Get ready for digital transformation

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The recent popular topic in the corporate world is “sustainability”, and major companies have used sustainability to decorate their corporate image, but we want to talk about the “digital transformation” that was very popular a few years ago.

A few years ago, I talked to a certain treasure who worked with him at the time about digital transformation. At that time, he stereotyped that digital transformation must be superior, and the solutions we can provide are too small to be qualified to use the signboard of digital transformation. It’s a bit more rigid, but there’s actually no right or wrong, because digital transformation is not a precisely defined term at all, it’s more like a concept, which later became a flooded marketing slogan that everyone has their own interpretations. For me, Taking a relatively broad view, I personally divide digital transformation into three levels:

  • electronic document
  • process digitization
  • Operational intelligence

electronic document

electronic document

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For example, all kinds of paper documents, manuals, forms, and records are changed into computer files. In addition, paper communication is changed to e-mail , e-mail has been replaced by IM apps such as Telegram, LINE, LINE WORKS , etc. It’s part of electronics.

The digitalization of documents saves paper consumption and physical space for storage, but compared with the cost of purchasing a computer, these savings are not the slightest advantage. Even in 2022, there are still many small and small businesses who are still stagnant. They are still using the fax machine to take orders.

The reason why I can’t feel a strong advantage is that the sense of advantage comes from the digitization of the subsequent process . If the promoter’s vision only stays in electronic, then there will inevitably be a feeling of “spending so much money to buy a computer, it is better to write quickly”.

process digitization

process digitization

Web illustrations by Storyset

If the previous e-commerce is an ancient era, then process digitization is the representative of contemporary digital transformation. The booming e-commerce, payment, and delivery are all digital processes that can be felt in detail. Inside enterprises, various ERP , BPM, CRM, WMS, and MRP systems replace traditional processes. Not only are documents electronic, but processes are also digital. The digitalization of processes has improved operational efficiency by more than an order of magnitude, and made it possible for cross-domain and multinational companies to exchange information.

At this stage, the so-called digital transformation is essentially changing what traditional people do to systems, and decision-making points in the process still require human intervention. Take the book retail industry as an example, ” Principles of Web API Design ” E-books are available from US$36 to US$43. If you are an operator of this type of book, you often have to constantly check the prices of other companies and follow up. If you push the thinking of digital transformation a little further, you will realize that something like this In fact, the process of price checking → follow-up can be completely without human intervention, which is the next stage of operation intelligence .

Operational intelligence

Operational intelligence

Online illustrations by Storyset

In addition to the example of the book retail industry mentioned above, the financial industry has also realized that a person’s credit can be directly evaluated based on his past transaction records, without the need for the lender to provide financial proof, in the joint credit report, In the modern era where payment behavior has been E-oriented, a consumer loan can be completely free from human intervention from application to appropriation. This model is not only digital in the process, but also in the lending decision. It can be established as long as there is enough data. Come up with a risk model for certain demographics. When the risk model is known, even a credit novice can be granted a loan. This model is not a new trick. Most of the first credit card limits in everyone’s life are like this. It’s just that with the help of modern data models, the card verification process and decision-making are digitized and free of manual intervention, which even leads to specialized industries such as “post-payment”.

In terms of consumer behavior analysis, the RFM model is still used. The difference is that the system starts from collecting and compiling data to sending marketing messages. In the field of online advertising, the bidding mechanism of Google Ads is completely matched by the system. Conversely, if Without an automatic matching mechanism, it is obviously impossible to match such a large amount of advertising supply and demand manually.

The above three-tier classification of digital transformation may not be in line with the traditional impression of digital transformation. Traditional digital transformation focuses on methodology. The introduction of ERP is digital transformation, going online, offline is digital transformation, and the production line table setting robot arm is Digital transformation (Processing Industry 4.0), building a DIY war room magnifying screen is a digital transformation, and buying an AGV automatic turtle car is a digital transformation. It’s just that, these people’s understanding of “intelligence” is still at the level of “helping people do things”. The existence of robots is only to increase production capacity, which is indeed very intelligent, but the more intelligent level should be to speed up the process and eliminate it. , Will there be room for steering wheels, rear mirrors, and pedals in self-driving cars in the next ten years?

If you take the meaning of digital transformation, you will find that the hidden behind is the reengineering of organization and process, and only in this way can we move toward the process from addition to subtraction, and only pursuing the superficial large screen and robot is to abandon the basics.

The above discussion may seem illusory, but in fact it is already in the present tense, and are we ready? Or are they being forced by the market? At what level?

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