~90% of business leaders report that digital transformation will be essential for business success. Digitization is the first step in the digital transformation process (Figure 1). Digitization entails converting paper-based text or other documents to digital format and organizing them. However,
- More than half of digital transformation attempts fail.
This article explains critical digitization best practices to provide executives with resources for digital transformation.
Figure 1: Digital transformation steps.
1. Follow a workflow and plan for the digitization project
Before starting the digitization process, it is important to have a clear plan for the digitization project. Establish a clear workflow for digitizing physical files to ensure that all steps are completed in an organized and consistent manner.
Alignment deficit is one of the common reasons for digital transformation failures. To solve this problem, top and middle management can agree on digital transformation plans, including plans for digitization.
For digitization projects, the following can be determined:
- The types of materials that will be scanned
- The format of the digital surrogates (i.e., the digital version of the physical file)
- The intended use of the scanned files
2. Scan documents for digitization
- Prepare the documents: Sort them, remove any staples or other bindings, and make their single page. If necessary, repair any damage to the documents before scanning.
- Scanning: This step involves scanning analog material into a digital format like an image.
- Use good lighting: Good lighting can help ensure that the scans are clear and legible. To boost the contrast between the document and the background, shoot in natural light (ideally daylight).1
- Use a document feeder: If you are scanning many documents, consider using a document feeder to speed up the process and reduce the risk of damage to the documents. Some automatic document feeders can hold up to 500 pages. Some scanners can also allow you to simultaneously stack multiple documents and scan them to various spots on your device or local network.
3. Leverage OCR & IDC to extract data from unstructured documents
Unstructured data and documents account for ~90% of enterprise data, requiring the integration of multiple technologies to convert them to machine-readable formats. 2. Physical files can be digitized using scanners and then scanned images. Other unstructured data can be processed by using optical character recognition (OCR) technology, intelligent document capture (IDC), or intelligent document processing (IDP) tool.
These tools can convert images and other materials (e.g., PDFs, photos, and handwritten paperwork) into machine-readable data, enabling document automation. This data can be used to
- Check documents for data quality issues.
- Categorize documents.
- Extract insights from documents.
- Generate new textual documents like invoices and contracts based on the extracted data.
For example, Fleet Hire Services, a car rental company, used OCR technology to digitize ~11,500 monthly car rental agreements. Using OCR reduced the need for manually entering data about rented vehicles.
4. Test the digitized copies
Before discarding the original documents, it is a good idea to test the digital surrogates to ensure they are accurate and readable. Testing can be critical for compliance with laws and regulations. For example, some United Kingdom National Health Service (NHS) requirements for archiving include:3
- Authenticity: Archived documents must be created or delivered by the individual purported to have done so.
- Integrity: Records need to be:
- Complete and unchanged.
- Secured from unpermitted modifications.
- Changes made after creation are identifiable, as is the individual who made the modifications.
- Usability: Records can be located, retrievable, and interpretable.
To ensure compliance with the archiving regulations for electronic documents, the following testing considerations can be beneficial:
- Quality assurance: Testing the digitized copies allows you to ensure that they are accurate and readable. This is particularly important if the original documents are discarded after digitization.
- Detection of errors: Testing the digitized copies can help identify any errors or issues during the digitization process, such as blurry or incomplete scans.
- Data integrity: Testing the digitized copies helps ensure the integrity of the data they contain. Important information may be lost or altered if the digitized copies are inaccurate.
- User experience: Testing the digitized copies can help ensure a positive user experience by identifying any issues that can make the digital surrogates difficult to use or access.
5. Create backup copies
It is important to create backup copies of all digitized materials in case the original files are lost or damaged because digitized documents are vulnerable to data loss or corruption due to hardware failures, software errors, or other issues:
- 21% of individuals have never created a backup.
Figure 2: Average cost of data breaches and their frequency (measured in millions of dollars) 4
If the original files are lost or damaged, and you do not have backup copies, the information they contain can be permanently lost. Creating backup copies of digitized materials can help protect against data loss and ensure that the information is still available if the original files are lost or damaged.
6. Use a consistent naming convention to store your digital files
Using the same naming convention for scanned files can make it easier to find and organize them. A document naming convention is a set of rules for naming files in a way that shows what they are and how they relate to other file formats.
File naming conventions can increase the probability of successfully searching for files and increase efficiency. Office professionals report that:
- ~93% of employees have difficulty locating the document they are seeking.
- ~83% of employees recreate a file because it cannot be located on the organization’s network.
7. Use content services platforms to store documents
For easier access, digitized documents can be stored on content service platforms (CSP). Content services let users store, operate, monitor, and retrieve documents from one place.
Content services platforms can offer cloud repositories to store documents (see Figure 3). CPS cloud services can offer:
- 1 TB storage space on the cloud for $75.
Figure 3: CSP features.5
Figure 4: CSP’s user interface for monitoring cloud usage.6
CPSs can be used for improved search capabilities for electronic file format (see Figure 3). They can offer:
- Improved search features for digital collections: Platforms for CS can organize digital files using metadata information. Metadata can be added to digital objects like text documents or images to provide additional information about the document, such as the date it was created, the author, and keywords that describe the content. The search feature on content service platforms can be used to look up these digital files.
- Predictive filing using AI: CS services can provide artificial intelligence (AI) services to forecast employees’ filing habits. AI can determine where to store files on the content services platform. Using AI in filing can reduce the effort involved in searching for documents.
CSP can provide version control to inform users about document versions. Version control is important during the digitization process because it makes sure that the most up-to-date version of a document is used. This is important to prevent files from being lost or overwritten.
Specifically, version controls can be important for digitization because
- Collaboration: When multiple people are working on a document, version control can help ensure that everyone is working with the most current version and that changes are not lost or overwritten.
- Auditability: Version control can help track the history of changes made to a document, making it easier to audit and identify any issues or errors.
CSPs can also offer editing layers to keep new versions of documents from being changed. With editing layers, changes made by different users can be saved in distinct layers. In digital image editing, layers are used to separate different components of an image (see Figure 5).
Figure 5: A document with editing layers.7
8. Ensure security for the digital copies
To prevent unauthorized access or data breaches, it is important to make sure that digital information is stored and sent safely. The cost of data breaches in the U.S. was about $9.5 million in 2022.8
Assess and categorize data
Classify digital information by sensitivity and business value. Discarding non-productive data is especially important if it contains personally identifiable information (PII).
Develop a data usage policy
Business data can be protected by limiting data usage and deactivating after a task. For example, the principle of least privilege—granting users the minimum permission to do their jobs—is a good approach.9 To restrict document reading and writing privileges to authorized users, role-based authorization can be used.
Utilize security-improving technologies
Privacy-enhancing technologies (PETs) allow businesses to leverage their data without jeopardizing privacy and security. PETs include:
- Use cryptographic methods: Homomorphic encryption and zero-knowledge proofs can prevent unauthorized access to sensitive data.
- Use content encryption for cloud storage: Content encryption can encrypt files in the CSP’s cloud storage. When files or videos are uploaded to the content-encrypted cloud storage, only employees with access keys can only view the content in the storage with content encryption.
For more on best practices in digitization, please contact us at:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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