Enterprises are moving towards a new digital road

The new digital road itself is not the ultimate destination of the enterprise, nor does it change the essence of the enterprise. It is an inevitable stage in guiding the enterprise to achieve the economic law. It is digitized with the previous enterprise digitized. The difference between “improving efficiency and reducing costs” is that the new digital (digital) has shifted to the external “realization of user demand”, and the value brought about is: expanding business and increasing corporate income. The term “digitization” in enterprise digitization corresponds to two different English words: “digitized” and “digital”. The former is mainly about the “digital process”.

Of course, there are “processes” that have the result of the process, that is, “system architecture”; the latter mainly refers to the “digital state”, the same reason, there is “state” “There is also the “core value” embodied in the state. “Digitalized” and “digital” also represent the new and old way of digitalization. The goal of enterprise digital new and old road Digitized is the information construction work carried out by enterprises for many years. The general conceptual architecture of enterprise information systems is shown in Figure 1. It is to build and optimize the business processes of ERP (Enterprise Resource Planning System) and build SCM ( The supply chain management system enables companies to share information with the upstream and downstream to reduce inventory, and to implement the MES (Manufacturing Execution System) by using CRM (Customer Relationship Management System) to invest limited resources of the enterprise to the most valuable customers.

Keep abreast of all kinds of basic information in the production and operation process to achieve rapid decision-making. The company connects all relevant parties in the business process through the “eBusiness” system, and so on. Although the names of the above systems are different for different industries and different enterprises, these systems are built on top of the IT infrastructure, including: computer software and hardware, networks, databases, and so on. Due to the rapid development of IT technology, the management ideas, management methods and management tools embodied in various systems and systems built on these IT infrastructures are constantly changing.

Therefore, in the process of digitization, enterprises need to Business processes, organizational structures, etc. can be adjusted or even re-engineered to achieve the application results of these digital systems. It can be seen from the goals achieved by the above systems that the effectiveness of applying these digital systems is mainly to “improve operational efficiency and reduce operating costs.” Since the era of mobile internet, with the popularity of technologies such as the Internet of Things, big data and cloud computing and their applications, the value expectations of customers, the value pursuit of employees and the value creation process of enterprises have undergone tremendous changes compared with the traditional. Customers, especially the final users, expect to be able to get personalized products and services. Employees are no longer a single dependency on the enterprise, but more to pursue the realization of personal value.

The resources needed for business operations are no longer necessary. It is the resources owned by the enterprise itself, but the external resources of the enterprise that can be utilized more, and also the resources that it owns can be shared with the outside. Therefore, the traditional production methods of products and services, as well as the corresponding corporate forms and business ecosystems, have also changed. Enterprise digitalization has different essential meanings. A fundamental change is from “digitized” to “improving operations”. “Efficiency, lower operating costs” as the goal, progress to “new digital (digital)” to “expand business, growth income” as the goal.

A typical company that has changed from digitized to new digital is the Haier Group. Haier, born in 1984, experienced the challenge of transforming products from the seller’s market to the buyer’s market. Mr. Zhang Ruimin has been in the process of preventing the Haier from becoming a big company for more than a decade since September 1998. The “Market Chain Process Reengineering” project was launched. The project emphasizes the use of coherent business processes to replace the separate and fragmented processes of each department in the past, and introduces the interest adjustment mechanism in the market into the enterprise, and the business relationship between the upper and lower processes, the upper and lower processes and the positions within the enterprise is The simple administrative mechanism is transformed into an equal purchase and sale relationship, a service relationship and a contractual relationship.

Through these relationships, the created external market orders are transformed into a series of internal market orders, forming an order-centric, upper and lower process and positions to engage each other. Regulate the operational chain of operations, each process, each process, and everyone’s income comes from the customers they serve. The degree of achievement of the “market chain process reengineering” goal depends on the ability of information transmission and processing in enterprise management. Mr. Zhang Ruimin once concluded that without informationization, even the best business process and organizational structure rebuilding ideas are difficult to achieve. Therefore, Haier has introduced consulting companies and software systems such as IBM, HP and SAP. That is to say, Haier’s digital construction at this stage is based on process reengineering. The digital system is used to fundamentally enable the original organization.

