By Ren Xianghui, founder of Mingdaoyun
Enterprise Digital Transformation is a concept that has continued to heat up in the past two decades. Technical practitioners and business operators do not have to avoid having their own perspectives of understanding. Each industry will also have its own specific interpretation. Some prefer to talk about this topic in the technical field, and some are based entirely on business models and management innovation. .
In fact, this concept comes from the interaction between technological progress and the needs of business development. Whenever a new technology category appears, practitioners always hope to promote it quickly among enterprise users, so some specific applications are produced, which inspire more enterprise users; after the technology applications are stacked, enterprises face new problems and pain points. , Social and market demands will also change at the same time, which in turn stimulates new technological innovation. After twenty years of such a cycle, the content of digital transformation has been greatly enriched, and business operators at every level can find their own adoptable strategy combinations from this long list.
This article is a collation. Try to make the abstract concept of digital transformation concrete, and use short examples to reduce misunderstandings, make it closer to the practical needs of each company, and more like a concrete action guide.
Customer Experience
1) Establish digital customer contacts
The first content of digital transformation is to focus on customers. The first thing to be solved is that in the digital environment, customers can smoothly find the way to the enterprise. This includes establishing clearly-named certified official accounts on social networks; providing customer portal applications; allowing customers to access related data such as historical orders, reservations, bills, work orders, and knowledge bases, so as to drive customer self-service as much as possible and reduce traditional customer contact. Point (offline service center, call center, etc.) cost burden.
In this regard, airlines and Internet O2O companies are benchmarks. They established such standardized facilities several years ago, and they are the core of operational competitiveness. These industries have adopted the digital service front-end as standard equipment, and competition has been launched at a higher level. For example, airlines have allowed customers to check in through the App several days in advance, and even allow reservations of special taste meals. Cathay Pacific allows users to choose from 21 special meals 24 hours in advance.
Although the application cases of these benchmark industries are very cool, this does not mean that simple things for ordinary enterprises are worthless. On the contrary, in the industrial and B2B fields, the creation of digital customer touchpoints is itself a great innovation. Think about how many raw material suppliers can provide purchasing customers with a customer portal to accurately query the order details of the past ten years and the current order processing status?
2) Effectively reach target customers through digital channels
One of the digital capabilities directly corresponds to the advancement of traditional marketing operations, that is, the ability to directly reach target customer groups through digital media. The popular concept of private domain traffic in China comes from this.
But private domain traffic does not mean accumulating a database of potential customers, but also includes establishing a channel to effectively contact them. Because of the changes in the digital marketing environment, the technological methods for companies to capture and manage potential customers have to be continuously upgraded. Twenty years ago, the B2B industry collected paper business cards, while the B2C industry could hardly carry out any database marketing actions. Now, 90% of users' time is spent on social networks and information flow, which means that companies need to use multiple methods in order to capture target users in the vast ocean of digital marketing.
First of all, no matter whether 2C or 2B companies, they must use high-quality content to attract target audiences and capture their files. Only in this way can companies achieve secondary targeting through social networks and information flow advertising platforms. If you don't have this ability, you can only work with many competitors to conduct targeted communication on external media platforms based on crowd characteristics. The cost is high. In the field of marketing technology, a lot of solutions have emerged around various major platforms (WeChat, Douyin, Toutiao, Taoxi, etc.), which dazzles traditional enterprises. But no matter how complex the digital marketing space is, the essential ability that companies must master is to be able to reach their target customer groups at a lower cost than competitors.
In this regard, the benchmark industry for learning is of course e-commerce platforms. Platforms such as Tmall, JD, and Pinduoduo have used their digital marketing capabilities to the limit. Combined with the crowd portrait, they can not only easily use it among their platform users, but also transmit the portrait data to the entire Internet space, chase you to Weibo, find you to headlines, and find you to WeChat (because of the ecological isolation in the Chinese market) , They each have their own camp). Some people worry that such cross-domain precision marketing infringes on consumer privacy, or worry about ineffective marketing caused by overfitting, but it is undeniable that digital precision marketing has contributed to their high growth overall.
For an ordinary enterprise, you cannot have a huge user group like an e-commerce platform enterprise, but the essence of the marketing goal is the same. This means that digital companies need to seize every opportunity to obtain the characteristics and behavioral data of potential customers and existing customers, and use these data to effectively trigger target audiences, and operate each marketing activity in a refined manner. Media channels, even every keyword.
3) Solve the real pain points of customers
This point is more general, the situation and opportunities of each industry are different. Digitization not only means solving comprehensive marketing and service problems, but also actively using it to solve customer pain points. The most classic example is the product intelligence strategy of home appliance, electronics and automobile companies in recent years, which connects isolated devices through the Internet of Things technology and provides friendly user services through consumer Internet products and platforms. Various hardware products with the "smart" prefix do this. However, not all of these digital innovations have solved the pain points of customers. Some of them are imaginary by the manufacturers, and they are digitized for the sake of digitization. Customers do not appreciate it.
