying business models by the adoption of digital technologies to create value by using advanced technologies is Digitalization. The aim is to upgrade processes by exploiting new digital dimensions and digitizing the flow of information.

Customers want businesses to be super fast and always available. They want to get services and products instantly. This drives businesses to transform themselves according to the needs of customers. To meet the needs of today, businesses are going online and adopting new digital transformations. 

Organizations start from a simple paperless environment and move towards heavy digital transformations like VR, IoT, and Blockchain, etc. It has now become a driver for the company’s internal and external affairs. In fact, it ends with streamlining the operations and delivering a new customer experience through high-tech applications and operations.

Businesses that do not go for digital transformation may go extinct soon. The reason behind this statement is that customers will lose their interest in their products and services. Nokia is one of the major examples in this context. It rejected to adopt Android Technology, and we no longer hear its name now!

Pierre Nanterme, CEO of Accenture, says in this regard:

Digital is the main reason just over half of the Fortune 500 companies have disappeared since the year 2000.

Requirements for successful Digitalization

We have seen the importance of Digitalization for a business. But it is very important to digitalize a business in the right way.  Because it is the only way to truly enjoy its fruits. Here is a famous quote about it:

When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.
— George Westerman, MIT Sloan Initiative on the Digital Economy

You must need to have certain components for it. Let us now see the components required for a successful digital transformation!

  • The development of an all-inclusive Digitalization Strategy.
  • To build a digital organization through evolution, revolution, and digital units.
  • Developing digital business models by Design Thinking, Lean Startup, and Agile Methodology.
  • Use of Agile Methodologies in product development.
  • Making a flexible IT infrastructure.
Requirements of Digitalization
Requirements of Digitalization


Here is a complete process for successful digitalization:

Step 1: Creation of the right mindset.

Step 2: Take the right leadership on board.

Step 3: Launching a Digital Business Center that ensures excellence.

Step 4: Developing a digital strategy to know the threats and opportunities.

Step 5: Develop and explore digital business skills and personnel (roles).

Step 6: Creation of a new digital business capability.

Digitalization Steps
Digitalization Steps

Benefits of Digitalization for a Business

An organization can have multifarious advantages through it. Here are some of them:

Benefits of Digitalization
Benefits of Digitalization

Flexible IT infrastructure

We can have a flexible and scalable IT infrastructure through it. As a result, we get shorter work processes with efficient outcomes.

Automated Production

We get automated and short by allocating production tasks through mobile and web apps.

Better Marketing

Improved and better marketing of the brand through spending less on ads, shorter time-to-market, and better targetting.

Increased Sales

By having a customized sales portal, we can automate it. And increase the number of sales by spending less time on it.

Controlled Finances

Efficiently using resources can reduce personnel costs. Also, by having an automated system, we can reduce the cost spent on human resources.

Improved Management

Managing things digitally is easier than managing them manually. It gives you to manage your business while you are not physically present in your workplace.

Enhanced Customer Service

Interacting with customers has now become so smooth and efficient. It is due to the presence of digital solutions like portals, tools for analyzing customer behavior, and prompt feedback.

Managed HR

Customized applications to manage your employees, track their activities, count their working hours, etc. 

Digitalization – A Complete Solution

It provides automation, faster and shorter work cycles, efficient management, and high performance. In short, it radicalizes your business to increase sales and generate leads.

Opportunities for Businesses

There are so many opportunities a business can have through digitalization. Let us explore a few of them:

Opportunities in Digitalization
Opportunities in Digitalization

Automation through Advanced Technologies

Advanced Technologies like Artificial Intelligence, Computer Vision, and Machine Learning has taken various sectors of life to automation. We find its applications in health, eCommerce, education, finance, manufacturing, and the list goes on. 

After the pandemic of Covid-19, these technologies are growing fastly, and many institutions are enjoying its fruits. These technologies will be matured in the upcoming 2-5 years, providing more automation and accuracy to businesses and other sectors of life.

Accelerating Customer Experience

Digitalization accelerates better customer experience. We can observe many retailers in our surroundings who have gone online and have built their eCommerce store. It makes it easy for the customers to buy things online then to physically visit a store.

There are also online chatting apps for better interaction and analyzing tools for knowing customer behavior. All these tools are very helpful in delivering a better customer experience, and it is increasing sales as well.

Redefining Customers Journey

This pandemic has given a 360-degree shift to businesses. Now, businesses are redefining their customer needs. Not only for customers but also for their employees as well. Airlines, stadiums, and banks are planning new seating plans using artificial intelligence algorithms. Companies are focusing on safety first, and work from home is a new normal now!

Challenges associated with Digitalization

Despite all these benefits and opportunities, there are so many associated challenges with digitalization. You will be surprised to know that these challenges are not due to a lack of required technology. But there are so many other reasons as well. Here are some of them:

Challenges of Digitalization
Challenges of Digitalization

Lack of Analytics

Digital transformation first requires to have a complete analytical data of the organization. Businesses be working for more than 20 years and still lacking analytical data of their customers and employees. The basic drive to have automation through artificial intelligence is to first have managed data about the organization.

Unfortunately, most of the organizations lack it that resists themselves to transform digitally.

Absence of Omnichannel

Customer experience is changing with the changing technologies. Traditionally, businesses have had one salesperson. But customers no longer rely on a single salesperson now. They want your website, they want your mobile app, they want you to be on social media, and much more.

These Omni-shoppers will look upon through various platforms, and it becomes a challenge for organizations to stay active everywhere.

Talent Acquisition

Organizations may think of digitalization and then start doubting their decision. It is not because they lack finances or the required technology but because of the right talent to drive it. The reason behind this fact is that it is not only the IT department that drives it. The top-level management has to teach everyone from top to bottom to drive it.

Enterprises need to have a proper strategy that stands out to drive digital transformation. Having dedicated executive roles for driving this strategy will also help.


Digitalization comes with many benefits and opportunities. It provides businesses to grow faster than traditional business strategies and better management opportunities. One can radicalize his/her business through it. But he/she first needs to have an all-inclusive digitalization strategy. There must be executive-level roles in an organization to drive it throughout the firm. 

Businesses need to understand their needs, collect relevant analytical data, and then go for digitalization.

If you need help for digital transformation of your business, Contact Us!
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Sources: Systems, AOE

Zubaria Zafar

Zubaria is Publications Manager at Techylem and a research student of Masters in Information Security at the National University of Sciences and Technology, Islamabad.