The structure is redesigned and integrated, which makes the original linear functional structure into a parallel process structure, which optimizes the allocation of management resources and market resources. The digitalization improves the efficiency of the enterprise management system from the aspects of business process and organizational structure. Flexible. The system architecture implemented by Haier in various stages of the digitized process supports the realization of Mr. Zhang Ruimin’s strategic thinking and helps Haier overcome the challenges of shifting from the seller’s market to the buyer’s market and large corporate diseases. With the advent of the mobile internet era, Mr. Zhang Ruimin realized that there is no distance between enterprises and users. In order to quickly meet the needs of users, since December 2012, Haier has successively released the strategy of network strategy, platform ecosystem and the creation of a world-class Internet of Things model.

These strategies are embedded in enterprise platform, user personalization and employees. The creation of the “three transformations” transformation idea, and the continuous improvement of the “one person in one” win-win management model. Haier’s “three-in-one” transformation thinking and the implementation of its management model require the support of a new digital system. The state of the new digital system must have the ability to connect, that is, to connect users and to achieve user needs. As a result of the need for a collaborative ecosystem and interaction through connectivity, Haier will continue to expand its business boundaries. Therefore, Haier’s new digital goal is not only to improve operational efficiency and reduce operating costs, but also to expand the business scope of the company and increase the income of the company around satisfying the endless demand of users. Therefore, Haier can be considered to be moving towards a new digital stage.

In summary, the digitized focus of the enterprise is more on the efficiency of the enterprise itself, involving the process and organizational adjustment of the enterprise management, which brings about the improvement of the efficiency of the enterprise and the reduction of the cost; and the new digitization of the enterprise ( Digital) is mainly concerned with the maximum satisfaction of various individualized demands in the external market, involving the innovation of the organizational form of the enterprise, which brings about the expansion of business and the growth of income. The new digital road can bring to the enterprise increase The traditional competitive advantage is determined by the industry structure chosen by the enterprise and the resources controlled by the enterprise. In recent years, digital technology has enabled the determinants of competitive advantage to increase the ability to effectively use external ecological resources.

To have this capability, companies need to be platformized, and platformization is also the state of the new digital enterprise, which can be derived from Internet technology and applications to the production factors of enterprises, the return to the essence of the enterprise, internal employees and external customers. I understand the effects of three aspects. Therefore, both theory and practice prove that the traditional enterprise form needs to be changed to adapt to the needs of users and employees, and platformization has become an effective form of enterprise. The platform-based enterprise has practiced the thought of the German philosopher Kant: “People are the purpose, not the tool”, that is, let the “people” outside the enterprise change from “customer” to “user”, so that it is originally inside the enterprise.

People have changed from “employees” to “partners.” In summary, the company has embarked on a new digital road, focusing on the principle of “reflecting the value of workers and realizing the individualized needs of users”, and not only adapting to the digital platform of “sharing and sharing value with ecological partners”. The trend of the development of Internet ladders, and can achieve the goals of “expanding business and increasing revenue”. Construction of an enterprise digital new road The traditional Pipeline enterprise form is enterprise-centric. As shown in Figure 3, the value chain is linear in one direction. Enterprises usually design and produce products or services before they are put into the market for sales. User (User ) Finally appeared and purchased.

Traditional pipeline enterprises have difficulty in meeting the diverse needs of users due to their limited resources. The starting point for constructing a new digital road for enterprises is to meet the individualized needs of users. Different from the 2B or 2C thinking that traditional e-commerce platforms think, the digital new road is 2U (User) thinking. Because more and more mature technologies such as automation, big data, and artificial intelligence make it more and more likely that enterprises can configure their own resources on autonomous basis, and configure tasks that can best accomplish these tasks, including those that meet the needs of users.

