01
What is Digitalization?
When we talk about digitalization, we have to talk about informatization and intelligence. Buddha nature says: Informatization is the past life of digitalization, and intellectualization is the afterlife of digitalization! I am accustomed to using a structured graphic to represent the relationship between things, and the relationship between informatization, digitization, and intellectualization is as follows:
Let's talk about informatization first, the definition of informatization in Baidu Encyclopedia's entry is as follows:
Informatization is based on modern communication, network, database technology, the elements of the research object are summarized into the database, for a specific group of people to live, work, study, assist decision-making and other closely related to human behavior combined with a kind of technology, after the use of this technology, can greatly improve the efficiency of various behaviors, and reduce costs, to promote the progress of human society to provide great technical support.
For enterprises, my understanding of "informatization" is more about realizing "business data". That is: the process of realizing the digital recording of business activities and processes such as production process, procurement process, sales process, customer service, transaction processing, and cash flow of the enterprise.
The core and essence of informatization is the use of network, computer, database and other information technology to realize the business process management and business data record of the enterprise, which focuses on business process optimization, and the typical tool is the information system, such as: OA, ERP, CRM, SRM, PLM, etc.
Let's talk about digitalization, the definition of digitalization in Baidu Encyclopedia's entry is as follows:
Digitization is the basic process of transforming a lot of complex and changeable information into measurable numbers and data, and then establishing an appropriate digital model with these numbers and data, transforming them into a series of binary codes, introducing them into the computer, and processing them in a unified manner.
For enterprises, "digitalization" is understood as "data business". That is, in the process of informatization, the long-term accumulation of data transaction data, e-commerce data, media data, industry data, user data, potential customer data, product data, etc., is constantly integrated into the management and business activities of the enterprise, through the data to find problems, find rules, find business opportunities, use data to optimize the business portfolio, optimize the business process, optimize the business model, and realize the sustainable operation, continuous innovation and sustainable development of the enterprise.
The core and essence of digitalization is to use digital technologies such as big data, cloud computing, Internet of Things, blockchain, AI, 5G, VR/AR to realize business and management innovation of enterprises and enhance their competitiveness.
Let's talk about intelligence, the definition of digitization in Baidu Encyclopedia's entry is as follows:
Intelligence refers to the attributes that things can meet the various needs of people with the support of technologies such as networks, big data, the Internet of Things and artificial intelligence.
For enterprises, intelligence My understanding is "production automation, intelligent decision-making". That is, on the basis of informatization, data, and digitization, through the application of relevant algorithm models, machine learning, robots, big data and other technologies, the traditional manual operation and human decision-making are replaced.
Therefore, I understand that intelligence must include two levels:
First, we have big data and use big data technology to realize big data collection, processing, real-time analysis, and automatic reports, which is not yet intelligent. Intelligence emphasizes intelligent decision-making, and it is not enough to have analysis results, but also to be able to make decisions and give instructions automatically.
Second, the use of artificial intelligence, machine learning, Internet of Things, automation equipment and other technologies does not mean that intelligence has been achieved. Intelligence emphasizes machine operation to replace people's manual labor and realize "man-machine coordination". Intelligence is not a simple mechanical automation, but under the action of big data, artificial intelligence, and Internet of Things technology, the machine has the ability of "intelligent planning, intelligent control, and intelligent execution", and completes relevant production operations intelligently, autonomously and automatically.
02
What is Digital Transformation?
Once you understand what digitalization is, it is not difficult to understand the digital transformation.
The so-called digital transformation, that is, the application of digital technology to reshape the information environment and business process of enterprises, its value is not only to increase efficiency, reduce costs and improve quality, but also to focus on enterprise management and business innovation. As Gartner defines digital transformation, it is the development of digital technologies and enabling capabilities to create a dynamic digital business model.
The key to the digital transformation of enterprises lies in the word "change", and what and why to change is the first question that needs to be considered. "Transformation" is a permanent topic, as long as the external environment such as the industry environment, political environment, economic environment, and technical environment in which the enterprise is located, as well as the internal material and cultural environment, there are changes, enterprises need to "change and transform" to adapt to the changes in the environment and maintain the lasting competitiveness of the enterprise.
