Digital conversion of legacy data utilizing data conversion services allows organizations to preserve and share their information. Digitization is a priority for many organizations to reduce dependency on paper and to improve accessibility to the required information, and this has increased the demand for document scanning services. Digitization safeguards audio-visual materials and converts them into machine readable format that prevents them from deterioration. The digital paradigm shift is growing and there is no return to the analog world. Moreover, digitization opens up enormous market opportunity for every organization by preserving heritage materials.
Use of digital technologies can boost economic activity. According to an in-depth study by Booz & Company, in the year 2011 digitization added $193 billion to the world economic output and created 6 million jobs. Their analysis revealed that an increase of 10% in a country’s digitization score results in a 0.75 percent growth in its GDP per capita. Digitization therefore is an economic catalyst, and the economic effect of digitization increases as countries move to more advanced stages of digitization.
Digitization is very significant for businesses because it has a deep and accelerating impact across the major functions of an organization, namely, business, marketing, production, and operations.
- It can reshape business models, and expand the market reach for organizations. The Booz & Company study gives the example of Skype that provides telephony to more than 500 million users across the world, persuading many to launch their own VoIP business models in response.
- Digitization is transforming how brands are built and marketed. It has made social media a very important marketing channel with an increasing number of subscribers making purchase decisions online, even for things they may buy offline.
- With digitization, companies can create products that are customized. An example given is that of BMW that offers a build-your-own BMW online service. This allows for more than a million different combinations in the finished product.
- Another important impact is how digitization has changed the way businesses manage their production assets. Now, labor-intensive tasks can be outsourced to emerging economies. New manufacturing technologies such as 3-D have emerged, creating a new way to manufacture complex products.
- The greatest impact digitization has is on the way companies organize and function to create competitive advantage. It allows organizations to utilize outsourced solutions, or automate their back-end functions and become more efficient.
In any developing economy, getting rid of paper-based processes is the first step in the digitization initiative. Take the case of India, which is transforming into a digital economy. The DIP initiative (Digitize India Platform) is aimed at large scale digitization of records and digitization is taking over governance, transportation, education, healthcare and banking. However, at least half of the government processes are paper based, which is a major stumbling block. It is estimated that the public sector is responsible for more paper than any industry in the world. This poses major challenges when it comes to processing and sharing information, and safeguarding confidentiality. There is also the possibility of human error.
In India, citizens demand easy, convenient and innovative ways of interacting with the government and getting the services they need. This has given rise to the e-government initiative that uses technology to deliver services. Internet based e-commerce is being popularized to reduce paperwork, ensure continuous availability of service to the people, reduce error rate and reduce the response time. This is sure to bring about increased efficiency for the government. E-gov or e-government will have the greatest benefits for the citizens because they can receive a wide range of information and services such as government forms and services, employment and business opportunities, tax filing, payment of fines, license registration and renewal, bill payment, information for research, and submission of comments to government officials.
Digital finance is now possible via mobile phones and the internet. This can dramatically transform the lives and economic prospects of businesses, individuals, and governments on a global level. Research by McKinsey Global Institute has found that widespread adoption and use of digital finance could increase the GDPs of all emerging economies by 6% or a total of $3.7 trillion by the year 2025. This would be equal to adding to the world an economy that is the size of Germany or one that is larger than all the economies of Africa. This additional GDP could create up to 95 million new jobs across all sectors of the economy. Other significant conclusions of this study are:
- Digitization would provide access to 1.6 billion unbanked people among which more than half are women.
- An additional $2.1 trillion in loans could be made to small businesses and individuals with providers gaining ability to evaluate the credit risk for a wide pool of borrowers.
- Governments could reduce leakage in public spending and tax collection, and thereby gain $110 billion per year.
- Providers of financial services would benefit with savings of around $400 billion per year in direct costs via shifting from traditional to digital accounts (which could be 80 to 90 percent less expensive to service.) They can increase their balance sheets by at least $4.2 trillion by expanding their customer base and thus increasing revenue opportunities.
Digitization services can provide valuable support in an organization’s path to complete digitization. In any modern economy, digital transactions are an essential part of its infrastructure allowing individuals, businesses and governments to perform efficiently and affordably. The business opportunity is amazingly huge for a range of companies – whether banks and other financial institutions, payments providers, retailers, telecommunication companies and others.