Chen Jingqiu: Three types of challenges for transformation of traditional enterprises towards Internet 2022-12-11

The transformation towards Internet is a fatal temptation for many traditional enterprises, as it may not only bring high-speed growth, but also bring subversive threats. In the process of transformation towards Internet, traditional enterprises may encounter three types of challenges.


Approaches and practices

From the traditional industry to the Internet field, it seems like just a change of tools, but the approaches and practices have changed dramatically. It is not enough for traditional enterprises to learn and explore by themselves. They need to vigorously introduce outstanding talents in the Internet field, promote the combination of Internet technology and business, and drive the transformation of corporate thinking. On the way of transformation towards Internet, enterprises need not only professional digital talents, but also to improve the data skill of ordinary workers, a general ability that will enable its owners to make use of EQ, IQ and professional expertise to obtain, manage, integrate, communicate, evaluate and create digital information.


Standards and codes

The Internet transformation of many traditional enterprises began with online business, which has exposed the problems of internal management of the enterprises. The most common problem is "three inconsistencies", namely the inconsistencies of inventory, service and marketing between online and offline. One process and one system must be followed from production, inventory, logistics to sales, so that the data standards can be kept unified in all parts and unified management and allocation of goods online and offline can be achieved, that is, "one inventory". Unifying the process and data standards means dismantling the "department wall", which is a trouble that many enterprises have encountered in the ERP era but have not solved yet. Based on unified process and data standards, enterprises can form effective information systems, accumulate internal and external data, and develop and use their own digital capabilities. Enterprises will form a central brain, not only to allocate resources and goods in a unified way, but also to guide decision-making in all parts based on big data analysis and algorithms. At this point, it is very important to extract core competencies (business+technology) to provide support for different business departments.


Culture and philosophy

For traditional enterprises, the Internet is not only a technological challenge, but also a cultural and philosophical challenge. The management and operation of traditional enterprises are more affected by economies of scale and division of labor. In this organizational management model, more stress is placed on the economic contract between enterprises and employees, and its cultural style is conservative and hierarchical, with more respect for authority. However, enterprises transforming towards the Internet need to conduct process management based on digital technology. Therefore, cross-departmental horizontal collaboration is more important than top-down command transmission.

In the Internet era, with the rapid changes of information technology and consumer demand, if the decision-making chain still relies on top-down transmission, business opportunities will be lost. The enterprise needs to hand over the decision-making right to the front-line cross-functional teams that can deal with things directly. Meanwhile, in order to encourage front-line employees to use their initiative, the relationship between enterprises and employees should be transformed into a relational contract. Under such an organizational model, cooperation and equality are more emphasized, and the cultural atmosphere is more open and shared.

To sum up, in the above three perspectives, culture and philosophy represents the superstructure of the enterprise, and will guide the approaches and practices, and standards and codes. The transformation of traditional enterprises towards Internet is a systematic project. Only when all levels from top-level design to operation & management are transformed can they truly embrace the Internet and become the trendsetters of the times.