With the importance of digital and technological integration in the workplace, seldom will you be able to open a business publication without finding an article about traditional firms and industries that are being influenced by digital innovators in some way.

It's pretty obvious that digital innovation is imperative for businesses in pursuit of maximizing efficiency. But it is important to understand the distinction between the effects of digitization and digitalization. While digitization represents the application of new data and technologies to existing business processes to reduce costs or improve effectiveness, digitalization, on the other hand, takes an outside-in—or customer-centric—view of the organization, and uses innovative strategies, products, processes and experiences to create revenue. It offers enhanced efficiency, but is mainly concerned with seeking new opportunities for generating customer value, often outside the confines of the traditional business model and industry norms. Furthermore, it often differentiates the brand from its competitors, but it may also cause disruption to the traditional way of conducting business.

The difference between digitization and digitalization is reflected in a clear divide between carriers that regard digital as a tool for incrementally improving their existing business activities and those whose aims are much more ambitious, according to a recent Accenture survey.