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Digital Transformation Vs. Digital Modernization – Know the Differences

Digital Transformation vs Digital Modernization

The word ‘Digital’ is omnipresent across the globe. The digital perspective has caught hold of the world, and there is no looking back now. Now enters advanced terminologies like ‘Digital Transformation’ and ‘Digital Modernization,’ which look and feel similar but are not. These are mission-critical technologies that have been reigning across all industry segments.

They have their own set of features and objectives to achieve that can differentiate between them. Organizations often get confused if they should go in for digital transformation or digital modernization. Most of them are not even aware of what is the difference between these two technological terms.

This article emphasizes explaining both these terminologies individually and then offers a comparison matrix that can evaluate their differences and when to use what.

Digital Transformation – An Overview

Digital Transformation is a detailed digitalization process that offers a change in almost everything, including processes, people, ideology, and technology. This phase can be adapted by organizations of all segments and all sizes since it reinvents business processes to fit the novel digital era.

It helps companies maintain and enhance their agility, flexibility, and futuristic growth. It needs advanced tools and technologies, strategies, and roadmaps to implement newer ways and means to get into digital transformation. Since the approach is entirely holistic, it brings about a steady change in the working of the entire organization.

Latest advancements like AI, biometrics, drones, NLP, IoT, Blockchain,

It completely revamps the way organizations work, their customers operate, their daily activities are performed, their collaboration happens, and so on. It may take a little while for organizations to see its effect coming up, but once results arrive, there is a lot to enjoy.

Key Benefits of Digital Transformation

  • Enhanced customer experience
  • In-depth data-driven decision-making
  • Increased scalability and flexibility
  • Easy management of resources and infrastructure
  • Better team collaboration and coordination

Good Read: A CIO’s Detailed Guide to Digital Transformation

Digital Modernization – An Overview

Digital Modernization is an integrated process of embedding technological advancements into certain processes and watching its aftereffects till a stable result is achieved. It does not focus on all activities of the entire organization at the same time but takes up certain operational areas and modernizes them for the better.

It offers a stringent focus on offering a user-friendly interface for a great user experience. Newer digitally empowered visualization tools are implemented to get better insight from existing legacy systems through digital modernization. It is ideal for organizations who want to go in for digitization one by one and not take up the entire process together.

It is fit for businesses where digital disruption in one unit does not affect the others. Modernization can involve legacy modernization, IT modernization, or application modernization. It focuses on infrastructure and processes with a focus on providing an engaging UI and UX.

Key Benefits of Digital Modernization

  • Improved asset utilization
  • Better risk management and security
  • Increased reliability and accuracy
  • Faster and effective returns
  • Less disruption in the overall functioning of the organization

Digital Transformation Vs. Digital Modernization – A Detailed Comparison

The Similarities

  • Technology integration into operations
  • Organization level changes into processes
  • Efficiency in work, business processes, profitability
  • Changes in the way businesses operate
  • Continuous initiatives for organizational development
  • Align with business objectives and organizational standards

The Differences

 Digital TransformationDigital Modernization
OverviewHolistic organizational shift, involving almost all business operations. Recreation of processes with modern-day technologies.Technology updates for partial operational enhancement. Processes may remain same but could include modern-day technologies. 
Change Impact AnalysisIt changes the basic beliefs of the organization getting in novel ways of working and values with core focus on digital means.It adopts newer technology streams to replace legacy systems and implement newer ones.
VisionTransform the business into a more effective, innovative, and profitable one based on changes in business processes supported by modern technologies.Enhance business value by migrating legacy systems into modernized systems, with help of digital technologies and strengthen business workflows.
Technology InvolvementIt includes innovative technologies that can encompass the entire organization.It includes modern-day technologies that can affect a part of a crucial business sector for better efficacy.
Business Way of WorkingIt includes a change in the way business operates and its way of working bringing in basic workflow alterations.It includes migration of systems to technologically superior systems for better flexibility and resilience.
Sample StrategiesExamples are blockchain, Cloud transformation, automation, AI based development, no code development etc.Examples are application modernization, IT modernization,  legacy modernization etc.
Basic ObjectiveRevamp business operations and bring about basic changes to the organization’s workflow and processes.Shift legacy systems to migrate to modernized systems to increase the organization’s capabilities.

When to Choose What?

The selection between Digital Transformation and Digital Modernization finally depends on the specified needs and objectives of the organization’s organizational goals, market trends, budget, project timelines, and business competencies. Here are certain situations or cases that can help in making the right decision:

Choose Digital Transformation when,

  • Businesses want to stay a step ahead of the rest
  • Organizations want to keep themselves relevant in a swiftly changing scenario
  • Organizations want to achieve immediate global impact in a newer way of business
  • Companies are ready to change their complete ideologies and processes

Chose Digital Modernization when,

  • Businesses are facing a challenge with legacy systems
  • Organizations are having customer expectation issues
  • Organizations want to do things in a better and cheaper way, and that too one after the other
  • Companies are looking for returns by changing certain processes via digital solutions

Good Read: What is Technical Debt and Ways to Avoid It

On a Concluding Note

When it comes to creating a digital impact in business operations, both – Digital Transformation and Digital Modernization have their pros and cons. It is finally a detailed evaluation of the organizational goals and business plan to decide what to adapt to. The scenarios mentioned above may be helpful in selecting between the two.

Atrina, as your digital transformation agency partner, is experienced at combining deep industry knowledge with technical expertise to deliver tailored digital transformation solutions. There is a strong track record of successful digital transformation projects across diverse industries.

We can transform your business as we leverage the power of technology to enhance efficiency, drive innovation, and stay ahead in the digital era. Schedule a meeting with us, and we will be happy to help you undertake a modernized digital transformation for your organization.

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