Reprint/Technical Leadership
A report released by McKinsey shows that the success rate of digital transformation of Chinese enterprises is only 20%. In other words, if your company wants to undergo digital transformation to , then sorry, you have about 80% chance of failure. Why does
have such a high failure rate? As an IT consultant, former vice president of technology at an Internet company, and a technical executive of a traditional listed company, Brother K talks about my observations and thoughts on the digital transformation of traditional enterprises.
First of all, the digital transformation of traditional enterprises is very easy to fall into five major traps.
1. The five major traps of enterprise digital transformation
1. Treat digital transformation as a project, not a strategy
What is strategy? What the strategy needs to solve is the problem of what the company does and what it does not do.
What is a project? A project is a collection of work tasks that invest certain resources within a certain period of time and achieve certain goals. What is the difference between
? If drawing is used as metaphor, the strategy is more freehand and the project is more realistic. The strategy is a process of gradually clearing, while the project has clear goals and boundaries. A strategy usually requires many projects to be decomposed and implemented.
For every company, there is no experience to summarize. It is all about looking at how the industry is doing and crossing the river by touching other people's stones. Therefore, the digital transformation of enterprises is at the strategic level, not at the specific project level . Those who try to "try a few projects first" and diversify digital risks are manifestations of lack of strategic determination, which will inevitably lead to the failure of digital transformation.
2. Lack of basic understanding of digitalization and underlying logic
Enterprise digital transformation does not simply buy a software system, and enterprises can develop digital capabilities. Digital transformation is essentially through digital technology to innovate and recreate the business model of the enterprise, upgrade the business and management concepts of the enterprise, and improve the quality and efficiency of employees' daily work.
Enterprises have a methodology. Combined with advanced enterprise IT governance concepts, digital transformation can achieve twice the result with half the effort and improve the success rate of digital transformation.
3. No organizational change is carried out, and there is a lack of digital talents
Enterprise digital transformation will definitely involve organizational changes and affect the interests of some people. This is also the reason why digital transformation will be subject to internal resistance from the enterprise.
Most of the CIOs/CTOs of many companies are airborne soldiers, senior migrant workers, have no intention or ability to drive organizational change. They usually have to choose to avoid this "hot potato", which has led to enterprises gradually moving away on the road of "pseudo-digitalization".
4. It does not drive business innovation and bring value increments
The digital transformation of enterprises ultimately brings value increments to enterprises. Whether it is disruptive innovation or gradual innovation, whether it is current or future, whether it is capital appreciation or order growth, it will eventually bring tangible benefits to the company. Otherwise, no matter how beautiful the digital strategy is, it will be just a castle in the air and cannot be implemented, and it will have no meaning to the company.
5. Blindly worship consulting companies
Many traditional companies blindly worship consulting companies, believing that as long as they introduce consulting services, they can cure the disease, so they ignore the cultivation of their own digital talents. The accumulation of excellent practices and experience in the past can easily lead to the inability of the consulting companies to adapt to the methodology of the consulting companies, and the consulting effect is greatly reduced, and the digital transformation ends in failure.
2. Why do enterprises need to undergo digital transformation?
is essentially for to combat the entropy increase of . Entropy is a unit in thermodynamics to measure the degree of chaos in the system. Entropy increase is a spontaneous process from order to disorder. From a tissue to a small body, they all follow the entropy increase law .
The concept of entropy increase is entropy reduction, entropy reduction is the way for an enterprise or organization to flourish . Schrödinger once said: " life is based on negative entropy for living ."
If enterprises want to achieve entropy reduction, they also need to establish a " dissipative structure " organization. What is a "dissipative structure"? It is a non-isolated, unequal, non-linear ordered state by exchanging matter and energy with the outside world.
For example, a city is a "dissipative structure". It constantly relies on the outside world to supply materials (various consumer materials and building materials) and continuously discharges waste products to the outside world. That is, through communicating with materials with external world, energy and negative entropy are obtained from the outside world (giving entropy to the outside world), so that it can be maintained and developed. Once communication with external world is cut off, it tends to stagnate and die, and finally becomes disorderly ruins.
"dissipative structure" theory was proposed by Prigozin, the winner of the Nobel Prize in Chemistry, and was later introduced into the field of enterprise management. Ren Zhengfei highly praised the idea of "dissipative structure" and implemented this concept within Huawei .
After understanding the "entropy increase" and "dissipation structure", it is not difficult to find that the digital transformation of enterprises is to use digital technology to build a "dissipation structure" organization for enterprises, introduce digital governance ideas, upgrade digital talents, drive business model innovation, and digital empower enterprise operations and management, and ultimately enable enterprises to achieve the process of entropy reduction.
3. What to transform digitally?
K Brother has thought deeply about the digital transformation process of enterprises and abstracted the underlying logic of digital transformation: Enterprise digital transformation is a process of encoding and decoding the physical world .
1. Transformation formula
The entire digital transformation process actually does two things: encoding and decoding .
In the physical world, through digital technology, the traditional enterprise management model is sorted out and modeled, and a fully-perception, full-link, full-scene, and fully intelligent digital system is established in the digital world. It is a mapping of the physical world, and this process is encoding. The reason why
wants to build a digital world is that in the digital world, the mining, analysis, modeling and testing of enterprise business data is more than 100 times more efficient than the traditional offline methods of "counting people" and "watching flows", allowing managers to discover problems in business operations more accurately and in a timely manner and make better decisions.
has insight into the enterprise and then returns to the physical world to guide front-line staff to better create products and provide better services to customers. This is the decoding process. Then we get new feedback and return to the digital world to improve and optimize the digital system. This will continuously cycle and iterate, helping enterprises continuously adjust their strategies, improve their management and management levels, and build corporate core capabilities .
