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Digital transformation is imminent
With the rapid development and wide application of new technologies such as “cloud, big things, smart things”, digitalization has become a strategic choice for economic and social development in countries around the world, and the level of digitalization has become an important indicator of a country’s or region’s modernization level and comprehensive strength. The deep integration of network information technology represented by the Internet, big data, and artificial intelligence with the real economy, especially the manufacturing industry, is constantly subverting traditional manufacturing models, production organization methods, and industrial forms on a global scale, and accelerating the transformation and upgrading of traditional industries.
The accelerated application of the new generation of information technology may subvert the original business model of mature enterprises, break the original industry structure, and reduce the existing market position to zero. In the face of disruption, no enterprise can turn a blind eye for a long time. If an enterprise wants to develop sustainably, it cannot just rely on past successful experience, but must dare to truly “change its own life”. In an era of great change, if there is no gene for change, the characteristics of change, and the pursuit of change, it will soon be eliminated by the times. No matter how old a company is or how mature an industry is, there is always the possibility of being disrupted.
In 2018, Yang Hua, then chairman of CNOOC, wrote in an open letter: Recently I often feel a kind of anxiety. According to Kurzweil’s law, digital technology is subverting many boundaries and rules like a tsunami of exponential growth scale. This is still the case in the “rich and powerful” energy industry. For most traditional companies in fully competitive industries, comprehensive digitalization is by no means a multiple-choice question, but a must-answer question. There may be only two types of enterprises in the future: one is a digital native enterprise, which operates and develops in a digital and intelligent manner from the very beginning; the second is a reborn enterprise through digital transformation. In the era of digital economy, enterprises have no choice but to evolve. In the face of major development opportunities, whoever can follow the development trend, grasp the historical trend, and play the first move well will win the development initiative.
Problems and difficulties faced by traditional enterprises
Under the vigorous publicity of the media, the necessity of digital transformation has been widely known, and many enterprises have started digital transformation since around 2016. In the past few years, the author found that some enterprises have achieved initial results in digital transformation and have entered a period of rapid digital promotion; The problems and confusion mainly include the following aspects:
The first is “not seeing clearly”. Digital transformation is a fashionable concept, but it is also a concept with extremely uncertain connotations. There is no authoritative explanation for what is digitalization and what is digital transformation. Leaders want to transform, but don’t know where to turn. The reason for not being able to see clearly may be that the outside world has changed too much, or that the strategic vision of the leaders is not enough. Many companies blindly follow the concepts of the outside world, passively follow the manufacturers’ plans, and ignore their own real needs. The seeds of transformation failure were planted from the beginning.
The second is “unwilling to transfer”. Many companies have a very glorious history. Although internal and external troubles have continued in recent years, many people, especially middle managers, are still unwilling to change, still immersed in the original achievements and unwilling to wake up. Talk to them about transformation, they He spoke clearly and soundly, but he was unwilling to take action. The superficial reason for his refusal was that the plan was immature and the transformation was risky. The real reason behind it was more of the fear of transparency and the unknown.
The third is “not daring to transfer”. There are also some companies that have realized the necessity of transformation and have a full understanding of the difficulty of transformation. They know that transformation is not a simple application of technology, but a systematic project involving strategy, organization, business, process, In all aspects of operation, management, and personnel, the capital investment is large and the duration is long, so it is difficult to see benefits in the short term. Faced with such a huge challenge, many companies procrastinate and dare not make up their minds, and few people stand up and take the initiative to carry the banner of transformation. As a result, the transformation became a long-term tug-of-war after meetings and meetings.
The fourth is “can’t transfer”. After overcoming all the previous obstacles, many companies discovered that the transformation is definitely not as simple as talking about it. Most traditional enterprises do not fully understand digital technology, lack a clear digital strategy and transformation implementation roadmap, lack sufficient experience in data platforms or digital business operations, and hesitate to change business processes and cultivate business models. In the face of these difficulties, many companies have found that enthusiasm, determination and fighting spirit are not enough, and scientific methods and safe paths are also required. We must not only have a firm will, but also respect objective laws, and only by guiding us with scientific methods can we truly promote transformation.
In the past few years, countless traditional enterprises in China have gradually promoted digital transformation amidst such confusion and hesitation. It should be said that certain results have been achieved in this process. For example, many companies have implemented e-commerce sales, O2O integration, cloud-based systems, and deployed big data systems. However, behind the seemingly lively noise, there are many problems in the digital practice of many enterprises: incomplete cognition, unclear strategy, ineffective implementation, and ineffective effects. Many pioneers stopped changing after repeated explorations. pace. At this time, the problems faced by enterprises have changed from before:
The first is “incomplete”. For traditional enterprises, digital transformation is a difficult organizational evolutionary revolution. It is necessary to find a good breaking point and entry point. However, many enterprises are only satisfied with point-like achievements and are unwilling to push the transformation to deep. Although the media keeps reporting various successful cases, after careful study, it is found that most of these successful cases are the successful application of a single digital technology, and they are still in the dot state. Traditional enterprises that can truly achieve digital transformation are very rare.
The second is “soon”. Transformation is a continuous process, and there will inevitably be many setbacks and repetitions in the middle. Some enterprises have unclear thinking and unsteady will in digital transformation, and have not planned from the height of enterprise development strategy. They think that as long as they buy hardware and implement systems, they will achieve immediate results. Transformation failed. In order to reach the other side of victory, both a strategic height and long-lasting persistence are required. It is not enough to rely on a momentary impulse. Only strategic determination and scientific mechanism support are required, so that transformation actions can last long.
