With integrated services, we work with customers to cross the cycle of digital transformation
To this day, I believe that all enterprises cannot ignore the proposition of "digitalization".
Since the beginning of the epidemic in 2020, digitalization has become a key word for enterprises. Under the circumstances at that time, the digital level of enterprises has also become a yardstick to measure the vitality of enterprises, and enterprises with high digital levels, even if they encounter various sudden crises, can focus on their own affairs in an orderly manner, and are affected by the external environment with minimal influence.
Arguably, the customer experience-centric, more personalized, more customer-sticky business model revolution has just begun, digital transformation has become an imperative, so should companies risk being marginalized in the new world and be coerced to move forward? Or is it to rise up for reform and reinvent the enterprise? I believe most businesses already have their own answers.
Today, digitalization has been elevated to the level of corporate strategy, such as CIO, CDO and other emerging positions, leading the company's business lines to digital transformation, starting from within the company, to create a newer enterprise form.
But we must realize that the core of digital transformation is still "people". Even if there are already many solutions for digital transformation on the market, if companies simply buy digital hardware and software, do not have a business model, corporate culture, or talent that can skillfully apply digital tools, then enterprises cannot be considered completely digital.
Therefore, we can see that some traditional enterprises spend huge budgets to buy digital solutions when seeking transformation, but because employees are not familiar with them, etc., tools have become the culprit that drags down the efficiency of enterprises. Therefore, we can say that it is more important to first identify the positioning of enterprises in the digital economy era than to buy tools.
"In this world that is not easy to determine, there are a few things that are certain," said Zheng Jun, managing director of Kyndryl Greater China, "the needs and preferences of users will continue to change, digital technology will continue to advance, business models will continue to emerge, so you need to establish stickiness with the end customer, in the past you can do it through channels and service providers, but now you need to do it yourself with a digital operating model, so you need to build digital capabilities and track his footsteps at any time. And be able to adjust continuously. ”
In this new world, opportunities are on the verge of erupting, but few companies are prepared for the challenges that precede them. Therefore, the integration vendors that can not only allow enterprises to purchase products and technologies, but also provide more complete supporting services are more friendly to the digital transformation of enterprises. Kyndryl, which was spun off from IBM and is now independently listed, is one such company.
Today, we also interviewed Jun Zheng, Managing Director of Kyndryl Greater China, to talk about the new era of digital transformation, how companies can reconstruct their digital transformation strategies?
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The following is a transcript of the interview, edited by 36Kr:
A magnificent change
36kr: Would you like to talk about some of the projects and achievements that you have been responsible for at IBM for more than two decades?
Zheng Jun: I was at IBM for almost 28 years, and for a long time I was in charge of the manufacturing business, and I was also responsible for the power and energy business, as well as some bank and regional general managers. The company that is now spun off is called Qindarui, and I am responsible for Qindarui's Greater China business. Reform and opening up has been more than 40 years now, we are fortunate to have experienced a stage of brilliant economic development since the reform and opening up, and witnessed the changes and take-off of many industries.
In the course of your work, you can see some of the interesting things that the industry leaders have experienced in the process of transformation. Some industrial transformation is generally the earliest from the product itself innovation, after this link is slowly reached, the transformation of enterprises on how to maintain the product can be continuously optimized, which is not only a product or research and development problem, but also involves the supply chain and the understanding of customer market demand, so the enterprise has begun business transformation.
It should be said that we have experienced some enterprise management models from completely manual, even with planned economy colors, to now have more reasonable processes to support business transformation experience, which is a very long process, but most of China's industries have successfully come over.
In the past, many companies aimed to become the world's leading enterprises, and in just 27 years, all walks of life have also appeared their own leading enterprises, a very magnificent process. After 20 years, with the continuous development of information technology and digital technology, the upgrading of products is not limited to standardizing the process, but also needs to be adjusted according to the fundamental changes that occur between me, customers or upstream and downstream, so this can be called a revolutionary process. It's not just Chindari or Kyndryl or IBM, it should be said that companies around the world face almost the same problem.
36kr: How do you feel when you hear about splitting?
Zheng Jun: When I knew that the team I led would do a brand new company, I felt that it was a very exciting news. Why? Under the digital revolution, the relationship between enterprises and upstream and downstream has undergone a fundamental transformation, and you can't just use process commissions to meet customer needs, so services have become very core content. Therefore, it is a very wise decision to separate the services into a separate business.