Resources, which may be internal to the organization or external to the organization. Therefore, the enterprise form built on the new digital system becomes a platform that can integrate various internal and external resources efficiently and at low cost to match the individual needs of users, as shown in Figure 4. Show. At the heart of the platform-based enterprise is the new digital solution. Participants in the program include users with individual needs as well as various social resources such as operators, designers, suppliers and manufacturers. There are two types of outputs, one is the products and services that users need, and the other is One is the vast amount of knowledge generated by the interaction of users and various types of participants. This knowledge can help companies gain insight into the value proposition and needs of users, thereby conducting precise marketing, agile response and intelligent production; of course, organization, processes, etc.

With the support of the digital platform, the enterprise with open and cooperative features has the characteristics of agility and rapid innovation. The dotted arrow in Figure 4 is the part of the participating parties that is concerned about the gains of their own. For the user, it is the products and services that pay for the money or knowledge to obtain their own needs. For other participants, they are realized and get their own income. As can be seen from the new digitization scheme in Figure 4, the prototype of the platform is actually a traditional trading market, but the traditional market is hidden because of the limited information transmission capability; the platform is assisted by digital technology, eliminating The limitations of time and space, the accurate, rapid and convenient connection and interaction between users and various suppliers, coupled with digital payment tools, have greatly reduced transaction costs. Therefore, as traditional enterprises are an alternative to the market, the platform is also an alternative to the market and the evolution of the corporate form.

As the number of multi-party traders increases, the number of connections grows exponentially, because “connection” is one of the elements of business operations. According to bilateral (multilateral) market theory, the platform can not only bring traditional supply scale. The cost advantage, but also can bring the economic advantage of the scale of demand, the platform can produce positive network effects, and thus create miraculous growth, with the support of tools and services to help managers. When it comes to enterprise platforms and network effects, Amazon, Apple, Meituan and Alibaba generally think of companies that have seized the opportunities of consumer Internet. However, the participants of these companies are still limited, especially when it is difficult for users to participate.

The entire process of its needs. With the popularization of new technologies such as mobile internet, Internet of Things and cloud computing, the economy has entered the era of industrial Internet. Enterprises in various industries, including traditional Internet companies, have the challenges and opportunities of transformation and upgrading, guiding the concept of enterprise transformation and upgrading. It is platformized around meeting the needs of users. For example, in the automotive circulation, for car dealers, the traditional view is that car brands and products are manufacturers, the only dealers have customer resources, dealers use the brand and products of the manufacturers and their ability to serve customers. gained profit. However, when dealers integrate users and different auto manufacturers, parts supply companies, financial service companies, and even free maintenance personnel into the digital platform, the number of related connections will increase substantially, and dealers will serve The business scope and business volume required by users will naturally grow.

Further from the satisfaction of user needs, auto manufacturers are also in the digital transformation. For example, Audi Auto is experimenting with shared economic services based on smart connected cars based on Amazon’s AWS platform, by meeting the needs of different users from homes, communities and office buildings. In different ways to help people solve mobile travel problems, Audi has opened up a new business area. It is worth mentioning that it is difficult for both distributors and manufacturers to complete the innovation of user needs on their own. It is necessary to build an ecosystem of products, services and intellectual property around the needs of users. The ecosystem is not only conducive to the establishment of core competitiveness. Consolidation with traditional sources of value, and will also provide enterprises with value sources outside the traditional industry structure and competitive position, bringing growth and returns to the enterprise.

For example, the Xiaomi Group, which was born on the Internet and mainly engaged in the production and sales of traditional products, is a platform-type enterprise that already has the prototype of an ecosystem. When Xiaomi was founded in 2010, he used the online interactive community to understand the needs of users and improve their software to establish user loyalty and trust. In the constant interaction with users, Xiaomi perceives the further needs of users, and realizes that to retain users, increase user stickiness and increase user conversion costs, and increase the company’s revenue, it is necessary to innovate an ecosystem similar to Apple products. system. Xiaomi then designed the Xiaomi mobile phone in interaction with its potential users. That is to say, it was not Xiaomi who designed the mobile phone for the user. The mobile phone sold 100,000 units within 3 hours through the network at the end of 2011. By the beginning of 2018, Xiaomi gradually invested in more than 100 eco-chain enterprises including hardware, software products and financial services based on its platform. In 2018, Xiaomi was listed in Hong Kong, and the total annual revenue reached RMB 174.9 billion, an increase of 52.6. %.

