Shulou(Shulou.com)06/03 Report--

Six months ago, the company's leading group decided to formally stop using the cloud ERP system that had just been online for six months, the finance department reactivated the old system, and the business management function was developed independently.

Although this cloud ERP project has invested a lot of money, the project team and various departments have also invested a lot of manpower, but the results of the project did not meet expectations. Now, it seems that decommissioning Cloud ERP may increase some non-standard risks, but it releases a lot of manpower and improves the efficiency and flexibility of the front desk business. Therefore, CEO and core executives are very supportive of this decision. In my opinion, this small episode, which is inconspicuous in Chinese corporate circles, has a special implication: the era of ERP is fading away, and the era of digital transformation is coming. Going back to the previous case, "cloud ERP" is a very interesting concept. "ERP" is the most representative enterprise management software in the past and a symbol of the information age. The "cloud" is the symbol of the digital age, it can be said that the "cloud" is the basis of digitization, digital transformation is bound to go on the "cloud". However, if you just move ERP to the cloud, you will think that it is a digital transformation, which is a bit of a joke.

Digitalization subverts informatization

What is informationization? In fact, it is to input the "results" of the work into the system, so as to improve the transparency of the process and improve the efficiency of departmental coordination and process control. For example, in the case of sales management, we enter customer leads and the results of each customer visit through the CRM system; if we close a deal, we will also enter contract data, which is the informationization of the past. Informatization emphasizes the collection and analysis of data, focusing on control and analysis, which is the product of the industrial era. The same is the sales management, if we use the SCRM system, then when the customer visits our product page, we can browse the product information on the mobile phone to help him make consumption decisions; at the same time, the system is also synchronously recording customer browsing behavior, analyzing customer concerns and transaction probability, and reminding sales staff to contact customers at the right time. When the customer is still short of a foothold in the transaction, the salesperson can issue a coupon through Wechat to facilitate the customer's purchase. The online behavior of customers and salespeople is recorded by the system in real time, so the system can not only make customers have a better transaction experience, but also help salespeople improve transaction efficiency. This is digital. Digitalization emphasizes empowerment and motivation, focusing on humanization and intelligence, which is the inevitable result of the Internet era. The Internet era requires the concept of matching IT tools, which is the reason why the informatization represented by ERP is bound to come to an end.

The anxiety of Digital Transformation

Take the fitness industry as an example, this is a 1.7 trillion market size of the industry. Keep, a digital fitness software that allows users to work out at home, has more than 200m registered users and is said to have more than 30 million monthly active users. In July 2018, Keep announced that it had received $127 million in D-round financing, led by Goldman Sachs and followed by Tencent and other veteran shareholders. In sharp contrast, the traditional fitness chain goes bankrupt frequently. So Fitness, founded in 1992, once had 160 gym stores. Also in 2018, Sha Hao reported rumors of unpaid wages and shop closures. All 45 stores in Beijing were closed in July 2019, which now looks unlucky. The above case can more or less represent the anxiety of traditional business bosses. Many bosses take the initiative to embrace the Internet, such as building official websites and opening stores on Taobao. But how many problems can be solved by such "surfing the Internet"? A boss complained to me that now Taobao is selling at a loss. The more you sell, the more you lose. He said with a smile: Jack Ma said that there is no difficult business in the world. Now the situation is that Jack Ma's business is getting better and better. But other people's business is getting harder and harder. Digitization is not simply to open a shop online, or to build an official Wechat account. In addition, it is a pipe dream to expect to find a high-end consulting firm or a set of digital software to realize the "digital transformation". If traditional enterprises do not have a deep understanding of the nature of digitization, digital can solve what problems are in a hurry to transform, it is basically messing around.

The essence of digitalization

The essence of digitization is the comprehensive "online" of customers, services, employees and processes.

"online" makes Internet tools greatly enhance the empowerment and motivation of users. For example, Wechat is a typical "online" tool. We carry it all the time, and it's always active. We use Wechat to socialize, Wechat to shop, Wechat to work, and through "online" Wechat and other Internet tools, we can be empowered and inspired anytime, anywhere. Of course, Wechat, in turn, is collecting our data at any time, and using the data to continuously improve its service capacity to form an intelligent closed loop. "online" means lower costs, higher efficiency and better services, as well as the future of intelligent commerce. This is the significance of digital transformation: to break through the current dilemma of high operating costs and low customer satisfaction, and have the possibility of creating a new business model. Of course, "online" may not be the only way to succeed, and there is still hope for success in the traditional way of playing. However, in this digital and intelligent era, not "online" means not keeping up with the trend of the times and is likely to be eliminated by the times. 04

The opportunity of Digital Transformation

The digital transformation of traditional enterprises is very difficult. But the best time for transformation is coming. With the development of their own business gradually reached the ceiling, Internet giants such as Tencent and Alibaba have put forward the concept of "industrial Internet". The so-called industrial Internet is actually opening up the capabilities of Internet companies to traditional enterprises to help them achieve digital transformation. It is as if a company has changed from being self-sufficient in power generation to a power supply company; users can easily enjoy clean energy at a very small cost. At the same time, Internet companies have trained a large number of digital talents, which are spilling over to traditional enterprises. The talents and tools needed for the digital transformation have been relatively mature, and a large number of traditional industries are still unreformed virgin land, so now is the best time for the digital transformation of traditional enterprises. 05

How to carry out Digital Transformation

In the information age, the most popular methodology is BPR, that is, business process reengineering. However, I have observed many large enterprises, what they call BPR, in the end, only mechanically informationize the original process. The deep-seated reason, in addition to the difficulty of reform, far from being promoted by consulting companies, the project system methodology of ERP also determines that the project team must put risk and cost control in the first place. Therefore, the process that compromises to the reality has become the best solution of the so-called "process reengineering project". Therefore, the transformation depends on the internal backbone of "deep understanding of the enterprise", and the consulting firm can only be used as an assistant to the transformation. At the same time, we should be prepared to fight a protracted war, break through locally and bring about a comprehensive transformation.