Today, we lead 2,000 to 3,000 employees in Greater China to face the digital transformation market with 90,000 Kyndryl employees around the world, which will write another more magnificent thing.
36kr: You also mentioned last year that 70% of China's enterprises are not successful, what level do you think Chinese enterprises have now reached?
Zheng Jun: China's digital development process is very fast, and many enterprises have already started this process. With the encouragement of the government, policy guidance and various assistance of the capital market, new technologies, new models and new industries have developed rapidly. I think the digitization process of the Chinese market is world-leading. The state has also formulated very good laws and regulations in terms of supervision and data security, which will be conducive to the development of Digitalization in China in the long run.
For a long time in the past, Chinese companies have been in a state of overtaking in curves, because our burden on business processes, personnel, etc. is very light. First of all, digitalization is the process of quantitative change to qualitative change of the impact of information technology on business, and in the past we usually used information technology to standardize the production process. But today there has been a lot of change, digital technology itself has changed the way people, enterprises and its upstream and downstream, and even the way it communicates with customers, and this communication process can also be traced, and this trace can represent a deeper understanding of each other. In the past, our business basically hoped that their products would be accepted by customers, so standardization was very important, but everyone's feedback on the product I did not know, but thanks to digital technology, this matter became possible, I can communicate directly with customers, can understand what customers are thinking, therefore, the business model of the enterprise has also begun to change, he has the opportunity to in addition to standardized products, through personalized services to meet individual expectations of products, it is also under such a premise, the concept of metacosmity has also been proposed, Therefore, this digital transformation I prefer to call it a "reinvention revolution".
With the deepening of digital transformation, the focus of development should shift to the coverage of digital business and the effectiveness of business models, and pay more attention to whether the management process is intensive and whether the talent structure is suitable, so that the digital strategy can continue to drive the development of enterprises.
Going back to the original question, why are the digital transformations of many enterprises not so successful? Maybe everyone doesn't realize that this is a revolution, will not break their traditional processes and existing products, as well as the current team and core competitiveness, such as retail, offline many stores are to build online stores, is this called digital transformation? I don't think it should be said that it is only the first link of the whole digital reengineering, and there are many links behind it, whether you can continuously improve yourself and meet the more and more expectations of customers, this is the more important point, so many companies still have many challenges.
36kr: So, what kind of capabilities do you think companies have to go to a more mature state of digitalization?
Zheng Jun: Digital transformation must achieve the following three major transformations:
First, the transformation of customer value relationship: In today's world, using digital technology to connect customers, connecting the ecology, is not a problem, the problem is when you establish a connection, what can you do to enhance the customer's expectations for this connection, and through the integration of all aspects of the ability to meet this expectation, so as to achieve customer stickiness. This is actually a service or as a service business model, and unlike the product model, service focuses on customer expectations, or customer experience, and realizes business value by meeting that expectation. This transformation is mainly the challenge for service enterprises, mainly in the application of information technology and the expansion of service content, while for product enterprises, the challenge is even greater, because enterprises need to establish a service model to complete direct interaction with customers. Such a transformation can be carried out through ecological cooperation, but it should be noted that in a digital world, customer data has great future value, so it is important to choose ecological cooperation partners.
Second, the transformation of digital human resources and innovation culture: Digital transformation is closely related to the change of corporate culture and employees' digital skills. First of all, enterprises need to transform the talent structure, otherwise they cannot understand the potential business opportunities brought by new technologies; secondly, the change of cultural atmosphere is also very important, digital transformation is a process of crossing the river by feeling the stones, both to have a lofty direction to formulate, but also from the bottom up, from the outside in, new ideas, new suggestions can continue to improve the customer experience, discover new opportunities, and achieve the continuous expansion of business value.
Third, digital transformation is a journey of continuous exploration: the concept of metacosmity shows that the digital process of our world has just begun, and the business world is the same, which is constantly changing in the wave of digitalization, so the digital process of enterprises cannot be a short process, it must be a process of continuous exploration, trial and error and iteration. We see that the organizational structure of many Internet companies is still constantly adjusting, which reflects this reality to some extent. It's a journey that requires constant exploration and change.
