Definition: What does digitization mean?
Digitization has two levels of meaning: In a narrower sense, it refers to the conversion of analog data into digital formats—such as scanning documents or introducing electronic invoices. In a broader sense, digitization refers to the comprehensive use of digital technologies to optimize business processes, products, and customer interactions.
Digitization differs from Digital Transformation: While digitization maps existing processes digitally, Digital Transformation fundamentally changes the value creation logic and creates new business models.
In practice, digitization is often the necessary first step: Without digital data, networked systems, and automated processes, the basis for deeper transformation is missing.
The 3 levels of digitization
Level 1: Digitization of information
The foundation: Analog information is converted into digital formats. Paper files become databases, fax machines become email, card indexes become CRM systems. This level creates the data basis for everything else.
Level 2: Digitization of processes
Existing business processes are optimized and partially automated through digital workflows. Examples: digital order processing, automated invoicing, digital project management. This results in efficiency gains and quality improvements.
Level 3: Digitization of business models
At this level, digitization transitions into Digital Transformation: Digital business models emerge, existing revenue models are digitally expanded, and the entire value chain is reimagined.
Digitization in business areas
- Sales & Marketing: CRM systems, digital marketing, social media, marketing automation, content strategy
- Customer Service: Self-service portals, chatbots, digital customer journey, omnichannel support
- Production: Industry 4.0, IoT sensors, predictive maintenance, digital twins
- Finance & Controlling: Digital accounting, real-time reporting, automated invoice processing
- HR & Personnel: Digital recruiting, e-learning, remote work infrastructure
- Management: Data-driven decision-making, digital dashboards, AI-powered analytics
Digitization in SMEs: Status and potential
The digitization of SMEs in the DACH region has gained significant momentum in recent years, but major differences still exist:
- Advanced: Basic digitization (email, accounting software, website) has reached most SMEs
- Room for improvement: Process digitization (CRM, ERP, automated workflows) is still incomplete for many SMEs
- Great potential: Digital business models, AI usage, and data-based services are still new territory for the majority
The biggest levers for SMEs:
- Digitize customer interaction: Online appointment booking, digital quote creation, self-service portals
- Automate sales processes: CRM system, lead scoring, digital follow-up
- Digitize knowledge: Knowledge bases, digital process documentation, e-learning
- Use AI: Generative AI for content, analysis, and automation—delivering great effects even for small teams
Important technologies and tools
- Cloud solutions: Microsoft 365, Google Workspace, industry-specific cloud ERP systems
- CRM systems: HubSpot, Salesforce, Pipedrive—central customer management platforms
- Project and task management: Asana, Monday.com, Notion—digital collaboration
- Automation: Zapier, Make (formerly Integromat), Microsoft Power Automate—connecting processes
- Generative AI: ChatGPT, Claude, Copilot—productivity increases in all areas
- No-code/Low-code: Custom digital solutions without programming knowledge
How to start your digitization
- Determine maturity level: Where does your company stand today? Which processes are already digital, and which are not?
- Identify pain points: Where are you losing time, money, or customers due to analog processes?
- Set priorities: Focus on 2-3 areas with the highest ROI
- Implement quick wins: Start with quickly visible improvements (e.g., introducing a CRM, digitizing appointment booking)
- Engage the team: Training and change management ensure acceptance
- Ensure data quality: Digitization is only as good as the data—invest in clean data structures
- Think ahead: Once the foundation is in place, examine the potential for digital business models
Approach digitization strategically?
We help you set the right digitization priorities and develop sustainable digital business models.
Frequently Asked Questions
What is digitization explained simply?
Digitization means converting analog processes and information into digital formats and using digital technologies to optimize business operations. In the simplest case: instead of paper, you use software; instead of manual procedures, you use automated workflows.
What is the difference between digitization and Digital Transformation?
Digitization optimizes existing processes using digital means—the process remains essentially the same. Digital Transformation fundamentally changes value creation and creates new business models. Digitization is often the first step, while Digital Transformation is the strategic goal.
Where should SMEs begin with digitization?
Start with the biggest pain points: where are you losing the most time or customers due to analog processes? Typical quick wins: introducing a CRM system, online appointment booking, digital invoicing, cloud-based collaboration. Important: start small, learn fast, then scale.
What funding programs are available for digitization?
There are numerous funding programs in the DACH region: in Germany, for example, “Digital Jetzt”, go-digital, and BAFA consultancy funding. In Austria, the FFG programs and KMU.DIGITAL. In Switzerland, Innosuisse. These programs often cover 30-80% of the costs for consulting and technology investments.