2. Transformation methodology: Transformation triangle
Enterprise digital transformation has a set of methodology. The following is an overview of the digital methodology of well-known manufacturers:
IBM believes that digitalization is to integrate digital and physical elements, carry out overall strategic planning, and realize business model transformation. During the transformation process, pay attention to customer value proposition ; pay attention to the transformation of operation model; transform customer value proposition and organizational delivery operation mode.
Microsoft believes that the digital transformation path and four core capabilities can be summarized as: customer interaction, empowering employees, optimizing business processes, and product and service transformation.
Alibaba advocates that digitalization "is a process from business to data and then bringing data back to business." The key to the digital transformation of enterprises is: all business dataization, all data businessization.
Huawei 's digital transformation "1234 method" proposes: 1 strategy: overall organization strategy, overall planning.2 guarantees: stimulate organizational vitality and create a transformation culture. 3 principles: Integrate the core principles into the entire process of transformation. 4 actions: Control the key process of transformation.
2) Enterprise digital transformation methodology: Transformation triangle
Although major companies have different understandings of digital transformation methodology, they all cannot be separated from three major aspects. I summarize it into " Transformation triangle ":
First, digital strategy and business . That is, the overall digital strategy of the enterprise, digitalization drives business innovation, the integration of business and technology, the top-level architecture design of the enterprise, and the construction of the digital ecological environment.
Second, digital organization and talent . It includes upgrading the original organization of the company, cultivating digital talents, setting up employees' digital thinking, and refreshing corporate culture.
3, digital technology . That is, build a digital base, including the application of mobile, cloud native, low-code, RPA, BI and other technologies, and agilely deliver various application systems.
4. How to transform digital transformation?
What specific things do enterprises need to do in digital transformation and how to implement them? The following is a summary of 5 aspects:
1. Introducing excellent digital leader
A good digital transformation strategy must be fully responsible by a digital leader with rich experience, forward-looking vision, and good at promoting change. This leader almost determines the success or failure of digital transformation. Such digital talents are hard to come by. In addition to their strong professional qualities, they must also match the culture of the company.
The second most important solution for many companies is to consult the company to formulate a digital plan, and the top leader of the company will take charge, and then the technical director who grew up inside will lead the implementation of . The advantage of this plan is that it has both input from advanced external experience and management by IT managers who are more familiar with the business and system. The boss's leadership has increased the attention and cooperation of the entire company, and the success rate of the implementation of the digital strategy has been greatly improved.
2. Cultivate digital thinking of employees
Digital thinking is a complex thinking, which contains thinking of multiple different disciplines. It can be specifically disassembled into 6 kinds of thinking:
Data thinking . The corporate decision-making process shifts from the original slap in mind and experience to scientific decision-making methods of data decision-making and business insight guidance to improve the quality of overall decision-making.
System thinking . Digitalization provides a rich data view, thinking about the enterprise from a global perspective from user feedback, business analysis, financial analysis, corporate costs, and industry competitor data.
Agile thinking . Learn from the agile iteration thinking of Internet companies, react quickly and continuously improve themselves in an uncertain era.
User thinking . Traditional enterprises have changed from market-oriented and marketing-oriented to user-oriented and product-oriented thinking, allowing customer value to drive the development of enterprises.
Product thinking . It is product-centered, customer needs-oriented, and large-scale customization is the main production concept.
Ecological Thinking . Build a good corporate ecological environment and realize the symbiosis of upstream and downstream industrial chains of .
3. Organizational change and cultural refresh
Digital drives business model innovation, which will inevitably change the organization to cooperate with the implementation of the digital strategy. In the face of the overall interests of the enterprise, even if a temporary sacrifice is required, you must cooperate with personal interests. Never overly care about personal gains and losses, or lose the big because of small losses, and at the same time, you must also do a good job in comforting employees. Through a comprehensive refresh of corporate culture, digital concepts are injected into the DNA of the company, allowing the company to achieve self-evolution.
4. Enterprise architecture design takes the digital transformation of
. We must start from the top-level architecture design of the enterprise and sort out the strategies, key business processes, core system modules, etc. of each business segment.
On the basis of clarifying the business architecture, it sorts out the application architecture and defines the business domain division between each system. There are many solutions, such as: DDD, etc. Then, the data structure is sorted out and the data assets are unified definition and managed. Finally, there is enterprise IT infrastructure planning, including cloud architecture, network architecture, storage architecture, security planning, etc.
5. You must have strategic determination. When an enterprise digital strategy is implemented, it will encounter various unexpected problems and strategic wavering will occur. This is the most fatal blow to digital transformation. Therefore, any strategic implementation must have strong strategic determination.
What is strategic determination? For example, at the beginning, Liu Qiangdong, , "resisted the public opinion and held heavy logistics", and took the construction of the supply chain of heavy assets as a strategy, creating the core competitiveness of JD . Jack Ma invests cloud computing every year by 1 billion yuan. Using cloud computing as the strategy of Alibaba , it has established the leading position of Alibaba Cloud in Asia-Pacific. This strong strategic determination is indispensable in the process of enterprise transformation.
Conclusion
In an uncertain era, Enterprise digital transformation is an infinity war that all enterprises cannot escape . Drucker said: "The biggest danger in the turbulent era is not the turbulence itself, but still doing things with the logic of the past."
Holding the old map, you must not find the New World . For every company, how to break through in a turbulent era and become the sword of Damocles hanging over the heads of corporate managers. Digital transformation is like the ticket to the giant ship to the new era, which is difficult and correct.
The giant wheel heading to the new era has sounded its whistle, and there is not much time left for corporate managers. I hope every brave changer can lead the company to evolve into a new species that is more adaptable to the times, and win the battle in this digital transformation and always be prosperous.
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