Outside the smart hardware market, such opportunities abound. Home improvement related markets (decoration, furniture and household products) can use virtual reality and 3D modeling technology to provide customers with product simulation; the hotel industry provides smart phone-based keyless services; the catering industry does not have to wait in line and scan codes to order food. Today, no matter how delicious a restaurant, if customers are required to wait at the door, there is no doubt that there is no customer-first spirit. In the direction of the application of digital technology, the first thing that should be solved is the customer's pain point, even if it is just a wireless charger at the bedside of the hotel.
Therefore, when you are wondering which direction the digital transformation should go, the first thing to think about is what pain points the customers in this industry have that have not been solved, and how many of these pain points can be solved or improved through digital technology. In this regard, there are many opportunities for cross-industry learning.
Business and operations (Operations)
4) Digital business objects
We go from the customer experience to the internal operating process of the company. A major feature of a digital enterprise is its abundant data records. As long as the business objects exist in the business process, there will be a real-time and accurate database. What is a business object? It is not complicated to say, it can generally be simply understood as all the people (or organizations), things, and things in business activities. For example, customers, suppliers, contacts, and employees are people, purchasing materials, selling materials, inventory, inspection orders, equipment, warehouses, vehicles, and funds are things, while purchasing behavior, inspection behavior, processing behavior, quotation behavior, and order signing behavior , Delivery behavior, payment behavior is the matter. Moreover, you will find that these business objects are related to each other. For example, customers are related to sales materials, sales materials are related to orders, and orders are related to delivery. Establishing digital records of all business objects and building them into a relational database is the IT cornerstone of a digital enterprise.
The behavior of this digital business object existed in the early days through unconscious document records and Excel files. To become a digital enterprise in the true sense, these digital business objects must exist in an IT facility that can record in real time, share securely, and query interactively. Enterprises achieve this goal by purchasing and developing application software. The zero-code application platform we are on is an excellent tool to solve such problems. It enables companies to realize high-level digitization of business objects at low cost according to the boundaries and characteristics of their business.
If you can overcome the difficulty of data isolation between systems with different architectures, and make all business data available on one platform, you can get the so-called data center achievement.
In the retail industry, achieving this is crucial. If product data, pricing data, sales data, and customer data from different channels cannot be aggregated, it will be difficult to improve operational efficiency.
5) Automated business process
When the business objects have been digitized and run online, you can find the links in the business process that rely on manual repetition and automate them through programs. Data generation, changes, and specific times can all become "triggers" for business process automation.
Although product design, creativity, marketing management, quality attribution, B2B sales and other links will never be separated from human participation, in a completely online business, automation applications can almost run through the entire value creation process, such as the commodity up and down of e-commerce services The management of racks, customer order-driven logistics services, and advertising campaigns can all be automated through specialized industry applications.
In offline business, relying on the combination of software and hardware can also realize the intelligence of the operation process. For example, a digitally broadcast movie theater can theoretically achieve more than 90% automation. Ticket checking, broadcast control, and product sales can be completely unmanned, limiting the labor cost to the lowest level. A parking lot that supports mobile payment is a typical business driven by process automation. Ideally, no one needs to have it.
A large number of traditional enterprises are still using manpower to perform repetitive tasks with very low performance, such as placing purchase orders, shipping and tracking logistics, issuing invoices, reconciling accounts, and notifying customers. After realizing business data online, these processes are very easy to automate.
In the software business of Mingdao Cloud, every time a new customer order is signed, the system will send a welcome email to the new customer in my name, introducing the background and development history of our company. If I do this work manually , Is extremely costly. But when I receive enthusiastic responses from customers, then I am very happy to respond with human flesh.
6) Data-based decision-making
Data-based decision-making does not allow data to directly make decisions. If it is, it is the business process automation mentioned in point 5. The so-called decisions are made by managers. But his decision cannot leave the data. It should be a combination of objective data and subjective strategies.
Several major decision-making areas that affect the level of business operations include: determining the direction and scale of R&D investment; the choice of marketing investment; pricing and commissions; investment and financing activities; attribution of operational quality issues and personnel recruitment, appointment and removal of cadres. In enterprises in the project production industry, project resource input and time period are also common problems. Faced with these daily decisions, ordinary companies often rely on experience and customs, but in most cases, they are sub-optimal. Only the data decision engine can help decision makers increase the probability of success. Therefore, the prerequisite for data-based decision-making is that business objects and activities have complete and credible data records. Especially today as machine learning technology is becoming more and more mature, having massive historical operating data has become the input energy for data intelligence.
In industries with a Yield Management model, data-based decision-making is a standardized operation method. For example, the daily price of the hotel industry is a dynamic forecasting process. Do other industries also have such opportunities for lean operations? The answer is yes. In the process of digital transformation in each industry, there are always talented people who are exploring the operational mysteries behind the data. Once they are obtained, they will have the opportunity to build a high-value platform enterprise.
