01. What is "digitalization," and how does it differ from "IT"?
When people talk about digital transformation, they always mention the difference between "digitalization" and "IT." One simple difference is that "digitalization" is an adjective, while "IT" is a noun.
My understanding of IT (Information Technology) is "business process streamlining and process datafication".
The process of using IT technology to enable the flow of business processes such as production, procurement, sales, customer service, transaction processing, and cash flow in the information world, and to record relevant business data.
Its key feature is that it drives business processes.
My understanding of "digitalization" is "business digitalization and data businessization".
First, IT will be more broadly embedded into the enterprise's various businesses, products, services, and related delivery channels.
Second, maximize the use of data accumulated over a long period of time to fully unleash its value. Through data, identify problems, patterns, and business opportunities; optimize business portfolios, processes, and operating models to achieve sustainable operation, innovation, and development for the enterprise.
The key point to emphasize is data-driven business.
02. Is "digitalization" a completely new technology or an extension of "IT"?
Discussions about "digital technology" always seem to return to IT. Clearly, digitalization is "related to IT."
Some professionals believe that digitalization is an extension of information technology and "important IT," but I'd like to know what constitutes unimportant IT?
My understanding is that digitalization is an inevitable product of the advanced stage of information technology development. This so-called "advanced stage" doesn't focus on whether certain intrinsic qualities of IT technology are more advanced, but rather on how enterprises use these technologies. As discussed in the previous article, a digital strategy is about the "strategic" use of IT and data. Please refer to "Enterprise Digital Transformation: Digital Transformation Strategy!"
We are now talking about digital transformation, which means that we did not previously have a "strategic use of IT and data".
When enterprises strategically apply IT to all aspects of their operations and production activities, and when these applications become sufficiently in-depth, the enterprises will gradually evolve from information-based enterprises to digital enterprises. In this evolutionary process, as the application of IT deepens, these technologies will also undergo continuous internal evolution. For example, the evolution of IT architecture has gone through stages such as monolithic architecture, SOA architecture, microservice architecture, and cloud-native architecture.
Therefore, there is no clear boundary between informatization and digitalization at the technical level.
The so-called "digital technology" must also be "information technology" that is widely used, keeps pace with the times, and has a greater impact on business operations.
03. Does using the latest technology guarantee a successful transformation?
Technology will continue to evolve as its applications deepen, and advanced technologies are driving the digital transformation of various industries.
However, digital transformation is not the same as technological transformation. Even if the latest digital technologies are used, it does not mean that digital transformation has been achieved.
Digital technology is not a magic pill that can make anyone "ascend to immortality." It's more like a powerful sword; its effectiveness depends on the user. A skilled martial artist can wield it with unparalleled power, while an ordinary person can only use it for basic tasks like cooking and chopping vegetables.
The "martial arts masters" here must be individuals and companies with a high level of understanding of digitalization and who continuously improve their "IT" application capabilities and technical skills in the course of business.
However, the title of "martial arts master" is not the exclusive domain of any one person or company.
For individuals, you need to continuously learn and improve your digital awareness and technical skills. Sooner or later, you too can become a highly skilled professional digital talent.
For businesses, you need to elevate "IT" to a strategic level, using a digital perspective to identify pain points, blind spots, and bottlenecks in your operations. Then, optimize and improve step by step. Each optimization and improvement is a "micro-innovation" for the company. As these "micro-innovations" accumulate and increase, quantitative changes will lead to qualitative changes, and the company's digital transformation will be complete!
04. Taking stock of the digital technologies driving enterprise transformation
Technological upgrades are not the same as digital transformation. However, discussing digital transformation without digital technologies is also impossible. Next, we will review the digital technologies that enterprises may use in their digital transformation. The following are my personal thoughts; any shortcomings are welcome to be pointed out, corrected, and supplemented by experts. I look forward to seeing your understanding in the comments section.
1. Website (web technology)
Someone will definitely ask: What? This is also called digital technology? This thing is too "old".
Indeed, from a technical point of view, websites were one of the earliest forms of information technology. For the first two years of my career, I was also involved in website development (back then, my MSN signature was "Build your own website and let others develop the software!" Haha, I'll tell you about this experience later if I have the chance).
Although web technology is old, it remains one of the most common ways people access the internet today. It not only provides us with a wide range of information but has also gradually become the best way for us to communicate and connect with customers. Whether it's traditional information portals and e-commerce websites, or today's Kuaishou and Douyin, they are all essentially websites or deeper applications of websites.
Currently, some leading companies in various industries are trying to build horizontal or vertical websites to aggregate ecosystems and connect customers, thereby promoting the digital transformation of their businesses.
2. Smartphone
If we were to name the thing that has had the most profound impact on our lives over the past decade or so, it would undoubtedly be the smartphone.
Smartphones have become an extension of our bodies, changing not only our lifestyles of shopping, traveling, taking photos, reading, and playing games, but also showing us a bigger world.
From a technical perspective, a smartphone is a complex that integrates various digital technologies such as communication technology, imaging technology, image processing technology, and intelligent voice technology.
