(1) Overall and Partial
Businesses have diverse operations, and products have various lifecycle stages. Digitalization acts like a panacea, seamlessly integrating with different stages of various business operations or product lifecycles, resulting in a plethora of case studies. When pursuing digital transformation, should businesses adopt a comprehensive approach or a partial one?
From a competitive advantage perspective, the core competitive advantages of different companies are bound to differ. The choice between becoming big or strong is a fundamental one. Addressing the different stages of the product lifecycle is also a fundamental choice. Being overly ambitious and trying to be everything is unwise. For companies, the "barrel theory" applies: leverage their strengths or address their weaknesses – this is a sober understanding. However, in reality, it seems that the bigger a company aims, the more comprehensive it needs to be.
From an economic perspective, much like the 20/80 principle, carefully considering which business segments benefit from combining digitalization with a particular digital business to achieve the best cost-effectiveness and results is crucial. Over the years, we've seen numerous digital transformation projects, including many failures, and of course, some successes. I wonder if anyone has statistically analyzed the corresponding cost-effectiveness. We always tell success stories, but rarely about failures. However, I have a preliminary observation and conclusion: successful stories are not necessarily easy to replicate, while the lessons learned from failures may be more universal and have greater reference value and significance.
(2) Survival and Development
A soldier who doesn't want to be a general isn't a good soldier. This saying always evokes the ambition to become a general, but for a company, the first priority is to survive as a soldier. Whether it's a mindset of "let them eat cake" or a ridiculous notion, in today's market environment, rises and falls are commonplace and happen rapidly. Survival is the primary remedy, but this doesn't mean conservatism. Sustained survival is essentially continuous development; it's just a matter of different levels of development. Unrealistic and overly ambitious goals are ultimately meaningless.
Regarding survival and development, we can consider a key question: what would happen without digitalization? Would digitalization be icing on the cake or a lifeline? Although the mainstream narrative has always been about the lofty ideals of digitalization, for companies without strong internal capabilities, digitalization is probably not a lifeline.
Don't try to automate processes based on outdated technologies. This mainly means that if operations or production are carried out using outdated methods, they are highly arbitrary and cannot be standardized and transformed into an orderly and controllable automated process.
Don't implement IT on an outdated management foundation. In fact, the essence of management is no different from the concept of automation. The digital factory we're talking about is essentially about achieving automatic information flow (or data-driven processes) through continuous, standardized, and uninterrupted processes. Think about it carefully; it's essentially about automating management.
From another perspective, the company has always placed great importance on Yin Jian's production line. But frankly, digitalization is largely about the digital replication of a specific production process or business line, and the full utilization of digital advantages to enhance technology (such as a fundamental understanding of knowledge and mechanisms). Digitalization is, to a large extent, the construction of a "production line," primarily an information processing line, which naturally requires supporting components. These components are generally only available to companies that are thriving. The company has a deep understanding of the efficiency and effectiveness of its hardware production line, but by adhering to this approach, it can also correctly grasp the soft aspects of digitalization. In fact, a slight change in perspective is all it takes.