Different people think about digital transformation from different perspectives, some prefer to discuss this topic in the field of technology, and some prefer enterprise management and business innovation. For enterprises, digital transformation mainly involves:
Technological transformation: Through the application of new technologies such as big data, artificial intelligence, cloud computing, and the Internet of Things, enterprises will realize the transformation from the traditional information construction with "business process" as the core to the data application construction with "data" as the core.
Business model transformation: Accelerate the business and management innovation capabilities of enterprises through the application of new production factors, new organizational models, new resource allocation methods, and new business models, and realize the transformation of enterprises from traditional manufacturing to intelligent manufacturing, from traditional marketing to digital marketing, and from traditional service models to data-driven innovative service models.
Transformation of organizations and people: The digital transformation of enterprises is a change in the traditional organizational mechanism and business model, which requires the personnel of the enterprise to change their inherent work habits and empiricism, and to improve their digital quality and capabilities. On the one hand, it is necessary for all employees of the enterprise to establish data thinking, use data to think about and solve problems, and on the other hand, it requires business and technical personnel to integrate their capabilities, so that business personnel can understand digital technology and technical personnel can understand business.
In short, digital transformation is about using digital technology to reshape the ability of enterprises to find and solve problems!
03
Why do businesses need digital transformation?
At present, all walks of life are talking about digital transformation, and some experts have proposed: "In the future, there are only two kinds of enterprises, either the original digital enterprise or the digital enterprise after transformation/rebirth", which is the inevitable trend of the development of the times and the inevitable choice of enterprises.
1. Digital transformation is an inevitable trend of the times
The famous writer Nicholas Negroponte once predicted in the book "Digital Survival" that in the digital living environment, people's mode of production, lifestyle, communication, thinking and behavior have taken on a new look. For example, the digital penetration of the factors of productivity, the digital reconstruction of production relations, and the comprehensive digitalization of economic activities have marked the material mode of production of society with a strong digital brand, and people have embodied a new digital politics and economy through digital government affairs, digital business and other activities;
Looking at this passage now, it's really hard to believe that it was written back in 1996, and each of the above has become a reality, and digital technology is accelerating the way people work, learn, and live.
From the perspective of historical development trends, enterprises must go through the following four stages:
Electronic stage: through the single application of computer technology in the office and production business of the enterprise, in order to support the electronic office of the enterprise and improve office efficiency. Representative technologies and tools: financial systems, OA systems and various MIS systems.
Informatization stage: Through the use of large-scale information systems, the reorganization and optimization of enterprise business processes are realized, business collaboration is realized, enterprise costs are reduced, and work efficiency is improved. Representative technologies and tools: ERP system, CRM system, etc.
Digitalization stage: As an important factor of production, data penetrates into the business activities of enterprise operation and management, and realizes "data-driven" management decision-making and business innovation. Representative technologies and tools: data governance, artificial intelligence, big data, cloud computing, etc.
Intelligent stage: On the basis of the existing knowledge of the enterprise, it can intelligently create and mine new knowledge, which can be used for enterprise business decision-making, daily management, etc., and form a self-organization, self-learning, and self-evolution enterprise management system. Representative technologies and tools: smarter and more complete artificial intelligence, big data, cloud computing, and other data products that help enterprises make intelligent decisions.
Digitalization is an inevitable stage of the evolution of informatization and an inevitable trend of the development of the times. In this wave of digitalization, every business will be unable to escape and will not be spared, either riding the wind and waves or dying on the beach.
2. The "new crown epidemic" has become a catalyst for enterprise digitalization
Under the "new crown epidemic", enterprises in all walks of life have been more or less affected and affected, ranging from difficult operations to bankruptcy.
