Digitalization in the U.K.

“Digitalization” and “digital transformation” are terms often used interchangeably, which complicates our understanding of what “digital transformation” can mean--and does mean--for any particular industry or firm. For many, the terms “digitization,” “digitalization” and digital transformation” are interchangeable concepts. 

For some, DX is mostly about customer experience. For others it is about process transformation, new products, new revenue models or sales and marketing channels and practices. 

And different industries might have different priorities. Deloitte says a recent survey of Thai firms finds financial firms most interests in changing customer experience. Media, technology or telecom firms are more interested in new product development, while health-related firms are most interested in better business processes. 

source: Deloitte

For the U.K. Department for Business, Energy and Industrial Strategy, a digitalized energy system is primarily about collecting, protecting and understanding data, not a change of products sold, customers served or revenue models.

To be sure, DX can be a way of affecting and changing every business process. But some might argue “digitizing” is different from “digitalizing” which is, in turn, different from DX. 

Deloitte sees DX as different from “mere” use of additional technology. “Digitization” is the use of digital tools in place of analog. That might be seen as the substitution of digital technology for existing analog tools, but without a change of “what” gets done. 

 “Digitalization” is the change in any working process made possible by technology, and ideally allows reshaping processes to produce different outcomes. 

DX is the use of technology to change business strategy, which might include selling to new customers, with new products, in new ways. 

source: Deloitte

“By the mid-2020s, the strategy aims to have “established standards and regulatory frameworks in place that ensure best practice is met for energy data collection, accessibility, privacy and security.”

Ideally, there will be “significantly stepped-up visibility of assets across the system and new digital services such that stakeholders can understand what data exists and how they can gain access to it.” 

The process also hopefully will identify the next steps for digitalizing the energy system in the areas of data governance, market frameworks, data privacy and cyber security, while increasing market access and services.”

Note that all those goals are related primarily to the management of data and customer access to data. Less clear is whether--and how--different services might be provided. 

Beyond 2020, the goal is “system operators will have visibility of all energy assets enabling more accurate, efficient and cheaper planning, forecasting and management of assets, the department says. 

By then, it is hoped that new business models and entrants participating in the energy sector will emerge. It also is hoped the digital energy system will be a platform. 

So digital transformation actually comes last, after “digitalization” has allowed reshaping of business processes and capabilities. That is probably about right.