Company. Hotel. Digital transformation must be successful. There are six key points

Company. Hotel. Digital transformation must be successful. There are six key points

Original: Li Sheng

Why businesses should pay attention to digitalization

Why Business

Attention should be paid to issue of digitization

I want to clarify a few things

Company. Hotel. Digital transformation must be successful. There are six key points


What is digitization

In fact, digitization itself

It's not just a product or service you already own

Go online to sell or advertise


This is entire structural process of company

Create a new ecology in terms of business model

In this ecosystem

The company has fixed assets

Liquid assets and digital assets

They can be organically related

Create value for company together

Not just improving efficiency or changing marketing strategies


The connection between digitalization and business

What is relationship between digitalization and enterprises?

From a strategic point of view

Digitalization is closely related to business


Simply separate strategy into competitive strategy and corporate strategy


The impact of these two strategies is completely different

The so-called corporate strategy

How to choose direction or track


When a company makes diversified investments

Usually pat yourself on head or do some market research

Digitalization could completely change this practice

Choose a path through market digitization

Digitalization provides timely feedback and direction

This diversification logic makes more sense


Digitalization is a very good transformation tool for large enterprises

For some small businesses

He may not want to transform, or business itself is relatively simple

No cross-industry investment

Competitive strategy is more important to him

Competitive digitization strategy

This is actually a means of differentiation

Collect data using digitization

Can communicate with consumers

Adds a very strong stickiness

This kind of stickiness is hard to imitate

Is it true

Corporate strategy or competitive strategy

Digitalization has a good relationship with enterprises


Digitalization itself will create a new industry

Ignore corporate strategy or competitive aspects

Digitalization itself will create a new industry

We can often see

Many Internet companies have a front, middle and backstage

The role of middle office is very important

Many companies are relatively large in entire industry

Or an industry leader - it doesn't have to be big

But it could be segment leader

This type of business

Usually possible

With digitization, you can not only expand your capabilities

At same time, it can also create an intermediate platform for expansionopportunities across industry

In this case

All digitalization has become a new industry

In this new industry

The middle station will connect foreground and background, and cost-effectiveness is relatively high

Theoretically, this position is a structural hole

For companies or industries with structural holes

take a better position

This has also motivated many companies to venture into this new industry

This is different from corporate strategy and competitive strategy

However, this model is not suitable for all enterprises


Every business does it

This is also a waste of resources for entire industry

This should be industry-specific

Can industry associations play a coordinating role?


Good companies face need for digital transformation

The pressure of digital transformation is very high

The very companies that succeed in physical companies

Inside strategy

There is such a word as basic competitiveness trap


What does this mean


When you do a very good product and service


When you are very dangerous

Because what you do is so good

Therefore, some changes in industry can be overlooked


If industry changes once

Your original assets will then become liabilities


Your core competitiveness will become a trap

So, for these companies

I feel need for digital transformation

This transformation is subtle and not obvious

Give me an example

GE's digital transformation has been very successful in recent years

GE Company, 2018

Digital Platform Revenue Hits $1.2 Billion

Almost 50% annual growth


Traditional manufacturing company

Engineers play a major role


It is usually emphasized that life cycle of a product should be long

After product development

Better to sell for decades

Then minimize that unit cost

Profit will be higher


The logic of digital platforms contradicts this logic

Completely different

Digital platforms focus on user

Agile development

So-called agile development is what market wants and how it changes

Product should have fast iteration


These two logics completely contradict each other

GE Corporation

Take advantage of your core competitiveness

It takes a lot of courage

For small businesses

Those who want to scale up but have limited resources

Like county and city supermarkets, there were only five or six in past

Now he wants toget an increase from 1 to 10

It is possible to open 10, 20, 30 stores

In this case, digital transformation is also very important for him

For these companies

I suggest they find a professional consulting agency


Transformation and what I just said

There are fundamental differences in transformation of large enterprises

How companies should digitalize


Problem related to survival of enterprise


Transformation is actually a strategic response


It's really a question of company's survival, primarily from a people's point of view