Globally, the most severely affected by the epidemic are tourism, film and television entertainment companies, catering companies, transportation companies, real estate companies, construction and manufacturing industries. Most of these industries and enterprises have the characteristics of relying on offline consumption, labor-intensive, and continuous high-frequency transportation, that is, what we call "traditional enterprises".
According to an analysis report on the impact of the epidemic in the mainland, some enterprises in the mainland have not been affected by the epidemic, but have grown against the trend under the epidemic, especially in online healthcare, e-commerce, remote office, online education, online games, logistics and express delivery and other industries and enterprises.
You'll find that those who have grown during the pandemic are either "digital-native" or digitally transformed.
Before the pandemic, many companies were still on the fence about digital transformation, or even skeptical. The "new crown epidemic" has made all enterprises realize that digital transformation is not a choice but a must.
While the epidemic prevention and control work has brought challenges to traditional enterprises in terms of raw materials, employees, and management, it has also stimulated the demand for digital transformation such as remote office, video conferencing, intelligent manufacturing, and digital marketing, which objectively forced traditional enterprises to improve their initiative in digital transformation and became a catalyst for the digital transformation of enterprises.
3. Cost reduction, efficiency increase, and business innovation are the internal driving forces for the digital transformation of enterprises
Whether it is a traditional enterprise or a digital enterprise, whether the enterprise is toB, toC, or toG, its essence is still "profit", and "cost reduction and efficiency increase, enterprise growth, and business innovation" are the eternal goals pursued by enterprises.
The application of digital technology is conducive to reducing the cost of enterprises
A manufacturing enterprise has realized the online, data-based and collaborative procurement, production and marketing through digital technology, reducing the overall material and labor costs of the enterprise by 30%. For example, in the field of procurement business, based on the digital platform, the connection between enterprises and suppliers has been realized, and enterprises can not only query the specifications, prices, quality parameters and other information of suppliers' products at any time, but also comprehensively compare suppliers from multiple dimensions such as product price, quality indicators, delivery time, service, and credit, so as to "recommend" more suitable suppliers. At the same time, digital procurement can also enable suppliers to quickly respond to the bidding information issued by the enterprise, shorten the cycle of business processing such as bidding, inquiry, bargaining, procurement, and arrival inspection, and reduce the procurement cost of the enterprise.
The application of digital technology is conducive to improving the efficiency of enterprises
The application of digital technology enables the information of enterprises to be transmitted in an unprecedented way in depth and breadth. The leadership no longer needs to pass on information layer by layer, and the relevant data can be queried at any time through the digital platform, and the first-hand data can be obtained "through to the end". It greatly shortens the time for enterprises to obtain information, and helps leaders and relevant business personnel to make decisions quickly. At the same time, through the application of digital technology to carry out end-to-end real-time monitoring of enterprise business processes, it can help enterprises find business process bottlenecks and optimize business processes, so as to achieve the overall improvement of enterprise efficiency.
The application of digital technology is conducive to business growth
The application of digital technology helps enterprises achieve full-link and refined sales management, and drives enterprise efficiency improvement and performance growth. Through digital technology, the information flow and commodity flow of enterprises are opened, and the data integration of all channels, all scenarios and all links is realized, and the "people, goods and yards" of enterprises are reshaped. Through the all-round collection of customer data, it helps enterprises establish a 360-degree portrait of customers, and forms a recommendation engine based on customers' high-value behaviors and tag systems, which helps enterprises improve the response rate of business opportunities and the rate of winning orders. Establish a digital marketing system to realize the full-link digitalization from leads, business opportunities, orders to payment collection, multi-dimensional customer analysis, business opportunity analysis, and sales analysis, to help enterprises optimize market strategies, so that "good steel can be used on the cutting edge", so that the limited resources of enterprises can maximize their efficiency, and drive the growth of enterprise performance.
The application of digital technology is conducive to promoting business innovation
With the blessing of digital technology and big data, enterprises have a strong grasp for real-time monitoring of the "external environment" and "internal operation", respond to uncertainty with an agile digital system, and enhance the ability of enterprises to make quick decisions and implement quickly.
