36Kr Enterprise Server Review Expert Group——Dai Ke

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What is the hottest thing now? Apart from the weather, there is no other solution other than digital transformation.

It is not difficult to see from the current momentum that the media, business, IT, Internet, consulting industry, management experts, and government agencies have joined forces to turn digital transformation into an enterprise upgrade. movement.

But strangely, the voices of the protagonists in this movement, namely companies or customers, are rarely heard. And it’s no wonder, because explanations of digital transformation sound like blind men trying to figure out the elephant.

The saying on the Internet is: the so-called digital transformation is a high-level transformation based on digital transformation and digital upgrading, further touching the company's core business, and aiming to create a new business model.

This definition is lofty enough, but it is difficult to connect with business operations. Although various experts have given various concepts and frameworks for digital transformation, in fact, these are only logical explanations and do not have much practical significance.

Back to the enterprise perspective: How many domestic enterprises meet this transformation condition? How many companies are willing to transfer? More importantly, the high cost of transformation can be seen, but the results are full of unknowns.

The biggest difference between theorists and entrepreneurs is that one is good at logical construction, while the other focuses on business reality.

Over-interpretation and overestimation of transformation can easily lead to greater information asymmetry. Although the IT industry has become accustomed to profiting from information asymmetry, digital transformation is not easily accepted by enterprises because it is difficult to understand and cannot be verified.

In addition, there is still a considerable cognitive gap between leaders and enterprises on digital transformation, both in direction and depth.

To say this is not to deny digital transformation, but to say that we must first clarify what is the purpose of digital transformation? Is it necessary to transfer?

First of all, digital transformation is not a new concept. In fact, some industries have already begun full digitalization ten or even twenty years ago. For example, finance, insurance, telecommunications and other industries, because these industries themselves must rely on digital operations.

So, why is digital transformation being mentioned again? I think it is mainly the business development needs in the commercial field, such as new retail, e-commerce, etc.

Some people must disagree with this statement, because non-commercial industries such as manufacturing and manufacturing are also undergoing digital transformation. However, if you analyze carefully, you will find that the degree of digital transformation in these industries is limited; it can only be regarded as partial digital transformation and is far from meeting the framework of transformation experts. Even companies themselves may not think that this is digital transformation.

In fact, whether or not to transform and how big the transformation will be are all determined by the business model or business method; in other words, there is no unified standard for digital transformation.

From the business perspective of the enterprise, we find the general rules of digital transformation.

Generally speaking, enterprise business can be divided into internal business and external business. External businesses mainly include channels, marketing, sales, customer experience and services, etc. Internal business may include more content, such as organization, process, procurement, finance, manufacturing, inventory, planning, support, etc.

According to the advice of digital transformation experts, both internal and external businesses should be digitized, otherwise digital islands will easily form. Only when all internal and external businesses are digitized can an enterprise become a truly digital enterprise.

In fact, this is not only difficult to achieve, but also a comprehensive digital transformation is not necessary.

Judging from the digital reality of domestic enterprises, external digital transformation usually starts first, and digitalization is also more thorough. More importantly, this kind of digital transformation is self-initiated by enterprises, rather than coerced by external voices.

This is completely contrary to the understanding of mainstream business management experts: that is, corporate strategy and management execution are from the inside out, and focus on internal construction. This is indeed what previous IT strategies did.

However, management guru Drucker also has a famous management saying, that is: the performance of an organization must occur outside the organization. Understood in this way, it is reasonable to prioritize the digital transformation of external businesses.

Just imagine, if there is no strong support for external businesses such as customers, channels, marketing and services, the company will not be able to generate sufficient revenue and create value.

For domestic small and medium-sized enterprises, survival problems must be solved through external business and transactions. So we will see that most domestic digital transformation starts from external business.

In the ToB field, we see an interesting phenomenon, that is, there are so many M (Management), why is only CRM more easily accepted by enterprises?

The main reason is that CRM is a business that is completely oriented to the company's external business and is easy to digitize. This is not to say that CRM is the best representative of digital transformation, it is just that the business position is more favorable.

Whether in the commercial field or other industries, several business priorities related to CRM are important driving factors for digital transformation.

First of all, organizations can use digital technology and data to reach customers who have been ignored by traditional methods in a low-cost way, that is, digitalization solves the problem of customer touch points.

Undoubtedly, this can achieve higher sales by increasing customer contact opportunities; for this, I think no company will refuse.

Secondly, the 4Ps of traditional marketing are imprecise because they are difficult to quantify and measure, thus wasting resources. In comparison, digital marketing is more targeted and personalized, and can give customers a better experience.

Finally, digital technology is changing the way companies interact and serve their customers. For example, for simple customer problems, robots and knowledge bases supported by AI and machine learning can be used to allow customers to quickly solve their problems without manual support. For more advanced problems, the knowledge base can be used in conjunction with manual methods to achieve rapid response.

These digital businesses can optimize customer experience.

It can also be seen from the above business priorities that digitalization and transformation are actually two things, and their impact on enterprises has different meanings.

Digitalization is easy to understand, but transformation includes various transformations such as product transformation, business transformation, operation transformation and service transformation to achieve business innovation and optimization.

There are now many more instigators of transformation than companies that want to transform. No matter who I met, they all urged people to undergo digital transformation; and they also came up with various transformation plans that seemed logical and reasonable.

Transformation is profit-driven for enterprises, and it is also driven by transformation agitators. After all, in the name of transformation, large enterprises will have high budget expectations; small and medium-sized enterprises may also sell something.

However, companies are not easily fooled. Especially in an economic downturn, any investment must consider returns, not to mention the huge investment in large-scale transformation. Even if companies are willing to try, there is still a question of whether they can afford it or not.

Because comprehensive digital transformation is difficult, many companies have turned digital transformation into individual projects. In fact, this can only be said to have achieved digitization in form, but the appearance may not necessarily be the same in spirit, and digitization does not mean that the business has transformed. In most cases, the results of such projects have nothing to do with digital transformation.

A common rhetoric for digital transformation is: reducing costs, increasing efficiency, and empowering enterprises. This kind of talk doesn’t sound nutritious, and companies may not believe it because no one can prove it.

In view of the high risks and difficulties of complete digital transformation, SaaS is a meaningful attempt in the early stages of enterprise digital transformation.

First of all, most SaaS provides services for the company's external digital business, so it will be helpful to increase revenue.

Finally, compared to systematic digital transformation, the verification cost of SaaS is lower. If it is suitable, use it, and if it is not, discard it.

Using SaaS to achieve digital transformation of enterprises, there is no need to play cat-and-mouse games with customers.

If you treat enterprise digital transformation as a serious matter, you may be on the right path to transformation.

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Original title: "Dai Ke: The Myth of Digital Transformation and the Opportunities of SaaS"

Author: Dai Ke

This article comes from 36Kr Enterprise Service Comments