The process of platformization of enterprises such as Xiaomi is actually the process of building a new digital road. In this process, the company gradually establishes a new digital solution, providing a digital platform for continuous interaction between users and enterprises. The needs of users, on the other hand, integrate enterprise ecosystem resources. In the end, based on the development of user loyalty and trust, especially the passion of the company’s brands, products and services, the company achieved cross-border business and rapid growth of revenue. Possible in the new digital road of enterprises trap In recent years, some traditional enterprises have tried to imitate the success of platform-based enterprises. However, the reality is not so simple.

A typical example is GE, which is a company that has undergone the transformation of the “Industrial Internet”. After the 2008 financial crisis, GE’s customers were unable to purchase more products due to global overcapacity and economic downturn. On the other hand, customized demand poses challenges to GE’s traditional manufacturing model, while non-traditional competition Also appeared, IBM, SAP and other companies use GE’s power, transportation and medical equipment to provide users with data analysis and consulting services. In this context, in 2013, GE decided to focus on digital transformation as a development focus, and proposed an industrial Internet strategy: to establish an open global network platform, Predix, to connect machines, data and people to provide data integration and analysis services. This enables real-time and predictable solutions to optimize complex operations for GE’s diverse customer base, including custom products, predictive maintenance, maintenance needs, and decision-making information that provides performance and operations.

In order to focus on the goal of digital transformation, a new digital group GE Digital was established in 2015. However, there are many problems that GE needs to solve in this process, including: users open the data to GE’s trust problem, new service model pricing issues, data and analysis brought by intellectual property ownership issues, ecosystem is the choice Android-style openness or iOS-style closed mode problem, the different human resources problems required by the new manufacturing business and the original manufacturing business, the relationship between the various business units and the Predix platform, and the digital transformation task GE Digital Performance Indicators, the relationship between GE Digital and specific business digitization, and more. However, the above problems have not yet been fully resolved.

GE’s benefits and stock prices have hit new lows in recent years. In particular, it has been proud of its 110-year entry into the Dow Jones Index and was kicked out on June 26, 2018. GE’s digital transformation is still on the road. It is difficult to conclude that it is a success or a failure. However, GE’s problems are the challenges that every enterprise will encounter in the new digitization process, and there are more traps. Typical pitfalls are: First, the concept-oriented trap. For example, referring to the digital transformation of enterprises, most of them will have great market prospects for big data analysis business. In fact, successful big data application business is rare, and there are various laws, security, property rights and privacy. risk. The new digital road of enterprises should not be conceptually oriented, and it should be shared with the ecological partners based on the real needs of users. Second, the technology-oriented trap.

Social, artificial intelligence, AR/VR, blockchain, 5G… New digital technologies and applications continue to flow, and the digitization of some enterprises has become a testing ground for new technology applications. However, Amara’s law tells people that we always overestimate the short-term benefits of a technology, but underestimate its long-term effects. In fact, most of the new digitalizations affecting enterprises are not emerging or called “subversive” technologies, but mature or even “traditional” technologies. Second, the trap of self-directed. Subverting the digital transformation concept of the industry often makes the company think that it must start from the beginning, otherwise it may be won by others. Therefore, these enterprises will attempt to lead from the construction of the platform to the creation of the ecology. In fact, this approach is contrary to the new digital thinking shared by the company. The shared travel of Audi is built on Amazon’s AWS platform, and it is not self-developed. The ecology of Xiaomi is mostly a cooperative enterprise, nor is it independent.

Zero investment. Finally, the trap of rapid success. The rapid development of digital technology has created a sense of urgency and even anxiety for companies, thinking that the new digital transformation must also be realized quickly. For example, GE’s software revenue in 2015 was $3.1 billion. At that time, CEO Immelt proposed that by 2020, GE’s software revenue would reach $15 billion, making it one of the “Top Ten Software Companies” in the world. The main reason for the difficulty of achieving this is that a new digital transformation of a mature enterprise requires large-scale organizational changes, and it is not easy to abandon legacy systems, business processes and corporate culture. Organizational change takes a long time, and past successes are Failure to ensure future success.