Digitalization can not only enhance the competitiveness of enterprises, but even reinvent the business model of enterprises. In 2013, an American drama called "House of Cards" became a phenomenal TV series in the Internet mode, and the broadcast of this American drama made a little-known DVD rental company a model of enterprise digital transformation. That company is "Netflix". The story of Netflix's digital disruption has been circulating on the rivers and lakes. Netflix has achieved business model innovation through a series of digital technology applications such as video content governance, user group viewing preference analysis, precise advertising, and omni-channel user reach, making the enterprise a great success.
04
How to transform the digital transformation of enterprises?
How to turn the digital transformation of enterprises? Regarding this issue, the author has proposed an enterprise digital transformation methodology of "1 target positioning, 2 supporting elements, and 4 action guidelines", as shown in the following figure:
1 clear targeting: what to turn and why to turn
In the digital transformation of enterprises, the most important thing to clarify is what type (what) and why to transform?
What -- What type to turn is, is to figure out what is the core strategic positioning and business goals of the enterprise? The transformation goals of Internet-related enterprises and traditional industrial enterprises must be different. For Internet-related enterprises, the use of digital technology to increase traffic or sales, digitalization is the law of their survival, and the lifeblood of industrial enterprises is product quality, output and innovation ability, and digitalization is an auxiliary and tool. Therefore, even if it is all digital transformation, the strategic positioning and business goals of different industries and enterprises should be different.
Why - why transformation, the business pain points and difficulties of different enterprises are different, and the pain points, demands, and problems of the enterprise should be sorted out through research, and the scope, direction and timing of transformation should be determined.
Two important supporting elements: organizational mechanism and data culture
Organizational mechanisms
The digital reform of enterprises will inevitably involve the adjustment of the organizational structure, and for a traditional large enterprise, the adjustment of the organization is far more difficult than that of other Internet enterprises. How to adjust the organizational structure, how to balance the interests of the people in the organization, and how to form an effective digital organizational mechanism are all testing the strategic vision, determination, action and leadership of enterprise decision-makers. Therefore, the digital transformation of enterprises requires strong support from senior leaders in action, and even take the lead in doing this, rather than just "shouting slogans".
Data culture
Data culture is a way of thinking about "thinking, speaking, managing, and making decisions with data", and the cultural atmosphere formed under the guidance of this mode of thinking. In traditional business management, information is in the hands of key personnel in key departments, information is asymmetrical, and people are accustomed to relying on authority figures, executive orders or directives, and personal experience to act and make business decisions. In the digital era, as the information that people have is becoming more and more flat, people will respect facts and data more and more, and learn to use facts and data to think and solve problems.
4 key action guidelines: system architecture, data governance, platform empowerment, and continuous optimization
1. System architecture: the right one is the best
The architecture here refers to the digital technology architecture, such as big data, cloud computing, IoT, blockchain, mobile Internet, etc. Among the many digital technology-based architectures, the digital middle platform is considered to be the first choice for enterprise digital transformation.
The advantage of the middle office architecture is that it can precipitate common and standardized capabilities in the middle office, quickly empower the front office business, and make the front office more agile in response to the business. As an important IT facility of an enterprise, the middle office still needs to be continuously improved, optimized, operated, managed, and maintained in order to meet the changes in front-end business needs and truly exert its value.
Regarding Zhongtai, there are some cases of failure in the construction of Zhongtai in the industry, and there are also many who are not optimistic about Zhongtai, and even sing the argument of "Zhongtai". I think this is too normal, when ERP was emerging, the industry was also full of all kinds of "singing and declining" voices, and even so far there are only a handful of companies that really use ERP and use it well.
But looking back now, from a holistic point of view, who can deny the historical contribution of ERP in the information age?
A good use of the middle platform can empower the business, improve business efficiency, and enhance the management and innovation ability of the enterprise.
However, not all the problems of the enterprise, as long as the "middle office" is all right.
In the design of enterprise digital transformation architecture, the middle office is one choice, but it must not be the only choice. Regardless of the architecture you choose, you need to first clarify the strategic positioning and business goals of the enterprise, and then adopt the appropriate architecture to support this goal.
