How Digitalization Comes from Business and Returns to Business

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Those who have worked on enterprise digital transformation know that digitalization is fundamentally about the integration of technology and business. The real challenge lies in how to achieve this integration. Many advocate that digitalization must 'come from business and return to business,' but the question remains: how does it originate, and how does it return? Different perspectives lead to varied opinions. Today, Lao Yang will discuss this issue of digitalization's 'coming and going' from the perspective of the client side.

Unfortunately, most traditional enterprises today do not truly grasp the profound meaning of digital transformation. Many leaders still think in terms of IT operations, leading to cognitive biases and misguided approaches. They assume digitalization is solely the responsibility of the IT department, turning the concept of integration into 'from technology to technology.' As a result, the IT department often bears the blame for failed digital transformation initiatives. Therefore, before addressing the 'coming' aspect, the primary issue to resolve is the positioning of mindset: digital transformation is not a solo effort by any single department but requires collaborative specialization under an integrated mindset, guided by demand-driven principles. So, where does the demand come from? Naturally, not from the IT department but from the business side.

Once the 'coming' path is clarified and the demand side is identified, the next step is to determine what exactly is 'coming.' Currently, most traditional enterprises face the following issues on the business demand side:

Lack of deep understanding of digitalization within business departments. They assume the system will fulfill all their needs as if it were AI, leading to significant disappointment post-implementation and difficulties in system adoption.

Second, business departments do not know what they want, providing only a vague framework and leaving the IT department to figure it out on their own.

Third, business departments exhibit chaotic demand management, lacking the ability to plan and implement requirements systematically, as well as unified management capabilities, leading to frequent changes.

Fourth, business departments often aim for "big and comprehensive" solutions, wanting to implement everything at once.

From the above, it is clear that unclear or excessive requirements are not beneficial. Due to the inherent lack of digital technology expertise in business departments, the IT department must guide and clarify requirements based on vague business requests. They need to communicate with business departments to determine the scope and path for requirement implementation and reach a consensus. This stage is crucial for the IT department, as it involves transforming business requests into digital requirements. Poor transformation can hinder the next step of implementation.

Regarding the issue of "incoming" requirements, most companies currently face a serious problem: business departments operate independently, pursuing digital construction without involving the IT department. Why does this happen? Lao Yang analyzes as follows:

Business departments consider themselves highly professional and capable of handling everything, lacking basic understanding of digitalization;
IT departments lack sufficient influence;
Enterprises lack unified digital management systems and capabilities, and even when they exist, there's insufficient execution and inadequate supervision;
Business departments refuse IT department participation under the pretext of data confidentiality;
System implementation involves costs and some gray areas related to personal interests, as everyone understands.
Worries about the management authority being taken away;

On the surface, the 'go-it-alone' approach in business may seem like digitalization coming from and returning to the business. However, the issue lies in whether the positioning is accurate, the direction is correct, and the depth meets the standards. For more details, please refer to Lao Yang's recent article, Why I Oppose Business Departments Leading Digital Transformation Independently.

The above addresses the 'coming' aspect of digital transformation. It's clear that it stems from demands, which are based on work scenarios. Therefore, digital transformation must ultimately return to the scenarios that address business needs—that is, meeting the work scenario requirements of the business. This leads us to the 'going' aspect of implementation.

Typically, when business departments present their demands, after research and organization, a solution is formed, often manifested as a software system. Some believe this is the ultimate goal of digitalization—that introducing and launching a system completes the digital transformation. In reality, this is a narrow and mistaken view. Implementing a system is merely the first step in a long journey of corporate digital transformation, a milestone rather than the destination. It remains superficial, lacking any depth.

As a result, we often see traditional enterprises that have adopted digital systems but experienced no improvement in management. Instead, efficiency declines, and the system disrupts normal business operations. Business departments then criticize the system, sometimes vehemently, leading to another cycle of 'coming and going' in digital transformation—trapped in a vortex of repetitive construction.

While the direction of digitalization is toward business scenarios, its ultimate core must be 'value'. Although digitalization ultimately aims to achieve scenarios, much effort is often wasted when systems fail to deliver the expected impact. Therefore, digital systems require an ongoing process of construction and refinement within business scenarios, necessitating collaboration between technology and business teams. This includes regular review and optimization of business processes, as well as the implementation of digital operation safeguards. Enterprises must ensure that digitalization consistently aligns with the core of 'value' while deepening scenario applications, such as leveraging intelligent big data analysis to enhance management capabilities. Only by maintaining the correct direction in digital implementation, continuously deepening applications, and improving management efficiency to reduce costs and increase productivity, can digital transformation truly deliver value.

In summary, enterprise digital transformation must originate from and return to business scenarios, centered on value and grounded in integration:

Digitalization is not wishful thinking or the effort of a single department. It requires correct and deep understanding across the entire organization and a shift in mindset as the top priority.
The requirements for digital transformation must be based on business scenarios. IT and business departments must collaborate to refine and align on goals, ensuring the direction of 'coming and going' remains accurate and unswerving.

Thirdly, the arrival of digitalization in business scenarios does not signify the end but rather the beginning. It is essential to ensure the implementation of relevant scenarios, guarantee application effectiveness, and continuously refine and upgrade. This involves not only integrating various data but also understanding how to apply data effectively. Most critically, it requires enhancing digital operational capabilities. Therefore, the realization of digital value demands a long-term approach.