# Impact of Digital Transformation on the Energy Sector: A Review
## 3 What is Digital Transformation?
### Digitization, Digitalization, and Digital Transformation  
In the course of our in-depth search and analysis of the phenomenon of _digital transformation_, we observed that the terms _digitization_ and _digitalization_ were used side to side, sometimes interchangeably and inferably for the term digital transformation. Therefore, before discussing digital transformation, it is necessary to grasp what digitization and digitalization mean because the three terms are often used together and sometimes interchangeably, which is a mistake. There are several definitions for \"digitization,\" which differ depending on the context. According to [15], \"digitization essentially refers to taking analog information and encoding it into zeroes and ones so that computers can store, process, and transmit such information\". Converting handwritten or typewritten text into digital form is an example of digitization, and it is the information you are digitizing, not the process--that is where digitalization comes in [15; 16]. The first use of digitalization can be found in an essay published in the North America Review in 1971 [17]. I-SCOOP [18], a digital business consultancy, has offered the following concise definition: \"Digitalization means the use of digital technologies and of data (digitized and natively digital) in order to create revenue, improve business, replace/transform business processes (not simply digitizing them) and create an environment for digital business, whereby digital information is at the core\" [18; 19]. Digital transformation encompasses a broader scope and significance than digitalization (automation). When comparing these three terms, it becomes apparent that they are distinct: we digitize information, digitalize processes and roles, and digitally transform businesses and their strategies. Each stage is necessary but not sufficient for the next. Crucially, while digitization and digitalization pertain to technology, digital transformation centers around the customer [15]. [PERSON] et al. define digital transformation in a Cappemini Consulting and MIT Sloan Management article as \"the use of technology to radically improve the performance or reach of enterprises\" [20]. While this definition highlights the widespread application of digital transformation, it fails to include the essential components required to achieve this transformation. Emphasizing the key elements necessary for digital transformation is vital, as it is unattainable and impractical without them [12]. Table 1 outlines the critical factors that differentiate the concepts of \"digitalization/automation\" and \"digital transformation\" [21]. Implementing technologies into business processes is only a small part of digital transformation. Technologies must generate additional value and synergy for the customers, the business, and other key stakeholders. \"To succeed in digital transformation, leading companies focus on two complementary activities: reshaping customer value propositions and transforming their operations using digital technologies for greater customer interaction and collaboration\" [19; 22]. Over the past 20 years, there have been many discussions regarding digital transformation and its various components, including factors that drive or hinder it, strategies for implementation, and its effects on different industries and businesses. Despite this, the concept of digital transformation is complex and can be interpreted differently depending on the context. As a result, there is no single definition of digital transformation that is consistently applied, and sometimes no definition is provided at all. When a definition is provided, it may be unclear due to being mixed with information about project success or cautionary notes. Alternatively, there may be a clear definition, but it differs from those found in other sources [1; 19; 23]. Hence, many researchers have worked to formulate a comprehensive and commonly accepted definition for this buzzword.