How to realize the digital transformation of enterprises

The inherent difficulties of enterprise digital transformation still exist; The four changing factors are epidemic impact, 5G deployment, accelerated application of artificial intelligence (AI), and accelerated decoupling of Chinese and American technologies. Four factors lead to the digital transformation of enterprises or active or passive acceleration, and strengthen the demand for local customized solutions. This requires enterprises to deeply understand the key characteristics of digital enterprises in the future, make full use of the opportunities brought by the 2020 transformation, systematically solve the inherent difficulties in promoting digital transformation, and formulate transformation promotion plans that are in line with their own characteristics based on the judgment of the transformation stage of enterprises.

The development of digital technology has stepped into the era of artificial intelligence from the Internet and big data. In the impact and subversion of digitalization on social economy, Internet enterprises occupy a dominant position, and the overall performance of traditional enterprises is still not ideal. This paper suggests that traditional enterprises should start with the evaluation of their digital maturity, clarify their own development stages, clarify seven key characteristics of digital enterprises, and pay attention to overcoming five common difficulties on the road of digital transformation of enterprises, so as to achieve twice the result with half the effort in the new round of digital transformation.

0 1

Correctly evaluate the maturity of digitalization

In the process of digital transformation, business applications, IT architecture and organizational mechanism are closely linked. Enterprises should distinguish between causes and effects, and establish a multi-dimensional evaluation system of enterprise digital maturity, which can be used to judge the digital stage of enterprises, find out the possible reasons for unfavorable promotion and the corresponding measures to be taken. PwC's digital maturity evaluation framework evaluates the digital maturity of enterprises from six dimensions: digital strategic guidance, business application results, technical support, data support, organizational support and digital transformation (see figure 1). Among them, the leading indicator is the first point "digital strategy", the result indicator of business application is the second point "digital business application", and the other four dimensions (3~6) are supporting elements, and each dimension can be subdivided into several sub-dimensions.

Figure 1: Evaluation Framework of Enterprise Digital Maturity

According to the different digital maturity of enterprises, the stages of digital transformation of enterprises can be divided into four stages: online, integration, digitalization and intelligence. At present, most traditional enterprises in China are in the online and integrated stage, and a few enterprises have entered the digital stage. Local application of intelligence has appeared, but large-scale systematic application in traditional enterprises is rare. In the online and integration phases, the two tasks of the current digital transformation are:

To establish a blueprint for digital transformation, you can refer to the following seven characteristics of digital enterprises;

Accelerate the online and integrated operation of enterprises, and lay a solid foundation for truly realizing the digital analysis and insight of enterprises.

02

Seven characteristics of digital enterprises

Compared with traditional enterprises, digital enterprises show seven major differences in business, organization and IT (see Figure 2), the core of which is to build a "customer-centric" capability system.

Figure 2: The main differences between digital enterprises and traditional enterprises.

First, the customer-centered organizational capacity system

Customer-centered is the goal of enterprise digital transformation, that is, to build a multi-level organizational capacity system with customer-centered, including designing organizational structure around customers, innovative ability based on customer scenarios, designing interactive ways to meet customer experience, and embodying the concept of "customer-centered" in data, IT and assessment mechanisms.

1) organizational structure: from product-centric to customer-centric.

Under the traditional mode, enterprises take "I" as the center, and the marketing services of different products are usually self-contained. In the digital economy, customers are the center, contact with the same target customers, use the same channels, analyze data and recommend the best products through a unified platform, and use a unified service system. The organizational structure designed based on this concept (see Figure 3) is conducive to customer data access and insight, unifying customer experience and improving enterprise resource utilization efficiency. If enterprises are worried that the adjustment of organizational structure involves many stakeholders, they can first realize customer-centered capacity building through key process control points and data access, and then make organizational adjustment when the time is ripe.

Figure 3: The transition from product-centric to customer-centric.

2) Business innovation: from process-driven to scenario-driven.

Starting from the customer's needs in a specific scenario, tap the customer's needs, design the overall solution, and bring customers a complete feeling. This method solves the problem of lack of connection between traditional business strategy and business process, and pays attention to the efficiency of a single process, ignoring the overall needs of customers. Focus on customer needs and realize innovation through multi-process and multi-functional cooperation (see Figure 4).

Figure 4: Scenario-driven multi-user service structure

3) Customer interaction: from focusing on function to focusing on experience.

Customer experience mainly refers to the convenience and comfort brought to customers in their full interactive journey, including online and offline. Online through UI/UX design, offline through the whole process interactive design of specific scenes/storefronts to create a seamless and comprehensive customer experience. In practice, we should pay attention to creating high-quality customer experience from the perspective of integration and customer insight, and avoid focusing on single-point customer experience design.

Second, the ability to diversify.

Facing the increasingly complicated internal and external management environment, enterprises need to have four abilities: agility, lean, wisdom and flexibility. These four capabilities are supported by advanced IT architecture and corresponding organizational capability system (see Figure 5). The capability characteristics of each area are as follows:

Customer interaction: customer-centric, omni-channel, full value chain, emphasizing agility and user experience.

Resource management: centering on process, focusing on traditional ERP system, emphasizing stability, lean and high efficiency.

Wisdom insight: data-centered, global and all-round, emphasizing wisdom insight.

Intelligent production: machine-centered, focusing on the Internet of Things and enterprise manufacturing systems, emphasizing cost, efficiency, quality and flexibility.

Figure 5: Four core competitiveness of digital enterprises

Third, the intelligent brain.

Based on data value and guided by artificial intelligence analysis, the enterprise global data platform and intelligent analysis system are constructed to provide analytical insight for all aspects of enterprise operation management, and change from analyzing operation results to predicting future development (see Figure 6). The factors that hinder the construction of enterprise integrated data analysis platform include data isolation and departmental wall brought by technology, and the latter is the main obstacle at present. The intelligent brain is obviously different from the traditional way in data source, data analysis ability and data service enterprise.