All of these are key elements of business success in going digital, which is really not easy, and traditional companies need such capabilities to truly participate in the division of power in the future world. So we may need some external help, imagine a partner who has rich experience in digital services and operations, but does not try to monetize the company's data resources in some way, but wants to help the enterprise to do it together; he has strong information and digital technology capabilities, and always grasps the direction of these technologies, but he prefers to empower this ability to business partners, rather than participate in the industry competition; he believes that digital capabilities are the key to the future. However, it insists that enterprises are the real industry experts, hoping to combine the ability of technology management services with the industry knowledge of enterprise customers to jointly create a digital transformation future. Kyndryl was founded with this in mind.
Be an integrated service provider
36kr: What role does Kyndryl play in the digital wave of the enterprise?
Zheng Jun: Kyndryl was split from IBM and positioned as a customer-centric service provider. This positioning has two very important characteristics: One is that we are a technology integrator who supports customer innovation. In the middle of today's digital wave, you will see that these digital technologies are showing a trend of accelerated development and accelerated change, so there are endless digital technologies emerging. Every change and innovation in digital technology has the potential to impact your existing business model and change what your customers expect of you. It's a big challenge for any business, so there has to be a way to master these technologies while being able to track their development.
Second, we are talking about customer experience today, allowing customers to establish the habit of using our products and services, this is not a one-time construction service, so Qindari's second positioning is to be a reliable operating partner for customers in the middle of its digital operation process, and I will help him to run. In this process of running, I face all the digital resources, and then analyze and organize these data resources to tell my customers what changes they expect and what adjustments need to be made.
Today, Qinda Rui is positioned to meet these two strategies, that is, to become the integrator of the latest information or digital technologies that are the most advanced, and to become a reliable operation and maintenance partner for customers' digital transformation.
36kr: What are Kyndryl's future planning goals for China?
Zheng Jun: In the past three decades, our customers are the world's leading large customers in various industries, they will continue to study new technologies with Kyndryl, so we have a very complete and advanced system to track, to experiment, to apply these new technologies to the customer's business environment, business scenarios, so that customers maintain their business position, which is a very important advantage of Kyndryl.
From an operational point of view, our capabilities today should be said to cover several important aspects of our customers' digital transformation or digital transformation, and we define our capability framework from six aspects. This competency framework is also of great significance for customers' digital transformation. Cloud computing, application software and data, enterprise core architecture, edge computing and workplace services, networking, security and reliability are some of the frameworks that are very important to us, and these technologies end up in the core enterprise framework to support the digital transformation of our customers and support our value proposition today.
36kr: Can the advantages of The Kyndryl solution be explained in detail with a few examples?
Zheng Jun: Let me give you three examples, the first of which is a global airport. Their goal is to enhance the passenger experience served at large airports. To this end, we and customers together combed the passenger experience tracking, positioned more than a dozen scenarios, and then used artificial intelligence to enhance the experience of passengers, such as crowded passages or long queues, etc., the application of artificial intelligence technology to these scenarios, this is what I mean through technology integration, to help customer service his users, improve the stickiness of products and services.
The second example is a very well-known smart terminal enterprise. He has launched a data business in China, which is also its most profitable business, but China does not have a platform for it to achieve digital services, so we provide such a platform, which requires very, very high user experience, basically uninterrupted. Such a platform construction has made this business have a very good landing in China, and at the same time it has become very, very profitable in China. What kind of example is this, that is, when the customer wants to build a product or service system but it does not have this capability, it can cooperate with Kyndryl (Qindryl) to use the digital service capability as a basic platform to establish a stronger customer stickiness service system. This system can help him significantly reduce costs even to more than 30%.
The third example is also a global logistics supply chain enterprise. We are through the construction of architecture, migration, the use of cloud computing, artificial intelligence, digital office and other full range of services, to help them rebuild IT and digital system, this system to help them significantly reduce costs can reach more than 30%, but also improve its efficiency and innovation capabilities. At the same time, this platform can also help them make cultural changes, as well as help them communicate with upstream and downstream, customers.
In the process of customer digital transformation, Kyndryl can not only help customers reduce costs and improve efficiency through their own capabilities, but also use the latest modern technology to enhance the content of products and services, while changing a company's culture and its ecosystem. This is something we are very, very proud of.