What's right is the best!
2. Data governance: the way around the road
A typical sign of enterprise digital transformation is from process-driven to data-driven, in which data is an important resource and production factor. In the digital era, it has become a general consensus that data is the core asset of enterprises, and some people compare data to the "gold mine" and "oil" of the new era. Needless to say, the importance of data is needless to say, but in fact, the following problems are common in enterprise data, which need to be solved urgently:
- Dark data: Data is collected, processed, and stored, but not used for business purposes.
- Data silos: Information systems are siloed, with siloed data, inconsistent standards, and lack of relevance.
- Data quality: The data in the system is inconsistent, incomplete, inaccurate, untrue, and untimely.
Efficient use of data, improving business efficiency, and innovating business models are good news for enterprises. However, this gospel is based on the efficient use of data, and how to make efficient use of data has become a topic that must be studied in the process of enterprise digitalization.
If we compare data to "oil", then data can only be crude oil, which in itself has no great value. Crude oil needs to go through a series of quenching and purification processes such as heating, catalysis, distillation, and fractionation to produce products of different types and specifications.
In fact, the same is true for data, the original data is not put there, and only through a series of processing and processing processes such as collection, transformation, cleaning, and loading can a credible, high-quality and usable data asset be formed.
This process is what we call data governance.
3. Platform empowerment: dual-drive engine for business and data
In the past, enterprise management and enterprise transformation have always revolved around the process, from the earliest information system construction, moving offline business processes online, to enterprise informatization (ERP, CRM), and then to BPR business process reengineering. In the past, there was data only when there was business, but now with data, whether it can be turned to drive business is a problem that needs to be considered and solved in the digital transformation of enterprises. In the process of digital transformation of enterprises, it is necessary to have a suitable digital platform to support the establishment of a dual-drive engine for business and data to achieve "business data and data business".
Business digitalization means that data in the business process is effectively collected, processed, and stored, and data can be collected, integrated, exchanged, and shared.
Data businessization is a data-driven business, which means that with data as the core, the data assets of the enterprise are sorted out, and they are integrated, shared, and mined, so as to find problems and drive innovation.
The dual-drive engine of "business production data and data feeding back business" business and data plays a complementary role.
4. Iterative improvement: dynamic adjustment and continuous optimization
The business of an enterprise is changeable, the business goals or the scope of experience change, the business rules and implementation methods change, the organizational structure may also be adjusted at any time, the managers have higher requirements, and so on.
Therefore, the data standards, management processes, management systems, and technologies and tools used in the process of enterprise digital transformation also need to keep up with the development of enterprise business, dynamically adjust, and continuously optimize.
In other words, an enterprise's digital platform needs to have the ability to iteratively improve and continuously optimize, and through continuous polishing in practice, it can form an agile response to changing business needs, so as to continuously drive enterprise business innovation.
Written in the last words
Transformation means change, it means stepping out of the "comfort zone". When such a great change unseen in a century comes, we still use our inherent thinking and methods, then we may be waiting for death, just as Hegel said that "man dies by habit". Some people talk about "changing" and changing color, and they are more panicked about digital change. Digital transformation is not about subverting tradition, giving up experience, jumping out of the "comfort zone" and falling into the "panic zone", but through the application of digital technology, we can strengthen the perception of environmental changes, strengthen the learning of knowledge, and strengthen the ability to make decisions, so as to gradually expand the "comfort zone".
For enterprises, digital transformation is not only about upgrading technology, but also about improving the organizational system, upgrading the business model, and changing the way of thinking.
The greatest charm of business is its uncertainty and endless possibilities. The journey of an enterprise, like life, is long and tortuous, full of thorns but may be bright. The application of digital technology has enabled enterprises to improve their ability to identify and solve problems in order to cope with the unpredictable business environment, so as to achieve a great business empire.
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The article is transferred from: "Talking about data" public account Shi Xiufeng original teacher
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