In the process of digital technology development, smartphones, as the carrier, will play an increasingly important role in the digital transformation of enterprises, and enterprises should make good use of them.
3. Big Data Technology
If the "informatization" stage is about accumulating data, then the "digitalization" stage is definitely about applying data. Data is considered the "new oil" and "new currency" of the digital age because it contains enormous commercial value.
The reason why big data is "big" is not only because of the large amount of data it can store, but more importantly because of its strong ability to analyze and mine large volumes and diverse types of data.
Intelligent analytics based on big data can help companies extract value from the "treasure trove of data," reshape their business decision-making models, and help them achieve digital transformation.
4. Cloud computing technology
Cloud computing distributes computing tasks across a shared resource pool of a large number of computers, enabling various application systems to obtain computing power, storage space, and various software services as needed.
Cloud computing, carrying big data, is key to enterprises' digital transformation, providing computing power support for their digital transformation. IaaS, PaaS, SaaS, DaaS... cloud computing technology is gradually changing the digital application environment of enterprises.
5. Internet of Things (IoT) technology
The Internet of Things (IoT), as the name suggests, means "everything can be connected to the network." Through information sensing devices and according to agreed protocols, any object can be connected to the network. Objects can exchange and communicate information through information transmission media to achieve functions such as intelligent identification, positioning, tracking, and monitoring.
Today, IoT technology is indispensable in digital application scenarios such as smart furniture, smart cars, smart healthcare, smart manufacturing, smart agriculture, and smart transportation.
The Internet of Things (IoT) drives data intelligence by connecting everything, connecting data silos, and empowering enterprises' digital transformation.
6. Artificial intelligence technology
Artificial intelligence technology mainly comprises three levels:
The first is perception, computer vision and image processing, which equips computers with "eyes" so that they can understand images just like humans, recognize and classify image data, and enable computers to perceive their surrounding environment.
The second is understanding, natural language processing, and human-computer dialogue, which enables computers to have the ability to have voice conversations with humans.
The third is action, specifically machine learning. Based on massive amounts of data, machine learning algorithms are trained and optimized, enabling computers to help people make decisions. Voice assistants, RPA, and COR are typical applications of artificial intelligence in enterprise transformation.
In the future, artificial intelligence will play an increasingly important role in the digital transformation of enterprises.
7. 5G network technology
5G networks are a new generation of wireless network systems with high bandwidth, high capacity, low latency, and high security. They provide better, smarter, faster, and more stable network support for more smart devices to connect, making our digital world richer.
Making good use of 5G networks can promote the comprehensive development of the Internet of Things, expand the application boundaries of artificial intelligence, drive the development of the industrial Internet, and empower enterprises' digital transformation.
8. Blockchain technology
Blockchain technology is a data storage architecture that distributes people's transaction records (also known as blocks) across various records (called "chains") in a peer-to-peer connected system.
This type of storage is typically referred to as a "distributed digital ledger," and it features characteristics such as "unforgeable," "fully traceable," "traceable," "transparent," and "collectively maintained." Each transaction in this ledger is authenticated by the holder's digital signature, thereby verifying the transaction and protecting it from corruption.
Therefore, the data contained in digital ledgers is highly secure. Blockchain's connectivity, security, and smart contracts make digital transactions more secure for businesses, helping them build digital ecosystems.
9. Digital twin technology
A digital twin is a digital mirror image of an object in the physical world. The essence of this "mirror image" is a digital model that uses sensors to continuously acquire data about the real object and evolves, matures, and even ages along with it.
It is evident that digital twin technology is a multidisciplinary technology integrating data modeling, IoT technology, and digital simulation. Currently, digital twin technology is mainly in the theoretical research and application exploration stage, and has not yet achieved large-scale application.
Experts predict that digital twin technology will be a core technology for enterprise digital transformation, bringing significant impacts and changes to fields such as product design, intelligent manufacturing, medical analysis, and engineering construction.
10. Robotics Technology
In enterprise digital transformation, the application of digital robot technology is more classic and common. In manufacturing enterprises, many robotic devices can be found, which replace or assist people in completing various heavy, tedious, dangerous, toxic, and harmful tasks.
Besides the manufacturing industry, robots are also widely used in resource exploration, energy development, disaster relief and risk mitigation, logistics services, aerospace and other fields.
Technicians are also researching micro-nanorobots that can be inserted into the human body for medical research and measurement.
Final words
1. The key to enterprise digital transformation is "transformation," which emphasizes the "strategic" use of "IT," rather than simply upgrading or improving IT systems.
2. Do not treat digital technology as a tool for disruptive innovation. No company has ever successfully transformed itself by relying on new technologies and tools.
3. For traditional enterprises, the most important thing is to catch up on the "information technology" gap as soon as possible, and they can try to make some "micro-innovations" based on existing technologies. A major transformation comes from the accumulation of multiple "micro-innovations".
4. There is no such thing as a "one-step" digital transformation technology and tool; if someone claims to, they are most likely a fraud.
5. In enterprise digital transformation, there is no best technology, only technology used well or poorly. Don't be held hostage by technology.
