Digital transformation, the key is "people", the hardest is "people"

The following article comes from the Economic Observer, the author Liu Jin

"In the future, business is intelligent, and the approach is digital. The choice of an enterprise is not to digitize, but when, how much efforts are used."

Author | Liu Jin

Source | "Economic Observer"

Liu Jin

Professor of Accounting and Finance of Changjiang Business School

Director of Investment Research Center

It is not new to promote digitalization.

The commercial application of computers began in the 1960s of large -scale machines, and then evolved to medium -sized machines from the 1970s to the 1980s. Personal computers have not started to popularize large -scale until the end of the 1980s, so that computer applications have entered millions of households from pure commercial scenarios.

The Internet revolution since the 1990s was the digital transformation of the overall society. Due to the low starting point of personal digitalization, it is a "revolutionary" to a large change point. But in the process of the Internet revolution, the digital transformation of enterprises has never stopped.

Compared with consumers, the level of digitalization of enterprises has been leading, which can be described as a level at all.

From the digitalization (MRP) of the production process in the 1970s, to the full business process management (ERP) in the late 1980s, to the customer relationship management (CRM) in the 1990s, to the last 20 years of big data, big data, Cloud computing and artificial intelligence, enterprises have been at the forefront of digitalization.

The digitalization process of the enterprise is as long as half a century. Why does it attract so much attention today?

possible reason:

First, the digital level of Chinese companies has a large gap compared to international leading companies and is quickly catching up.

Second, the core role of Internet giants in the economy is increasingly obvious, and the role model effect is produced.

Traditional enterprises realize that IT technology is not just a matter of network giants, and all enterprises must become Aboriginal people of IT technology.

Third, the Internet revolution has completely changed the relationship between enterprises, enterprises and terminal consumers.

This relationship transformed from the connection of analog signal (voice, image, text) to a digital signal connection. In order to better serve customers, the company must also use digital connection to replace analog signal connection, which is the direction of digitalization.

Difficulty in the digitalization of enterprises

The revolutionary progress of IT technology mainly involves four aspects of information: computing, storage, transmission, and collection.

In the field of computing, Moore's laws have doubled the computing power of the chip every two or three years. As the price is basically constant, the increase in computing power means that the cost of computing is reduced at nearly 30%per year.

What people are rarely mentioned is that Moore's laws are also played in the storage, transmission, and collection of information. In the past 50 years, the compound rate of information storage costs has also decreased by 30%per year.

At present, the Gigabit fiber of the family's Internet access is 100,000 times the speed of dialing the Internet in the early 1990s. The huge technological progress of these technologies brings possibilities for the huge amount of data.

In the past ten years, global data collection has increased by more than 30 times. Big data analysis and artificial intelligence are based on massive data and extremely low computing costs.

Why is the Internet revolution? Actually the digital transformation of the entire society?

The platform companies on the Internet, including search, e -commerce, entertainment, media, social networking and other platforms, can be regarded as cloud computing companies. The personal online behavior is actually using cloud computing SaaS services based on free or paid.

The digitalization of society is relatively easy to promote because consumers themselves have great business value. In the case of extremely low information costs, the platform can obtain consumers by providing free SaaS services, and then use advertising or other paid services to monetize consumer value.

The core ability of the Internet platform is to attract traffic, attract consumers to join the platform with one or more information services, and then attract more users through the stickiness and network effects of the product, and at the same time enhance the platform activity.

The digitalization of the enterprise is exactly the same as the technical foundation of the social digitalization, but there are four differences in economic characteristics.

First, the digitalization of society depends on the attraction of technology and services, and is the product of the bottom. Enterprises are administrative organizations. Digitalization often needs to be promoted from top to bottom.

Second, SaaS applications in the digitalization of society are often simple and easy to get started; the applications in the enterprise are complex, diverse, professional, and have higher learning costs.

Third, the object of digitalization of society is people; the object of digitalization of enterprises is the organization network connected by people, machines, and people and machines.

Fourth, due to the large number of users, the overall social value is huge, but the marginal cost is zero, and the average cost is extremely low. On the contrary, the digitalization of the enterprise needs a large number of customized services, the investment is huge, the income is greatly uncertain, the return on investment is long Below the process of digitalization.

It is precisely because of these differences that the digitalization of enterprises is more difficult than the digitalization of society.

The results of a very high proportion of corporate digital projects are disappointing. However, in the pressure of competition, companies have to try, because if digitalization is successful, it can bring valuable efficiency improvement and competitive advantages to enterprises.

The problem that enterprises should think about is not how to avoid 70%of the unsuccessful enterprises, but to ensure that entering 30%of successful companies. Because it is not successful, it is equivalent to failure. If it cannot be among the successful ranks, it may be eliminated like a company with digital failure.