In short, at present, most enterprises believe that digital transformation is imperative and have begun to implement it initially. However, after several years of exploration, the easy things have been done. The next thing to do is business innovation, organizational change, Structural adjustments and other major events are difficult and slow to take effect, and it is difficult to really promote them only by the IT department. In view of this, the author believes that digital transformation has entered the deep water area after several years of disorderly exploration.
To further advance digital transformation in depth, we must first have a more comprehensive and scientific understanding and methods of digital transformation. From a cognitive point of view, the digital transformation of enterprises is not a simple innovative application of new technologies, but an all-round transformation of development concepts, organizational methods, business models, and operating methods. It is not only a strategic transformation, but also a system engineering. It is necessary to overcome the strategic blindness, but also need the determination of execution and the guidance of scientific methods to overcome all kinds of setbacks on the road of transformation.
How traditional enterprises break the situation
Ren Zhengfei said that without theoretical breakthroughs, small reforms are nothing. The digital transformation of many enterprises seems to be in full swing, but in fact it is blind trial and error and has no rules. Therefore, it is necessary to construct a more scientific methodology to provide more valuable guidance for transformation. Based on this understanding, this book constructs a SMART + framework, which I call the digital transformation 2.0 methodology of traditional enterprises. Specifically shown in Figure 1.
Figure 1 SMART + Framework of Digital Transformation 2.0
SMART+ is an acronym for several English words, among them:
S stands for Strategy, digital transformation strategy, which solves the “unclear” problem through strategy, and provides a clear goal and feasible path for transformation.
M stands for Model, that is, the transformation of business model and operation model, which is the core content of digital transformation, and is used to clarify the core and focus of digital transformation.
A stands for Architecture, that is, the reconstruction of IT architecture, which is the reconstruction of enterprise application architecture, data architecture, and technical architecture, so that IT technology can adapt to the needs of the digital age; M and A are used to solve the “transformation” Incomplete” problem.
R stands for Resource, that is, resource guarantee, which provides organization, personnel, capital, culture, leadership and other guarantee measures for transformation.
T stands for Transformation, means transformation measures and steps, which are management measures to ensure the success of the change, to ensure that the change can be carried out step by step and in an orderly manner, and to reduce the risk of change. R and T are used to solve the difficult problems of “unwilling to transfer” and “dare not to transfer”.
+ is a continuous innovation mechanism for digitalization. Through the mechanism, innovation is continuously pushed forward to solve the problem of “soon to be done” in transformation.
Although the above-mentioned SMART + framework cannot be said to be a major theoretical innovation, it is a systematic transformation framework. Just like the barrel theory, the above six elements are indispensable, and any shortcoming in any one will greatly affect the digital transformation effect of the enterprise. Once the development of a certain element lags behind, it will affect the overall process and results of the transformation.
In the next five years, digital transformation will enter the 20 stage. The easy-to-do and easy-to-be effective things have basically been completed, and the rest are difficult to overcome fortresses, including business model innovation, organizational transformation, and intensive operations. integration, cross-department and cross-organizational system implementation, and the transfer of IT architecture from vertical to horizontal. These are very difficult tasks. SMART+ is the guiding framework to solve this series of problems, and strives to provide comprehensive, scientific and feasible guidance for digital transformation.
“Digital Transformation 2.0 – The Evolutionary Road of Traditional Enterprises in the Digital Economy Era” organizes the content of the book with the SMART + framework as the general outline. Chapters 1 and 2 introduce the connotation of digitalization and lead to the overall framework of the book; Chapter 3 focuses on digital innovation strategies How to formulate it; Chapters 4 and 5 discuss how to realize digital innovation and transformation from two levels of business model and operation model; Chapter 6 introduces how to upgrade the IT architecture in the digital age; Chapter 7 introduces the steps of transformation and change management in transformation ;Chapter 8 introduces the guarantee measures for transformation to escort the transformation; Chapter 9 discusses how to build a digital innovation mechanism to provide continuous impetus for transformation.
Thousands of sails pass by the side of the sunken boat, Wan Muchun in front of the sick tree. It is very appropriate to use this poem to describe the current enterprises. A number of enterprises have fallen, and a number of enterprises have been reborn. Digital transformation is a comprehensive transformation, a process of turning from a cocoon into a butterfly and rebirth from nirvana. Although the process is painful and even sacrifices, the goal is to be reborn, which is continuous optimization and sublimation.
Xiongguan Road is really like iron, and now it’s over from the beginning! Let us encourage each other on the road of digital transformation!
– End-
This article is excerpted from “Digital Transformation 2.0 – The Evolutionary Road of Traditional Enterprises in the Digital Economy Era”
Author: Liu Chengli
Machinist IT
Digital Economy Innovation Drive and Technology Empowerment Series
(Click on the cover to enter the details page)
Author: Liu Chengji edited
Keywords:Digital economy, digital transformation, innovation-driven technology empowerment
Suitable crowd: CEO, CIO, CDO, CTO
This book first reviews the development process of my country’s digital transformation, and believes that digital transformation will enter the deep water area during the “14th Five-Year Plan” period. Digital technology will promote the comprehensive upgrade of business strategy, business model, operation model, and IT architecture. It is necessary to build a more scientific The methodology provides more valuable guidance for digital transformation. Based on this understanding, this book constructs a transformational SMART + framework, which the author calls the Digital Transformation 2.0 Methodology of Traditional Enterprises, and based on this, it provides comprehensive, scientific and feasible guidance for the next step of digital transformation for enterprises.
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