What is digitalization?

How to do it?

How to integrate technology with business?

These three questions may seem simple and ordinary, but they also perplex most corporate IT departments on how to explain in layman's terms to leaders and colleagues: to make them listen clearly, understand visually, and cooperate and support in action. In fact, most companies are doing digitalization in a half-understood state, either chasing trends or under pressure, while most business departments and leaders are too busy with their daily work to deeply understand digitalization. This leads to some misconceptions about digitalization, thinking it is useless, always costing money, and creating various troubles. However, the IT department, which is at the center of digital construction, has a strong obsession with it. But whether it is the professionalism of technology or business, it has become a huge communication gap between the IT department and the business department, and the leadership. Therefore, the IT department has to spend a lot of communication costs to explain the seemingly simple but complex concept of "what is digitalization."

So, what is digitalization? How should it be explained to corporate leaders to ensure they understand and can gain their support? "There are a thousand Hamlets in a thousand people's eyes," so different industries and positions have an essential difference in the understanding of digitalization. Today, Lao Yang will deconstruct the concept of digital transformation more colloquially from the perspective of the human body.

If we understand digital transformation as a virtual human body, we can see a complex body structure:

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A skeletal structure supported by various hardware

The exoskeleton is composed of various platform architectures

Software is the flesh covering its body.The internet is like the nerves that permeate the entire body.

Processes are akin to the blood vessels that run throughout the body.

Data flows through these vessels like blood.

Various security products are like the defense cells in the blood.

Financial indicators are like the eyes.

Organizational capabilities are like muscles.

Technology and business are like the internal gyroscope that maintains balance.

Now, let's deconstruct the virtual human of digital transformation:

Most enterprises are easily beguiled by the "flesh" of digital transformation, thinking that digitalization is merely about purchasing software. They believe that by acquiring various software, they can achieve their "desired goals." However, this is actually creating a "zombie digitalization" without a soul. What they don't realize is that software also has its own essence and spirit:

(Note: The original text ends abruptly, and the translation provided is up to the point where the text was cut off. The phrase "三魂七魄" is a traditional Chinese concept referring to the essence and spirit of a person or thing, which is difficult to translate directly into English. Here, I've used "essence and spirit" to convey a similar meaning.)Three Souls: Process, System, Standard

Seven Spirits: Software Architecture, Business Logic, Data Interface, Application Data, Process Implementation, Data Security, Functional Iteration

Processualization, institutionalization, and standardization are the guarantees for the normal application of a company's digital systems. Processualization is not about merely moving processes online without sorting and optimizing them. Directly transferring chaotic and lengthy offline processes to the online environment will only exacerbate the confusion and may even cause numerous process bottlenecks, making the process approval work unmanageable. Therefore, standardizing daily work and institutionalizing procedures is essential for the smooth operation of processes. The three elements of process, system, and standard are indispensable.

An adaptable software architecture system that fits the company's current management or the next few years is a prerequisite for the stable development of corporate digitalization. Choosing software products that match the company's business and have a high degree of capability fit during the digital construction process is crucial, directly affecting the success or failure of digital construction. Therefore, the software selection process is extremely important. Whether the software product can provide interfaces for future business development and data integration between various systems is also very important, directly affecting the company's internal data business expansion and the vertical connection ability with the external ecosystem. The timeliness, completeness, and effectiveness of application data are related to data quality. Dirty, chaotic, and poor business data cannot reflect the value of digital transformation. All of this requires a scientific and professional software process implementation. What enterprises need is a light consulting process implementation, rather than just the software company doing system initialization and reading training PPTs.

The implementation process is a process of standard construction, a process of establishing institutional rules, a process of sorting and optimizing processes, and a key process node of corporate digital transformation. What enterprises tend to overlook during the digital transformation process is data security and the continuous iteration of software functions. These require continuous cost investment from the company. Data security is self-evident, but most traditional enterprises have weak awareness and a strong sense of luck, with huge hidden dangers of data security. The company's business is dynamic, constantly changing with the market, so the software system functions also need to be continuously upgraded and improved. When the solidified software functions cannot meet the growing business needs, digitalization is no longer empowering for the company but a drag. Therefore, digital transformation is also a process that changes dynamically with the development of the company's business.