In the process of digitalization of the enterprise, the easiest to succeed is the automation and intelligence of production. This is not to say that things itself is simple, but because the intelligent transformation of the machine is small, the cost and income are clear, and the risk is controllable. As the cost of labor increases year by year, the intelligent production of machine substitutions becomes more and more attractive. The difficulty of digitalization of enterprises is the digitalization of the organization, including the digital transformation of everyone and organizational behavior.

Due to the high learning cost of new software and new systems, the natural default reaction of each person is to continue to maintain the old system and reject the new system.

Secondly, the digitalization of enterprises is not the use of simple IT systems, but the fundamental changes of organizational and management.

This change will inevitably impact the personal interests of the organization in the organization. Some people benefit, and some people lose it.

Therefore, in order to promote the application of the new system, it must be supported by the will of the whole system from top to bottom.

The key characters in this are not IT directors, nor is the personnel supervisor, but the company's leader.

The first leader not only needs to consciously learn to use the new system voluntarily, but also the main promoter of the new system, so that the entire organization can be updated.

To do this, the leader must establish a digital strategy of an enterprise at the cognitive level, form a digital strategy, and requires enterprises to have both the two talents that are proficient in IT and management, and the in -depth understanding of IT technology in organizational management.

For traditional enterprises, these are shortcomings that need to be supplemented. Therefore, in the process of digital transformation, many enterprises often do not have clear roads, inadequate will, insufficient investment, and tasting. As a result, the probability is not too good.

Digitalized primary results

Why is it not easy for traditional entrepreneurs to produce digital thinking?

Because the business model and organizational management of traditional enterprises are built in an environment with high information costs.

As mentioned earlier, the cost of information includes four aspects: computing, storage, transmission, and collection. When the cost is high, enterprises must adapt to high costs through business models and organizational management.

For example, traditional enterprises attach importance to channels because consumers have high information search costs before the Internet, so they generate dependence on offline channels. However, e -commerce easily breaks this competitive advantage that relies on offline channels.

Traditional enterprises' awareness of brand advertising is also based on the cost of high information. The Internet makes people's attention more enduring and more personalized, and Internet celebrities and live broadcasts can also impact the value of traditional brands.

Organizational management issues in traditional enterprises mainly come from information asymmetric and moral risks in the enterprise.

Information asymmetry includes information asymmetry between superiors and information between departments.

The appearance is that the superiors do not know what the subordinates think and what they are doing;

The subordinates do not know the core attention points and macro intentions of the superiors;

The departments are all politics, and they often play zero -sum games.

In order to solve these problems, traditional enterprises have to often convey documents and convene everyone to meet together in order to obtain consensus. However, if the information problem is too serious, the final result is "Wenshan will be sea", leaving little time for business.

The moral risk in the enterprise comes from information asymmetry and conflict of interests. The private interests of enterprise employees must be different from the overall interests of the enterprise, and information asymmetry protects the various private behaviors of employees in their work.

Such as conspiring private, fake public, laziness, not doing it, opening one eye closed, and so on.

Enterprises have to establish a high -cost incentive mechanism to keep companies and employees as much consistency as much as possible.

At the same time, the problems faced by enterprises are on the one hand, and on the one hand, the central government has to centrally control the risk of morality; on the one hand, it is necessary to encourage subordinates to be responsible to make a rapid response to market opportunities.

The larger the company, the more important the former is, there is a "big corporate disease". Enterprises have lost flexibility and innovation ability.

Digitalization can largely alleviate these problems of the enterprise.

Through digital collaborative office, enterprises can flow information at a very low cost, so that information sharing between superiors and departments can be used. Because most of the information and communication are generated in the digital platform, for managers, the information that the lower level can see can be seen, which greatly reduces the asymmetry of the information.

Without information asymmetric, natural moral risks have no soil. Based on more efficient monitoring capabilities, enterprises can trust front -line employees more and decentralize their power to achieve higher flexibility and market response efficiency.

Finally, the company can use big data analysis and artificial intelligence methods to analyze the precipitated data to obtain "intelligence" in organizational management.

Enhance communication efficiency, reduce the asymmetry of information, and the moral risks of employees can be regarded as the primary results of digitalization. The reason why it is primary is that the human brain is still the only carrier of corporate thinking and making decisions.

However, data precipitation and artificial intelligence make machine thinking replace and supplement the lack of human brain at many levels.

Just as the machine vision can surpass the discerning power of ordinary people's eyes, machine hearing can exceed ordinary human ears, AlphaGo can defeat Li Shishi, Ke Jie, and so on.

AI can also find countless hidden errors in the management field, propose a improvement plan, and greatly shorten the reaction time, thereby revolutionizing the company's management and operational capabilities.

In the future, business is intelligent, and the way is digital.The choice of an enterprise is not to digitize, but when, how much efforts are used.The picture in the article comes from Tuwu's creativity, and the reprint needs to be authorized.

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