Digitization and Digital Transformation: What’s the Difference?
Dallas-based BenefitMall is a general agency that gives thousands of benefits brokers access to more than one hundred carriers. In recent months, the company has made a concerted effort to encourage brokers to embrace digital transformation. They have plans to continue discussing the topic through blog and guest posts for the remainder of 2022. Note that digitization is not the same thing as digital transformation.
Digitization has been an ongoing pursuit in the business world since the first personal computers were introduced back in the late 1980s. What is now being called the ‘Digital Transformation’ is a relatively new phenomenon. Not only is it distinct and separate from digitization, but it also takes digitization to a whole new level.
Benefits brokers provide an ideal example to explain the differences between the two concepts. They are just joining the Digital Transformation now, so it is relatively easy see how they benefit from it.
Digitization Lays the Foundation
Joining the Digital Transformation starts with digitization. In simple terms, digitization is the process of converting paper documents, records, etc. into electronic equivalents. Paper insurance applications are digitized. They are converted to electronic documents and printed on an as-needed basis. Meanwhile, employee records are kept digitally. Information on benefits packages is transmitted as electronic documents rather than printed and distributed.
Digitization has been part of the benefits industry for decades. General agencies, brokers, and individual agents have embraced digitization at varying levels. But for the most part, much of the paper that has long fueled the benefits space has been replaced by electronic documents and storage.
The Digital Transformation
Converting paper to electronic documents lays the foundation for digital transformation. As for the transformation itself, it occurs when a benefits broker or insurance agent makes the decision to conduct as much business as possible online. Digital documents are absolutely necessary to the process. But the digital transformation goes well beyond PDF files attached to emails.
As a general agency, BenefitMall encourages brokers to make that transition to the digital world by using the latest cloud-based technology to do their daily work. The company has a portal designed around that very concept. Inside the portal, brokers can:
- Research – Carriers make their products available through the portal. Brokers can research and compare products from multiple carriers in one digital space.
- Quote – After doing the research, brokers can also quote various products for their clients inside the portal. They can prepare side-by-side comparisons sent to their clients directly from the platform.
- Subscribe – When open enrollment actually arrives, clients can subscribe to their preferred packages through the portal. Brokers manage everything digitally. There are no paper applications to distribute or collect. Manual enrollment becomes a thing of the past.
- Engage Employees – Believe it or not, some cloud-based platforms for insurance brokers allow them to engage with employees. They can communicate directly with employees who have questions about their benefits. Employees might also be encouraged to set up their own online accounts through which they manage their benefit options.
Of course, technological capabilities vary from one insurance platform to the next. Yet the overall goal is the same: give brokers the ability to conduct business online as much as possible. Keep all their apps, data, and communications in one central digital location. They become more efficient as a result. That gives them more time to grow their businesses.
It should be clear that digitization and the digital transformation are two separate things. The business world began embracing digitization a couple of decades ago. Today, more and more industries are pursuing the digital transformation.