To put it simply, the digital transformation of traditional enterprises usually needs to go through 4 stages and 5 implementation steps.
See below for details:
Digital transformation is based on IT technology providing the support needed by business and allowing business and technology to truly interact.
We can understand enterprise digital transformation from multiple dimensions such asdevelopment stage, conceptual connotation, classification and value.
When traditional enterprises are undergoing digital transformation, the first thing they need to do is to accurately define digitalization, and then let the decision-makers unify their thinking. And for the purpose of value innovation, it uses digital technology to drive business development strategy.
1. Generally speaking, the digital transformation of traditional enterprises can be divided into four stages:
The first stage: empowerment
That is, digital technology is used to empower production equipment, products or employees, reduce labor intensity, improve efficiency, and enhance product functions and performance. The characteristics of empowerment are small scale, low risk and quick results.
The second stage: optimization
Made using modeling techniques for one or more business processes, optimization often has a modern character.
The third stage: transformation
This is the original form of digital transformation. Traditional businesses that were originally immovable can be easily transformed through the empowerment and lubrication of digital technology.
The fourth stage: Reengineering
Reengineering is a key step for traditional enterprises to transform into digital enterprises. There are generally two types of reengineering. One is the reengineering of production relations within the enterprise that is compatible with digital productivity. The second is to break the boundaries of enterprises and realize the reconstruction of enterprise business models through cross-border methods such as mergers and acquisitions, integration, and innovation.
Digital transformation is an exploration, and there are no mature and reliable cases for either the digital technology used or the business model being transformed. If traditional enterprises want to avoid the risks of transformation and maximize the value of transformation, they must follow a pilot-first, win-step-by-step, and step-by-step transformation implementation strategy.
2. The digital transformation strategy of traditional enterprises can be divided into five steps:
1. Planning first:
Make long-term digital transformation development plans based on the current status of the enterprise.
2. Select pilot:
The selection conditions are relatively mature, various key factors such as talent base are relatively complete, and areas with quick results are used as pilot projects to achieve quick results, gain experience and build confidence.
3. Pilot effect evaluation:
Evaluate the effectiveness of pilot work at any time, and do not overestimate the short-term benefits, let alone underestimate the long-term value.
4. Support and amplify:
Expand the scope to select similar results.
5. Operation optimization:
Continuously adjust the pace of rapid development of new technologies during operation.
3. Concept and connotation of digital transformation
The core of digital transformation is to use new generation digital technologies such as 5G, artificial intelligence, big data, and cloud computing to change the way companies create value for customers, thereby promoting new growth in corporate business.
Digital transformation redefines business processes, scenarios, relationships, employees and other elements. The internal process is fully online and the external system adapts to various changes. From the front end to the back end, automation and intelligence are realized, ultimately creating value.
Today, digital technologies are being integrated into corporate business models, production operations, products, and services to transform corporate customers' business results and the delivery of commercial and public services. This often requires customer involvement, but also involves changes to core business processes, employees, and the way you communicate with relevant parties.
Digital transformation is a high-level transformation based on digital transformation and digital upgrade that further touches the core business of an enterprise and aims to develop and establish new business models.
First of all, digital transformation reflects “information digitization”
It is the conversion process from analog form to digital form, such as from analog TV to digital TV, from film camera to digital camera, from physical typewriter to office software. The essence of its transformation is to read, write, store and transmit information in the binary digital form of 0 and 1.
Secondly, digital upgrade emphasizes “process digitalization”
Use digital technology to transform business processes and create opportunities to generate new revenue and value. Such as enterprise resource planning ERP system, customer relationship management CRM system, supply chain management SCM system, etc., all digitize work processes, thereby improving work collaboration efficiency and resource utilization efficiency, and creating information value for enterprises.
Finally, digital transformation is about developing digital technology and supporting capabilities to a greater extent
The goal is to create a dynamic digital business model. Digital transformation completely transcends the digitization of information or process. The goal is to achieve "business digitization" so that enterprises can develop new businesses and new core competitiveness in a new digital space.
4. Classification of digital transformation
According to the extent to which digital transformation changes an enterprise's existing business, digital transformation can be divided into"existing business optimization" and "incremental business innovation"Two categories, corresponding to different business strategies and digital strategies.
1. Optimization of existing business
Existing business optimization refers to the digital transformation of production and operations based on the existing business model and the use of efficient data technology and algorithms to obtain lower costs and better experience. balance, reduce operating costs or provide incremental business.
- For example, a home appliance company uses artificial intelligence image recognition technology to improve product production quality control;
- A multinational group company uses financial robot RPA to improve financial management efficiency and reduce human investment;
- A major consumer company integrates online and offline channels to create a consistent consumer experience and build private domain traffic;
- A real estate company built an enterprise mobile platform and built smart office tools for employees to improve the efficiency and experience of employee work and collaboration.
2. Incremental business innovation
Incremental business innovation refers to the reconstruction of business models based on data or the development of new businesses based on data, including the digital transformation of products, services and business models.
- For example, a music production company replaced traditional records and CDs with digital music downloads. Later, online music playback replaced music downloads;
- A traditional supermarket realizes online and offline integration and transforms from traditional retail to new retail; a traditional operator provides site selection services to the outside world;
- An agricultural products company built a blockchain traceability technology platform to socialize the traceability and platform of products and services, generating new service capabilities and income;
- A traditional pharmaceutical company has built a membership system to aggregate health resources, build a health ecosystem, and develop a new health business model.
5. The value of digital transformation
The value of digital transformation can be divided into three categories: production operation optimization, product and service innovation, and new business innovation according to the direction and value space of business innovation transformation. The rising value in the digital transformation process can be clarified according to these three categories.
1. Production and operation optimization value
The corresponding business system generally will not undergo essential changes. Mainly based on traditional stock business, value creation and transfer activities are mainly concentrated in the internal value chain of the enterprise, and value acquisition mainly comes from the large-scale production and trading of traditional products. The value benefits of production operation optimization mainly include efficiency improvement, cost reduction, quality improvement, experience optimization, etc.
- In terms of efficiency improvement, it mainly includes improving scale efficiency and diversification efficiency;
- In terms of cost reduction, it includes reducing R&D costs, production costs, management costs and transaction costs;
- In terms of quality improvement, it mainly includes improving design quality, production service quality, procurement and supplier collaboration quality, and all-factor and whole-process quality;
- In terms of experience optimization, it mainly includes optimization of customer and consumer purchase experience, optimization of collaborative experience of internal employees and partners, etc.
2. Product and service innovation value
The corresponding business system has not changed much overall. It mainly focuses on expanding incremental business innovation based on traditional businesses. Value creation and delivery activities extend the value chain along the product and service chain, open up space for incremental business development, and generate new products and services. income. Product and service innovation value mainly includes new technologies and new products, service extension and value-added, main business growth, etc.
3. New business innovation value
The corresponding business system usually undergoes disruptive innovation, mainly focusing on developing and expanding digital business to form a new business system that conforms to the laws of the digital economy. Value creation and delivery activities are transformed from linearly related value chains and internal enterprise value networks into open value ecosystems. , value acquisition mainly comes from the business ecosystem built with ecological partners. The value of new business innovation mainly includes aspects such as connecting and empowering users’ ecological partners, new digital businesses, and green and sustainable development.
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