The human body needs the support of the skeleton, and the underlying hardware construction is also indispensable in the process of corporate digital transformation, such as servers, which are the carrier for the normal operation of the digital system; various network hardware is the place for data transfer and interaction; various IoT hardware is the source of various data collection... Hardware is the basic support of digital technology, and these basic works are often overlooked by many companies. As the saying goes, if the foundation is not solid, the earth will shake; and the network is like the nervous system, connecting all kinds of basic hardware, directly reflecting all kinds of data information. Therefore, the network is the highway during the corporate digital transformation period. Any place that the network nerve cannot reach forms a business breakpoint. As the saying goes, if you want to get rich, you must first build roads. Similarly, if you want to get data, you must first build the network and break through the technical islands.

As the digital construction extends to the technical direction, it is inevitable to talk about various architectural platforms, such as network architecture, business architecture, technical architecture, organizational architecture, etc. These architectural platforms, like exoskeletons, strengthen the digital human body. These architectures have clear division of labor but are interrelated and influence each other. From here, we can see that digital transformation is the transformation of consciousness, organization, culture, methods, and models.

Under various architectures and software muscles, there are blood vessels - processes, and the processes are filled with various value data. From here, it is not difficult to see that the process is the lifeline of corporate digital transformation. The scientific nature, rigor, and efficiency of the process directly affect the value of data. Because the process is distributed in the software body, many traditional companies cannot see clearly and thoroughly, until one day the process data is blocked and they still think it is the fault of the system. In fact, the essence of digital transformation is transformation, not digitalization itself. The process blood vessels themselves are not smooth, which will lead to thrombosis, and the data in the process blood vessels is dirty, chaotic, and poor, which will cause the loss of the nutritional value of the data. Therefore, the most basic requirement of the process blood vessels is to be unobstructed, and the most basic requirement of the data blood is value, and the foundation of value is flow.

The strong intuitive index of the human body is the muscle, and the same is true for digital transformation, which requires various capabilities of the new digital power. The human body lacks muscles and will be weak and powerless, with no sense of value. Digital transformation without various capabilities is also weak and difficult to succeed. This ability includes the decision-making and management ability, organizational ability, cultural ability, technical ability, business ability, and financial ability of the company's top leaders. These abilities are a combination of abilities, not a single ability. The power of any single ability cannot support the overall situation of digital transformation, so digital transformation requires collaboration and symbiosis.

In the process of corporate digital transformation, the most common question leaders ask is:Where lies the value of digitalization, and how can it be demonstrated?

Just like business operations, digital transformation also requires the demonstration of results. Various transformation measures and financial indicators are the "eyes" that reflect the impact of transformation business. In the embarrassing situation where most traditional enterprises find it difficult to reflect and showcase the value of digitalization, corporate leaders always measure the value of digitalization with cost indicators, defining the information department as a cost investment department, and measuring the effectiveness of digital transformation from the input-output ratio of the information department. In fact, this is an extremely unscientific assessment method. Digital transformation brings about the improvement of various management efficiencies in enterprises, and this effect is sometimes not intuitive, is an indirect benefit created by digital technology, and is difficult to measure directly with money. Therefore, digital transformation requires a long-term perspective, and corporate leaders need a pair of strategic eyes to see through the essence of digitalization.

At this point, some readers may have such doubts: The enterprise has made a lot of hardware investments and introduced various information systems, why is the effect of digital transformation still not obvious? Even failed? This is like a baby learning to walk, the first thing to learn is how to master balance, and the same is true for enterprises in digital transformation, which also need balanced development. The two most important points are technology and business.

Technology and business are located at both ends of the balance of enterprise digital transformation. Blindly pursuing the advancement of technology while ignoring the bearing capacity of business, or the functions of the digital system are difficult to meet the needs of business, or the technology department is enthusiastic about digital construction while the business department is indifferent, or the business department bypasses the information department to build its own digital system, all these will directly lead to digital imbalance, and the progress of its transformation can only revolve in place. Therefore, technology and business need to be integrated in the process of digital transformation. Only by integrating digital construction can balance be achieved, and new momentum can be generated to help the development of enterprises.

Digital transformation is a combination of software, hardware, networks, processes, data, and capabilities. It requires the integration of technology and business to build a dual engine for enterprise development. The lack of either will affect the progress of digital construction. The construction of digital transformation requires joint efforts: strategic ability + technical ability + business ability + organizational ability + financial ability, it needs to be inclusive, and it needs to be executed with a combination of strength and softness for common development.

From the public account: CIO Club