The Breakthrough of Digital Transformation

Revenue growth is the general demand of enterprises, marketing links can directly bring revenue growth, marketing digital program is also very mature. Therefore, digital marketing is undoubtedly a very good breakthrough in the transformation. Personal suggestion, digital transformation, can break the situation from the marketing department. The above is the overall plan of the SCRM system of the consumer section of my company. By building the employee work platform, member service platform and new customer drainage platform in the Wechat system, we can realize the digital management of the whole marketing process from customer acquisition, cultivation to transformation and repurchase. At present, the SCRM system has 99% of employees' monthly active users and 90% of valid members' monthly active users. Although it is still in the early stages of construction, it is already showing its power: triggering Wechat messages through offline customer behavior (such as service swiping by card) and guiding customers to Mini Program for repurchase. During the initial operation, the drainage conversion rate (visit volume / message delivery volume) reached 15%, and the transaction conversion rate (transaction volume / visit volume) reached 30%. More importantly, the process is automated and self-service, changing the sales model that used to rely entirely on employee promotion. Of course, there are differences in the focus of digital transformation among different types of enterprises. For example, to B enterprises value efficiency more than to C enterprises. Therefore, to B enterprises will pay more attention to the application of efficiency tools. For example, we have enabled the electronic contract in the warehouse rental section to sign the contract directly through the mobile phone. In addition to saving the express delivery cost of 24 yuan per contract (the warehouse contract is signed every month, and in order to avoid travel expenses, the signing work is often completed in different places), the signing time is also shortened by 97%, and the payback cycle is shortened by 7 days. greatly improve the efficiency of work and services.

The key to the success of Digital Transformation

Even if we understand the nature of digitization, we still face some important questions: how should we proceed with the digital transformation? What key points do we need to pay attention to in order to improve the chances of successful transformation? For the digital transformation of traditional enterprises, I suggest taking the following steps: first, introduce Internet talents and integrate the IT department into a digital transformation team. Mature talents from Internet companies already have Internet awareness and master Internet methods and technologies, which is a necessary force for digital transformation. Second, the top leader takes the lead in compiling the path of digital transformation and iterating constantly in the process of advancement. Enterprise reform can not be plain sailing, without the support of the leader, it is difficult to achieve results on that day. Third, the local breakthrough, through the digital transformation in the marketing link or service link, drive other links to carry out digital transformation, so as to achieve the overall digital transformation of the enterprise. Here, it is necessary to explain why it is recommended to introduce talent first and then formulate a strategy. Digital transformation is a profound change, which can not be achieved overnight, so we must rely on talents to dynamically adjust the strategy. Liu Chuanzhi said: set up a team, set a strategy, and lead a team. He stressed that this order cannot be reversed, and the reason is that the core team is an important prerequisite for strategic adjustment and strategic implementation. In order to improve the success probability of digital transformation, enterprises also need to pay attention to the following points: first, digital transformation is the number one project. Digital transformation will directly transform the core process of the enterprise, and even impact the original business. If the top leaders do not have a deep understanding of digitization and strongly promote the transformation, then the hope of success is very slim. Second, it is very important to recruit a good CIO or information director. Considering the great difficulty of transformation, the importance of a good responsible person cannot be overemphasized. Third, the digital transformation must take the enterprise itself as the core and can not rely on external forces. Digital transformation involves all aspects of the enterprise, and it is a long and complex project, which must rely on the core personnel who understand the enterprise and are highly consistent with the interests of the enterprise. On how to use the consulting company, I very much agree with Liu Chuanzhi's point of view. Liu Lao said: "Today, Lenovo Holdings does not ask the consulting company for help on major macro and strategic issues, but when it encounters problems, it still thinks of discussing and discussing with the consulting company. To me, consulting firms are a bit like faculty in business schools. I think it is difficult for them to come up with specific ideas, because fighting a war requires a good understanding of both subjective and objective aspects. Fourth, go online quickly and run quickly in small steps. Digital transformation is essentially innovative work, as long as it is innovation, it is bound to be accompanied by setbacks or even start all over again. We should be careful to invest to avoid causing great harm to the operation of enterprises. Fifth, keep moving forward and keep reviewing. There is no doubt about the power of digitization. If the direction is right and there is no problem with the team, then it is the right choice to keep moving forward, constantly reviewing and improving.

Conclusion

This is the best of times, but also the worst of times. Enterprises that succeed in digital transformation will become smarter and have a better tomorrow, while failed enterprises may soon be eliminated by the tide of the times. I hope all of us can face up to the challenge and take the initiative to change. Finally, I quote a passage from Professor Zeng Ming as the conclusion of this article to share with you: "how can enterprises become intelligent? technology itself is not the biggest obstacle, the real challenge is whether people can re-examine all their businesses, all processes, and even carry out comprehensive transformation and innovation with smart business ideas." that's the hard part. Brief introduction of the author: Wang Deming, many years of experience in Internet product and information management. He has served as the project manager of Oracle Company and the director of group informatization in an Internet company. Now the two companies serve as joint CIO, in charge of digital construction and in charge of Internet drainage.

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