The mental model of a CEO or chairman must believe in digitization


This is a long process

This is a dynamic process

This is a gradual process

Get ready for a long fight

It's never too late


The characteristics of each enterprise are different

The path of our own digital transformation is also different

Enterprises should be based on their own characteristics


A strategic system adapted to its own digital transformation

-Enterprise Digital Transformation Community

I recently did some research

Published in journals such as Harvard Business Review

My research shows

Although businesses vary greatly

But there is something in common

Summing up, we note a few important points


The ultimate goal of all digital transformation

Don't try to get result


An ordered system or a process of continuous transformation

This is not a static result

This is a dynamic process

In this process, we must constantly adapt to environment

The second paragraph is same as first paragraph

Although transformation is a long process

But it's also a continuous feedback process

In fact, this is biggest benefit of digital transformation


I always think strategic planning takes three to five years

But digital transformation is different

It's accessible and timely

You can continue to improve based on feedback on this data

That's why he doesn't have a fixed concept of time


I'm in process of researching

It also lists weaknesses of digital transformation of some enterprises

I have found that many businesses are in process of digital transformation

Imbalance between long-term strategic goals andshort-term interests

Because in long run

Businesses can follow trends of global digital transformation

Explore new revenue opportunities

But in short term

It also requires a lot of capital investment and uncertainty

This creates

Imbalance between long-term goals and short-term interests

Company. Hotel. Digital transformation must be successful. There are six key points


These are strategic and executive levels

Consensus on digital transformation is essential

Person in charge of certain businesses

There may be time limits in this process


Creating mismatches between strategic and executive levels

The third one makes decisions

This is a mismatch between top-level design and technical level

These three points are incompatible

Creating a gap between strategy and real transformation

2. How businesses should drive digital transformation


You need to contact middle management

Even lower level leadership is involved in developing this vision

Must allow

Everyone understands why

Develop very clear goals


Strategic guidance needed

You need

Knowing digital technologies is very important

But digital technologies

The essence is a means to achieve strategic goals

Many businesses

The application of digital technologies should be separated from technical level

The value of technology

Assigned to entire application layer if it cannot be applied

Then no matter how good this technology is, it is useless

Therefore, companies need to develop a clear digital strategy

Digital must be integrated

Combination of corporate culture and leadership

Ensure that digital technologies can play their proper role


Think strategically about some of challenges you face


Changing organizational structure

Many traditional businesses are vertical structures

There are many levels and chain is very long, and horizontal coordination is not smooth

Difficult to match flexibility of digital transformation

Therefore, whole structure must be changed

Second, change collaboration

The GE company mentioned above did a better job

Former GE CEO Jeff Immelt said

Difficulties in moving to an IoT platform

This is not caused by technology

Because General Electric has deep technical knowledge

And creatively proposed some digital completion concepts

But GE

Failed to establish a collaborative relationship between digital department and traditional department

Employees of traditional departments

focus more on original business

Become a resistance to promote change

So, in this case

Decision of organizationalproblems - re-communication

And establish a clear and understandable incentive mechanism

IT and business

There are many solutions to problem of cooperation between departments

For example

Create an independent digital department or project

Team trains several translators

Be link between business and IT

University of Chicago

Professor Bolt has a very good word "broker"


Be able to imagine this market situation

Speak to technician in a language they understand

Or install advanced technology

Speak to market development staff in a language they understand


When organizational structure matches talent

There should be such a cross margin

You must also have a very fine business sense

Deep understanding of business

If enterprise resources are limited

I can't hire such a person

You can compensate for this with a variety of commands

Digital transformation makes it easier to find direction

I would like to introduce

Relatively new organizational structure Dual organization

It's called in English

Both hands

This is business

Strategic research in progress

Two different logics of thought are required

One of them is called an exploit

How to get most out of my resources

The second is to explore new unknowns

Like a business

You must do both at same time

But these two things contradict each other

Currently, we need to create such a double organization

Like GE

The Chief Data Officer of CDO was created at HQ from start

and was hired directly by CEO

He is different from chief information officer (CIO)

These are two different positions


The CEO is more customer focused

CIO is responsible for implementing company's internal IT structure

CDO is responsible for data

GE data and GE headquarters are two relatively independent entities

Different regions, cultures, organizational structures, processes, etc.