36kr: How does Kyndryl build its own service capabilities and empower its customers?
Jun Zheng: Kyndryl has six capability frameworks: cloud computing, application software and data, enterprise core architecture, edge computing and workplace services, networking, security and reliability. Such a framework is actually very instructive for companies to build their own digital capability architecture. By integrating these technologies, we serve the needs of our customers either in a project delivery model or in a long-term operational service.
36kr: Can you share what Kyndryl's main industry customers are?
Zheng Jun: There are all walks of life, including finance, manufacturing, discrete manufacturing, process manufacturing, retail, telecommunications and so on. It's not surprising that today in the middle of a digital environment, all walks of life are facing the same problem of change, so you will always have the opportunity to help customers make some changes. In fact, many of the disruptors in the wave of digital change, the successful disruptors of the revolution basically start from the 2C, because this part is the easiest to achieve change. We've also seen an opportunity to slowly start to 2B, and this should be linkage.
When the world becomes one ecosystem and another, it is also an inevitable trend, and only by doing what I said above will he inevitably become the winner of the new world.
36kr: Mr. Zheng, will you still go to the front line to contact those customers?
Zheng Jun: You have to go. I spend as much time as possible reaching out to front-line customers, because in Kyndryl's philosophy, I'm an integrator of technology, I'm a reliable operator of digitalization, but I'm not a practitioner of the industry, and the industry practitioner will always be my customer. Only through the practice of customers in various industries can I create business value through my digital technology capabilities and O&M capabilities, and customers are our core.
"At the heart of our success is the success of our customers"
36kr: In the future, with the gradual deepening of digitalization, in which direction will IT services develop? How will Kyndryl continue to lead the industry?
Zheng Jun: In the future, China's digital transformation market will usher in a very big growth. According to IDC's forecast, the size of China's ICT market will reach nearly $800 billion (793.7) billion in 2022, an increase of 9.2% over 2021, and continue to grow faster than GDP. Digital transformation spending will exceed $300 billion (3291) billion in 2022, an increase of 18.6% over 2021, and digital transformation remains a core strategy for enterprises.
The vast majority of this 9.2% growth rate is brought about by digital transformation. It is also foreseeable that the pace of china's digital transformation will become faster and faster in the future, and some very leading enterprises will emerge.
Secondly, more and more enterprises will interact with their upstream and downstream and customers, and cooperate with Edge Service, that is, as a service, and the emergence of this model is not accidental, because in the era of digital transformation, the speed and cycle of change will become faster and shorter. In such a process, enterprises will slowly cultivate their own capabilities, through service and service-as-a-service to quickly create their own digital transformation goals, directions, strategies and landing, in order to stand in an invincible position in the middle of such a large revolutionary wave. Kyndryl is positioned in this wave to supplement the shortcomings of our customers with our digital service capabilities and help them complete some of the capabilities needed to complete the digital transformation together.
As a professional digital service agency, in addition to using its strong technical capabilities to help enterprises integrate information technology to establish a new digital foundation, Kyndryl is more valuable to become a long-term partner of customers, explore the future together through joint innovation, and help enterprises establish new business operation capabilities in the digital world through empowerment.
36kr: Based on the current model of a service, what are Kyndryl's goals for the future? Will you broaden your service types?
Zheng Jun: There are basically two things to change an enterprise, the first is the development of technology itself, and the second is the improvement of the market or customer expectations for it. Kyndryl's goal is to be a partner in the digital transformation of enterprises. Our development strategy is to take the customer as the core, with cloud computing, application software and data, enterprise core architecture, edge computing and workplace services, networking, security and reliability and other six capabilities to become the enterprise in the process of digital transformation of technology integrator and reliable operating partner.
With the continuous evolution of technology, Kyndryl's advantages in mastering the technical capabilities required for enterprise transformation will become more and more prominent, and will continue to explore the future of digital transformation with customers, explore the possibilities of model innovation in the process of technological change, I believe that the future service model, service type will also continue to change with the needs of enterprise digital transformation, which is Kyndryl's market positioning and development direction.
This is a must-have, and we realized early on that our service offerings would change as technology changed as our customers' expectations changed. For Chindari, change is eternal, and the only core of our success is the success of our customers.