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This article is based on the sharing of Yang Linlin, CIO of Zhongshun Jierou, at the "Centennial Brand, Towards the New Consumer Health Digital Summit - and Entering Yunnan Baiyao".
In today's technological world, artificial intelligence (AI) is undoubtedly one of the most revolutionary and promising technologies. It provides intelligent solutions for a wide range of industries to increase efficiency, reduce costs, and spark innovation. Among the many branches of AI, generative AI and decision AI are two important and complementary directions.
Generative AI refers to AI technology that automatically generates a variety of content and services based on the needs and preferences of users. Decision-making AI, on the other hand, is an artificial intelligence technology that can automatically make optimal decisions and actions based on user data and analysis. How to achieve efficient integration of new technologies and services represented by AI? Zhongshun Jierou CIO Yang Linlin brought his understanding, and the following is the main content shared for him.
Yang Forest Zhongshun Jierou CIO
Hello everyone, I am Zhongshun Jierou Yang Forest, and I am very happy to have such an opportunity to share today. Jierou is the head enterprise of household paper, with a history of 45 years, if 15 years is the life cycle of an enterprise, Jierou has carried three rounds. In recent years, Jierou's actions and changes are very large, in today's domestic market, the traditional way has no way to run today's business, want to pursue better growth, can only use new ways.
The mainland is not a country of technology research and development, compared with Europe and the United States, we do not have our own operating system, nor do we have our own development language, our real strength lies in the application of technology. Today, with the birth of various new technologies, concepts such as AI, metaverse, informatization, digital intelligence, and new quality productivity are emerging one after another.
Therefore, I believe that it is not AI that will change this era, but the people who will control it.
In the digital age, what needs to be strengthened is cognition, not technology and tools, there are many excellent service provider partners on the market, but how to use these solutions requires us to think. The thunderstorm of the real estate industry, the disappearance of the demographic dividend, and the recession of the global economy are a bad era. At the same time, it is also a good time, the economic downturn has brought more possibilities for small and medium-sized enterprises, and if new channels can be explored based on digitalization and innovation, then it will bring more market opportunities. However, digital transformation is complex, and the boundaries are extremely blurred, and I think it makes no sense to blindly pursue digitalization and make a system in a fancy way. True digitalization is the transformation of people and enterprises.
Objectively speaking, change is very difficult, and it is not easy for the CIO himself, let alone the entire enterprise. In the past, we blindly asked consulting companies, and I believe that many companies are the same, and they have not thought clearly, so they pin their hopes on consulting companies for the development and business of the enterprise, which is not correct, and it is very dangerous to "rely on others to raise their own babies". So we have to think about our business. To be honest, the success rate of digital transformation is only about 20% today, and the success of vertical fields does not represent the overall success.
For example, a person who rides a bicycle to deliver a delivery and delivers one box a day feels very good. Building a car for him can deliver 20 boxes a day, which is a significant improvement from the perspective of efficiency, but is it really easy to land? Will he drive the car after it is built, who will drive it, how to plan the route, how to load the goods, these are all questions. In the end, it is the bicycle delivery that is the most comfortable, this is human nature, but also the inertia of thinking, which is the same as digitalization.
When you want to replace manual labor with some advanced things, you will find that the business's ability to understand the requirements is only 30 points, but the IT department's pursuit of digitalization is 90 points. This is a common pain point faced by many large brick-and-mortar enterprises, and "unmanageable" has become a difficult problem to solve.
What is the purpose of digitalization? I think there are four points to sum up, the first is to be able to make money, so that sales and profits can grow. The second is to save money and effectively reduce costs. The third is to improve efficiency, to achieve speed and efficiency improvement, not blindly layoffs. The fourth is to realize the transformation and sustainable development of business formats.
I agree that people are responsible for the integration of business and technology, rather than replacing business with technology, in addition to the Tao, law, art, and tools that we often talk about, "potential" is also very important. In the past, I worked for a company with a prevalent wine culture, and I wanted to talk to the business about its needs, so I had to drink from the afternoon to the early hours of the morning, and I tried to fit in, and entered their circle in the way that the business liked the most, and the needs were quickly clear. There are also some enterprises with strong management, such enterprises can do business standardization, but Jierou is not such an enterprise, but a fully flexible enterprise supported by humanity and culture.
If you want to do a good job in digitalization, you must integrate into the environment of the enterprise, follow the times, say it is "potential" at the big, say it is "circle" at the smallest, and do it well in a way that the enterprise can accept. If you don't have this awareness, even if you copy the best things in the industry, it won't work. And it's easy for the IT department to become an isolated department, the middle and back office of the enterprise.
Many enterprises are easy to ignore the business when doing digitalization, and must combine business and IT, and each system carries not only circulation and data, but also business models, so don't walk on one leg when designing, and it is worthless to talk about IT without business.