Figure 6: Schematic diagram of the conceptual framework of "intelligent brain"

Fourth, agility.

In the digital age, enterprises need to have agile response ability, grasp the rapid changes of customers and markets externally, and meet the requirements of enterprise management internally. The construction of agile capability needs business model, IT architecture and product development methods to achieve agility at the same time. The business model adopts the model of "frontline soldier"+"rear resource platform", and the product development model adopts design thinking and agile iteration (see Figure 7).

The product requirements of traditional users need to be systematically analyzed and demonstrated before they can be deployed online. In the design thinking and agile iterative mode, through user role simulation, focus group analysis and minimum prototype product design, products can be launched in the shortest time and iteratively optimized.

Figure 7: Agile Iterative Method

Verb (abbreviation for verb) Ai Fu.

The enterprise application of AI can be divided into two stages: when there are few application scenarios, AI applications are embedded into an information system as tools, and common ones are interactive AI, such as voice recognition and robot customer service; When an enterprise has multiple AI application scenarios, it integrates with the AI development environment, common AI data models and databases to form an enterprise AI intermediate platform, which gathers various AI capabilities to provide AI capabilities for different services and forms an intermediate platform with AI service capabilities (see Figure 8).

Figure 8: IT architecture supported by artificial intelligence

Sixth, cloud +5G extends the operating space.

The end-to-end cloud architecture based on cloud +5G expands the enterprise's operation and management space from the space dependent on wired network environment to a broader physical area (see Figure 9). In the "cloud", the platform can be empowered, and the edge computing function of the 5G network can realize the "edge", enhance the real-time control of the terminal, and reduce the amount of data processed in the cloud; "End" means that the 5G terminal realizes direct interaction and control with the physical environment/machine. Such a framework will be widely used in industrial fields, smart cities, medical care, finance and fast-moving consumer goods industries.

Figure 9: Cloud +5G Architecture for Enterprise Applications

VII. IT organizational ability from support to drive.

Traditional IT departments focus on project delivery. As one of the main promoters of enterprise digital transformation, digital IT organizations have undergone great changes in seven aspects, such as delivery mode, personnel skills, IT governance and cost accounting (see figure 10).

Figure10: Changes in IT organizational capacity and operation mode

For large group enterprises, IT power is distributed in all levels of units. In the process of digital transformation, we need to focus on how to integrate it resources and make digital transformation with service enterprises, so as to lay the foundation for foreign service.

03

Difficulties and solutions of digital transformation

Understanding the characteristics of digital enterprises does not mean that enterprises can transform successfully. Since the Internet 1.0 period, traditional enterprises in China have been undergoing digital transformation for more than ten years, and the overall effect is not ideal, because of the lack of technology and mechanism, they are facing various inherent difficulties. Common difficulties include five types:

Different understanding of the concept of digital transformation;

It is difficult to set the goal of digital transformation and evaluate the actual commercial value brought by digitalization;

There are too many options, and every business and functional department has many ideas, but it lacks a clear path;

Lack of digital talents;

The working mechanism of traditional enterprises is not suitable for promoting digital cross-departmental and innovative changes.

To solve these difficulties, PricewaterhouseCoopers suggests unifying thoughts, making overall plans and establishing a promotion mechanism that matches the digital maturity of enterprises.

First, unify thoughts.

The definition of enterprise digital transformation: the continuous process of solving problems, creating value and improving enterprise performance by comprehensively using various digital technologies and combining with business model transformation.

In this definition, digitalization includes informationization and business model transformation. Enterprises can have different definitions of digital transformation, and it is very important to understand the relationship between digitalization, informatization and business model transformation. No matter how defined, the underlying business logic, system architecture, business and system connection should be done or how to do it.

Second, set goals.

The way of science+art is the means for enterprises to make digital blueprints. Together with the experts who know the digital technology ability and the professionals who know the business pain points of enterprises, we can quickly outline the main scenarios and possible realization States of enterprise application digitalization through the analysis method of design thinking, that is, the digital blueprint, and then gradually deepen along the blueprint (see figure 1 1).

Figure 1 1: "science+art" outlines the digital blueprint.

Third, choose the path.

It is suggested that enterprises should adopt top-down top-level planning and bottom-up partial attempt in parallel. When different local attempts conflict, follow the principle of giving priority to direct customer-related solutions, customer experience and forward-looking IT architecture. In terms of entry point, priority should be given to the promotion of online business and management of enterprises in order to make full use of the habits formed during the epidemic.

Fourth, establish a promotion mechanism.

According to the different application degrees of enterprises to digital transformation, four ways can be adopted to promote digitalization: exploratory, coordinated, centralized and embedded (see figure 12). The key is whether a centralized digital control organization is needed.

Figure 12: Four ways to promote the digital transformation of enterprises

At the beginning of digital transformation, enterprises have not yet established an overall promotion plan, but the conditions for local pilot projects are still available. At this time, it is exploratory to encourage all buses to try in the local area; After that, with the deepening of the application of digitalization in enterprises, the demand for cross-departmental collaboration intensified, and the transition to collaborative centralized management was made. The ultimate realization is embedded management, and the digital transformation of the whole enterprise under the top-level planning.

Verb (abbreviation of verb) information technology capacity building

Internal and external IT forces integrate/borrow resource levels. In the mode of operation, it has changed from project system to product system; In terms of personnel, the initial focus is to strengthen the team building of product manager, data analysis and business architecture in the IT team.

Different types of enterprises face different difficulties in the process of transformation. For large enterprises with complex business, it is more important to establish a suitable transformation promotion mechanism in the early stage of transformation than to solve technical difficulties.