2021 Digital Transformation of Chinese EnterprisesSource:iResearch
April 21,20212:36 PMOverview
Digitalization and Digital Transformation
From collection to application, digital value and commercial value are combined
Being reproducible, transferable, and computable, digitalization has been widely discussed in recent years. Digitalization includes data collection, transmission, storage, calculation and application. It turns all kinds of complex and changeable information into measurable data and processes it. In digital transformation, enterprises use new digital technologies to link physical information of a certain production or operation link, or even the whole business process, to form valuable digital assets. Then the company can use the calculated information to improve its business value. Nowadays, enterprises use digital technologies and tools to promote enterprise transformation, adding digital value to their commercial value to enhance their competitiveness.
Problem 1：Prefer Comprehensive Products with Unnecessary Functions
Functions that are not used are not needed.
During digital transformation, when purchasing software and hardware, a lot of enterprises would buy those with comprehensive functions, which is unnecessary. iResearch believes that the reasons include contradictions of employees at different levels, lack of scientific investigation, consumer psychology and the pursuit of digital advertising effect, etc. According to the statistics of a foreign institution, 60% of functions of the enterprise-level software haven’t been used or have been used very seldom on average. The enterprises buy software by intuition, thinking such software might be useful and it will be better if they have it. However, this not only results in a longer implementation cycle of pre-projects and higher costs but also more complicated application processes and more mistakes, which causes a lot of inconvenience to employees and has a negative influence on the transformation effect.
Problem 2: Stick to the Old Methods
The IT department doesn’t get enough attention or resources
IT department in an enterprise is usually the executor of digital transformation. Since the enterprise digitalization trend in China has become increasingly clear, both the market and corporate managers have high expectations for the digitalization result delivered by the IT department. The IT department is now under more pressure and has more work. The functions and assessment of the IT department are more and more like the business departments. However, the IT department has been regarded as a logistics department in many non-network technology enterprises, and only plays a minor role in the enterprise strategic layout. Its resource demand and coordination demand in daily work don’t get enough attention. and if the company is facing operation difficulties, its IT department is usually among the first ones to be reduced. Sticking to old methods and not paying enough attention to the strategic position of the IT department limits the functions of the IT department, which reduces the opportunity for enterprises to integrate into the digital age.
The essence of enterprise digital transformation: The essence of digital transformation is to use the advantages of digital "copy, link, simulation, and feedback" to help an enterprise achieve transformation and upgrading. Transformation is the goal, not digitization. Therefore, an enterprise's digital transformation layout needs to start from the core goals of the enterprise, such as cost reduction, revenue and efficiency improvement, to select the right type, organize and implement
Main problems in Enterprise digital transformation: Through field research, iResearch finds out that the failure of Chinese enterprises’ digital transformation currently is mainly caused by two factors. The first factor is that some companies only focus on results. While they hope all problems can be solved by digital transformation, they simplified the links such as self-insight in early stage, product type selection, and implementation plan. The second factor is that some companies think Digital transformation is too “complicated”. Therefore, they are reluctant to try.
Recommended path for enterprise digital transformation: Recommended path for enterprise digital transformation：Digital transformation is now implemented everywhere. More and more SMEs, local companies and traditional companies are carrying out digital transformation. The former comprehensive transformation path represented by Internet companies is not applicable to these companies. iResearch thinks that enterprises can start from some links (especially from digital marketing), which can build confidence in the company. Then gradually push the digital transformation to the whole company, driving the implementation of digital transformation by demand to enhance success rate.
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