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Digitalizing business: The difference two letters can make

Is your business digitizing? Or is it digitalizing?

If you answer the question with another — Does it matter? — Gartner analyst Jan-Martin Lowendahl has something to tell you about his homeland.

“In Sweden, we don’t have different words for efficiency and effectiveness. You do,” he said to a group of IT leaders at the recent Gartner Symposium/ITxpo in Orlando, Fla. “You have different words for digitization and digitalization. Please use them.”

Digitization is converting information into digital form. Digitalization, which Gartner uses a lot, involves revamping a business model and providing new revenue-generating opportunities. Or as Lowendahl put it, “using those digitized assets and doing something completely new.”

Music makers

As an example, Lowendahl started with a pre-digital product, a vinyl record. Digitizing the analog album gave us compact discs.

“But please remember that CDs have the same business model as long-playing records: Two good songs, 10 crappy ones,” Lowendahl said.

In the early days of the internet, music service Napster figured out that people wanted individual songs, Lowendahl said, and let people share digital audio files. Apple improved on Napster’s innovation by introducing the concept of micropayments, very small financial transactions made online.

“Of course nowadays there’s a totally new business model. Nobody really buys the songs anymore; we rent them by the millions,” Lowendahl said, referring to streaming music services Spotify and Pandora.

Digitalizing higher ed

Lowendahl was presenting on technology trends that affect IT in higher education, so he gave a higher-ed example. Massive open online courses, or MOOCs, which offer an unlimited number of students an education over the web, are digitized. MOOCs that incorporate machine learning, a branch of artificial intelligence that enables computers to self-teach by ingesting and analyzing massive amounts of data, are digitalized.

Some can even grade students’ essays — “Not as good as your Columbia writing professor,” Lowendahl said. But a student can turn in a first draft at, say, 2 a.m., get notified of principal issues and then rewrite and submit the revision to a human grader.

“Then my professor can really deal with the higher-level points rather than the more mundane issues,” Lowendahl said.

Machine learning tools will play a huge part in research in the future — virtual assistants that read what we read and can recommend what to read next. And then there’s supercomputer Watson, which read 70,000 research papers on a tumor suppressor protein and came up with six new candidate medications in two weeks, Lowendahl said. The previous record is about one a year.

Digitalization is about creating content, Lowendahl said, “and that content is now code. Machine learning is going to help us do a lot of things better.”

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