Today's enterprises have extremely high requirements for digital talents, requiring digital talents to understand strategy, technology, process, innovation, good communication skills, strong organization and coordination skills, and digitalization has been hyped to an unprecedented height. As a CIO, how to make the enterprise live better, manage the expectations of the boss and the expectations of the employees, do a good job of horizontal communication, and understand strategy and business. In recent years, there have been many low-code platforms on the market, which encapsulate some underlying technologies, which has led to a decline in the ability of technical personnel to a certain extent, and even the loss of basic coding ability.
What we need to do most at present is to turn the digitalization of retreat into pragmatism, talk about reform, and promote the development of enterprises. How, exactly, should it be done? I think it depends on the "potential" of the enterprise, the environment, be a person first and then do things. In addition, strategy, business, and technology must be deeply integrated, business growth is the only purpose, and speaking with performance is the most convincing, which requires us to have a big pattern, a big mentality, and know how to share profits. At the same time, it is necessary to have the thinking of capital leverage and resource integration, do not make digitalization a CIO alone, do anything, let everyone participate, and share the cake together, digitalization is a cross-departmental communication and coordination work, only let everyone feel that digitalization is their own business, can it be implemented.
For AI, we have also made some attempts, generative AI we have practiced in human customer service, digital humans, and the release of the underlying labor force, but objectively speaking, I don't think it has affected the company's overall performance. I think for small businesses, if you don't want to go for too much content depth, you can try it. But don't forget that no matter how smart the mobile phone is, it can't be compared with the SLR in taking pictures, and the professional is the professional. If it is a company with a certain scale and the pursuit of product depth, it is not recommended to try. I don't think the current generative AI is mature enough, and it still needs some way to go.
We have invested a lot of energy, algorithms, and data into decision-making AI. For example, based on the front-end consumption scenario, we solved a core question, that is, why didn't consumers buy the product at the price I wanted? Why can't good products sell? Where are the people, where are the fields, how to select the goods, the essential problem is the matching of people, goods and yards. So we built a massive model to divide the crowd, including silver-haired people, delicate mothers, and so on. At the same time, we also divide the field, which are high-potential stores. We made such an attempt in Hefei, selected 900 of the 16,000 stores, based on AI + algorithm and various models + data decision-making, explored the store selection model, product selection model, crowd selection model, etc., and the performance improved rapidly in 3 months, deducting the normal performance growth, bringing an increase of 50%. This model essentially answers the question: why aren't consumers buying our products at the price I want?
Another case is that we have done a delivery experiment, in the past it was a point-to-point delivery from the factory, and now it is a dynamic delivery, through the algorithm + strategy model, to find the optimal solution, to achieve a 5% reduction in the cost of multi-warehouse delivery in the local area of e-commerce express delivery in 2024.
Digitalization is more about outcomes than methods and technologies. Whether it is our offline business growth people-goods-yard matching model, or real-time sales model, market analysis model, marketing effect analysis model, omni-channel integrated marketing model, product life cycle model, and business opportunity insight model, in fact, the cost is not high, but we first let the business see the results, and then package it into a visual product, and then do the horizontal pull of data and processes behind it. It's not a clever approach, but it's more valuable to make the business aware first, and then form a powerful visualization system to empower the business.
Regarding AI, decision-making AI is the path that Jierou wants to pursue, why do we need to apply AI? For example, how to replicate the successful case of Hefei in Changsha, the brand bargaining power is different, the regional culture is different, the consumption portrait is different, the staffing is different, the investment is different, and the competitors are different, so we need to use AI to build a model to extract the success factors and carry out horizontal mutual support. This kind of support may not be 100% accurate, but being able to provide 80% of the support can also bring a certain effect. There are 80% "stupid" and 20% "smart people" in a business, what we need to do is to implement the behavior of "smart people", with the help of AI capabilities to reflect it with models, and the "stupid" to implement the practices of "smart people" and standardize business processes, which is where I think the opportunity for today's big consumer industry to break out of the encirclement lies, and it is also where the great value of decision-making AI lies.
Finally, I want to say that to do digital transformation, we must make it clear that business growth is the only purpose, and the IT department should not position itself as the middle and back office, waiting for the business to put forward needs, but should become a department that solves core problems, so that we can really talk about digitalization as a core strategic department to guide and promote business growth.
That's all for me, thank you.
END
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About the CIO Development Center
The "CIO Development Center" was established in 2005 by CIOs, informatization pioneers and media elites from well-known enterprises at home and abroad, with the purpose of "aggregating the power of Chinese CIOs and boosting the business value of CIOs". The center aims to promote the exchange of experience and knowledge sharing among CIO groups in enterprise management, IT strategy, informatization practice and enterprise digital transformation by building an online and offline platform for the communication of CIO groups, find benchmark enterprises and outstanding figures in informatization practice, improve the overall understanding of the role of informatization in enterprises, drive the overall improvement of the informatization level of enterprises, and accelerate the pace of digital transformation of enterprises. The center also organizes training on a variety of hot topics to promote the cognitive level of the CIO group in the professional and forward-looking field, and promote the professional quality and status of the CIO group.
This article is reprinted with permission from the CIO Development Center