This is a binary organization

Completely separate

At same time, various GE business segments

We created our own CDO

Simultaneously report to CEO of business and Headquarters CIO

When they run into problems

Headquarters CEO

CDO and CEO will communicate in private meetings

CDO of each module

He is not recruited by HQ Human Resources or Business Unit

Instead, CIOs are recruited to head officetechnologies

GE installs

This organization also sets rules for rewards

Here's how GE data generates revenue

If it's related to a traditional business

Then it will be registered as a traditional business and a GE data business

Remember twice

That's why everyone is motivated to do it

His dual organization and motivation system match perfectly

What to do if small business resources are not enough

In fact, there are many different dualities

GE is what we call organizational duality

If there are not enough resources

This can do a time range transformation

This is binary time differentiation

For example, 80% of time this year

Concentrate energy and resources on traditional business

20% off new business

Then next year it can be adjusted up to 60%

40%, one year after nextadjust to 40%, 60%

This is second organizational structure I mentioned


Environmental aspects

The digital environment is very different

On one hand, because macroeconomics has undergone very profound changes

The emergence of a new generation of consumers

As a result, customer needs have changed a lot

Rapid iteration of customer needs is a challenge

I share

A case of unmanned convenience store failure

At time, company was investing heavily, including in cameras

Algorithms and whole digital transformation process

but for clients

Lack of understanding of changes in demand

Main unmanned goods store

Competitors are traditional convenience stores

For example

seven eleven and whole family

This offline store is right across from Seven Eleven

But result

This store isn't even seven eleven


The market is not supposed to be very important to consumers

50% of sales of many convenience stores come from hot food

Hot food is a very powerful drainer

The other 50% is what consumers will go for other things after they come to store

But there is no hot food in self-driving convenience stores

It's real

No information about consumer changes

Therefore, he has no way to drain water

After hot food is placed

This is not an offline store


Understanding consumers is a very important point in process of digital transformation

On an environmental level, we must learn from McDonald's

Create a client center

McDonald's is very responsive to changes in consumer tastes

The fifth level of resource

The study also revealed

Many times

Own enterprise infrastructurecannot meet requirements of digital transformation


Mismatch between short-term gain and long-term investment

What leads to unsustainable funding

Here I mainly want to talk

Financial capital and investment in research and development

Let's go back to self-driving convenience store example

Founder invested heavily

But then

I feel like I shouldn't vote so much

In terms of investment in technology

I think

Some technologies don't have to vote for best technology at first

Because market is changing

You can play less at first

Improve technology by constantly testing market

And find out if this technology is suitable or not


This is digital transformation of many businesses

A lot of data is collected

But collecting data alone is useless


Combining physical and administrative data becomes a challenge


Many IT departments still have a traditional mindset

No communication with business department, product does not meet requirements

Requires integration with marketing department

Besides recruiting

On other side

You can also set up some mechanisms for more convenient communication

There are several aspects here

First, it is synergy of value

Enterprises must open up access to data. Don't let data become an isolated island

If data becomes an island

It's pointless

Only through close cooperation of different departments

To identify your own strengths in digital transformation process

Midea has done a very good job of digital transformation

It is based on concept of user demand

Implementation of a collaboration model with a full value chain "T+3"

By combining data algorithms

Create an intelligent decision-making system based on data

Conforms to Midea system standards

Make original

Relatively fragmented departments have been linked through a digital platform

This is more accurate for consumers

Detailed data will be higher

The fourth one is data store

This is how you want to pass algorithm

Create more value with numbers

Because data itself serves as a strategy

You need

Understanding customers with data

Or how customer behavior will affect company

Hey Tea is a good example

It collects a lot of data while running

This completes gender of consumer

A collection of professional hobbies to get exact user


This is actually a very powerful data processing company

Walks past profile

(Profile) Single Source

Analysis of DVD rental consumer data

Finally, make a film according to consumer preferences


Consumers love romantic dramas with Asian themes

Just make this video

That's why almost every movie made by Netflix is ​​a hit

Last - employee level

Employees have a very big conflict with digital transformation

Many employees do not want digital transformation

On one hand, some employees may be older

Can't accept new

On other hand, it may be contrary to his personal interests

Due to digitization

The transformation should make entire business model more transparent

It can

Moved some cheese for some employees

In this case, companies should pay attention to two points

First, grow with your employees

like Disney

Provide a good digital learning platform according to needs of employees

You can allow employees to participate together

Not just a performer

The second one leads transformation

The CEO must be personally involved in digital transformation process

Help team

To understand if their actions are in line with your strategic plan


An enterprise CIO is sometimes more like an audition director

Listen to new ideas, listen to employees' ideas


All voices to transform

The above shows how I perform the transformation

Including some personal views on lightning protection