Organization & Culture
7) Task-based organization
Speaking of this, the technical part of enterprise digitization is basically complete. But the next part may be more important, it is about the organizational and cultural changes in the digital transformation process. Some people suspect that digital transformation is not just an IT project? Why must the topic of organizational culture be involved?
the reason is simple. To successfully master these digital methods and technologies, companies will rely on a large number of employees who are familiar with and good at digital tools. These new generations prefer a specific organizational environment. In other words, these contents are the organizational foundation of an enterprise's digital transformation. Similarly, digital construction projects are different from other tasks. They rely on professional teams and project organization. Traditional enterprises have fewer existing capabilities in the hierarchical structure. They must open the door and introduce a group of new skills. Talents, complex collaborations with existing managers with industry experience.
Therefore, the first point about organizational culture is to create a "task-based organization." The so-called task organization can also be understood as a decentralized organization and a flat organization. They have weakened bureaucratic relationships, lowered departmental barriers, and established collaboration around key projects and tasks. These organizations must be able to accept non-senior personnel to manage important projects, increase their power, reduce their responsibility for errors, and enable them to cross the internal boundaries of the organization, inspire teams and use resources.
What "key projects and tasks" will be generated in the process of digital transformation? Each enterprise can decide the speed and scale according to its own pace. But no matter how fast or slow, the digital technology application process mentioned above will definitely correspond to one project after another. "Order Digitization", "Work Order Digitization", "Quality Management Digitization", "Performance Digitization" and so on. When such project tasks can include enterprise-related functional managers, key employees and digital technicians, and transparent communication and flat collaboration on a platform, digital transformation will really start.
8) Crowdsourcing and remote working capabilities
The 2020 epidemic has exposed a watershed in the way companies operate. During the months of isolation and closure, some companies had to stop all operations, while others seemed to be unaffected. The adaptability of different companies to telecommuting is different. It depends on the differences in their abilities in advance. Only companies that are fully authorized and agreed and are accustomed to working in a digital environment can successfully adapt to the needs of remote work. Those basic business objects have no digital records, and companies that rely on levels of communication and collaboration are often slowed down by remote work.
In addition to remote work, people involved in work may also have different boundaries. Generally, companies can only mobilize their own employees, while digital companies have the ability to easily recruit and manage a large number of part-time or full-time participants from the digital space. Even if the output is the same, companies with crowdsourcing capabilities must have greater agility. What's more, based on independent choice, fully motivated crowdsourcing personnel tend to be recruited by companies with stronger combat effectiveness.
In the field of Internet design services, companies like draft design and Yi Qixiu can mobilize not employees of their own design department, but Chinese designers all over the world; even in traditional manufacturing, there are companies that attach importance to labor and employment data The ability to quickly hire hourly workers from a well-managed labor pool greatly improves the ability to deliver orders. E-commerce companies like Taobao, JD.com, and Pinduoduo employ tens of millions of people as their business promoters through the Internet.
To organize and manage a large number of external workers, of course, it is inseparable from sophisticated digital business process management and collaboration tools. They are mutual cause and effect, making it easier for companies that value digital construction to master the ability of crowdsourcing.
9) Employee freedom
Employee freedom is rarely associated with corporate digitalization, but there is a close relationship between the two.
First of all, comprehensive digital management makes management control actions of managers unnecessary. When automated process control is in place and business data and decision-making information are comprehensive, it is naturally easier for employees to make discretionary decisions. Moreover, the digital record of all operating activities also makes the cost of inspection and supervision after the fact lower.
Secondly, the rich enterprise data resources themselves are to empower the team, and all digital enterprises do less unnecessary control, otherwise the digital results will not be enjoyed at all. Enterprise data can be kept in a system with clear authority and interactive query, so there is no need to worry about employees copying several Excel files. Digital management makes management easier, and managers do not need to spend too much administrative input.
In addition, digital operations will bring numerous micro-innovation opportunities. Only in a management culture with a relatively high degree of employee autonomy can such innovations be nurtured. It is one of the biggest benefits of digital enterprises.
Business Model
10) Business model upgrade
Whether companies of different industries and sizes can subvert their business models and establish superior competitive advantages in the digital innovation process also depends on many other factors.
The so-called business model upgrade is nothing more than to build a business with higher continuous gross profit and higher barriers. It is usually related to subscription revenue, platform transaction revenue, cost leadership and differentiated value added by a high degree of automation. Not every company has the opportunity to achieve such a huge leap, but companies that are fully digitized can at least optimize their original business models to some extent.
For example, a retail company may establish a membership fee model and establish a win-win mechanism with customers because of the comprehensive intelligence of customers and transaction data; professional service companies may not only continue to receive customer project income, but also establish online knowledge bases and lightweight Advanced consulting products to lower customer thresholds; SaaS software companies can help customers complete closed-loop business transactions, thereby expanding revenue sources.
The business model is a very complex topic, and it takes a very arduous process from the idea of the manager to the realization. In this process, the level of digital management determines whether companies can see and seize such opportunities. Therefore, the business model upgrade is often the last leap of a digital enterprise, making it a real distance from the latecomers.
The author of this article is the founder of Mingdaoyun. This is a zero-code enterprise application platform, known as APaaS in the industry, which can help digital enterprises build business data management and process automation with extremely high efficiency. Click to read the original text to continue reading the article on Mingdaoyun blog.
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