A digital transformation ‘use case’ everyone can learn from

Huawei Technologies, for instance, continues to reach its highest revenue year after year because they let their data continuously and consistently transform their business. Its leadership is constantly changing their business models by gaining better insights from data. Their data allows them to focus on their customers and their partners and let the rest fall into place.c

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Digital transformation is neither a buzzword nor an ugly trend. It is a societal phenomenon that affects our private life as well as our professional life. The introduction of new technologies and the emergence of new uses have changed our world from a cultural, structural and organizational point of view.

How does this translate into the professional world? New technologies, such as cloud, IoT, big data, virtual reality, 3D printing, mobility, etc., are gradually integrating companies. Apart from the use of these new tools, the convergence of the digital world and professional world lead companies to work on several points: digitalization, communication and sharing, internationalization, competitiveness/competition and collaboration.

By definition (according to Wikipedia), digital transformation is “the use of digital technology to solve traditional problems.” These digital solutions provide new types of creativity and innovation instead of simply enhancing and supporting traditional methods.

With the digital revolution, businesses are seeing new competitors and new customer requirements. They must, more than ever, work on their strategic transformation issues for them to remain competitive.

For some businesses, the digital transformation is at the beginning of a transformation of the customers, their uses, their behaviors, their habits, and their expectations. Businesses must adapt to this digital transformation if they want to stay relevant.

Digital transformation will force companies to move from a self-centered and product-oriented operation (they hire marketers and salespersons to sell what is produced) to a customer-driven operation - their needs and expectations.

Digital transformation is, therefore, a tool and not a goal. The goal is not digital transformation but to adapt to changes and transformation of ideas and practices.

Beyond the equipment in customer relationship management (CRM), dematerialized services, software, management tools, messaging services, social networks or marketing software, companies must now prepare for the human-machine collaboration. Big data, artificial intelligence, machine learning, Internet of Things and mixed reality are the future of the business environment.

Consequently, the digital transformation of a company is linked to technologies, which are also deployed in the processes to adapt best to the uses. A good digital strategy of any company is to observe its customers and see how to meet their needs and create tools to engage them.

Therefore, the more a company wants to have a competitive advantage in this new economy, the more its tools should be of high technological value and "customer-centric."

Digital transition and change management

There is no doubt that digital transformation impacts the operation of a company. The technological changes of a company cannot be successful without the active participation of all the employees/human resources.

From the tools and interactions with its ecosystem, everything must be redesigned so that each employee can use the features without any hassle. Therefore, all employees must be involved and carried along in this strategic shift.

General management and HR’s role are to communicate the reasons for this choice, its consistency with the corporate culture and the progress of this change. IT will encourage the use of new tools by demonstrating their benefits. Managers will transform themselves into change coaches. Employees become ambassadors for the digitization project.

This encourages a clear communication on the impacts and benefits of the transition; and significant involvement of the leaders, who will have to unite the employees around a common vision.

Collaboration, key to the success of digital transformation in business

Above all, digital transformation impacts on the traditional organization of work. Technologies eliminate spatial and temporal barriers, connectivity allows collaborative work (anywhere, anytime, any device), new "devices" (digital objects) make it possible to unify physical working tools with digital working tools, and finally, the universality of the internet places the human resource in a global framework.

The role of the manager as a change leader is central. The team leader exemplifies the change: he must, therefore, motivate and support his employees. A communicative, adaptive and educational approach guarantees successful support.

However, the arrival of digital transformation is shaking up established cultural strategies. Lack of technological know-how or the fear of change is palpable and perfectly understandable challenges.

To maximize the flexibility offered by digitalization and facilitate decision-making within a company, transparency and information sharing must be encouraged by all employees.

The digital transformation of a company thus requires the modernization of internal practices. That will lead to easier decision-making and a significant reduction in the time spent on secondary tasks in the company. A profound change in organization and ideas must take place so that the company can take advantage of the enormous and diverse benefits offered by digital transformation. The keywords are responsiveness and adaptability. If this digital transformation "mindset" revolution takes place in a company, they will begin to see and feel the impact on productivity almost immediately.

Digital transformation: The Huawei case study

Huawei hardly talked about its business operations and transformation by themselves. Over the past 30 years, Huawei has experienced tremendous growth, but only a few know about how the company thoroughly committed to the principles of digital transformation.

This commitment stretched through numerous phases. By the year 2016, the company focused fully on improving enterprise efficiency via transformation. Simultaneously, amidst fast growth, the company also considered shifting from a centralized governance model to a demand-driven supply model. This model allows organizations at the forefront of the company to have more authority and responsibilities. While effecting these changes, Huawei continues to follow the ROAD experience-driven philosophy, which is to:

  • Improve internal efficiency and productivity
  • make transactions between customers, partners and Huawei more convenient and safer
  • improve customer satisfaction

In recent times, Huawei’s business and IT expansion were implemented by focusing on three guiding principles:

  1. To improve user experience
  2. To increase business operating efficiency
  3. To build a lightweight IT architecture

As such, Huawei has explored many options in the company’s widely varying business domains — ranging from R&D to sales and delivery — and achieved remarkable and successful results.

Huawei’s goal of digital transformation: To promote enterprise development and support efficient business operations

Huawei is one of the world’s best examples of the power of digital transformation. The company is a global enterprise. In 2016, its sales revenue reached all-time highs of USD 78.6 billion, ranking No. 83 in the Fortune Global 500. In partnership with telecom carriers, Huawei has built over 1,500 networks, helping over one-third of the world’s population connect to the Internet, and Huawei sells hundreds of millions of mobile phones every year. The company operates in more than 170 countries and regions around the world, with a total workforce of approximately 180,000 employees. Huawei has more than 900 branches around the globe, 15 R&D centers, 36 joint innovation centers, and millions of partners, as well as more than 60,000 suppliers.

For the past 30 years, Huawei has continued to implement business transformation, as well as process and IT implementation. These efforts have paid off several times.

There is a lot of conversation about the future of intelligent systems, which pose new challenges for IT planning. Similar to any enterprise, Huawei is asking what goals they should strive for in business and IT transformation. Huawei believes that migration to the cloud and service-oriented operations are only means to achieve goals. The actual goal of transformation is to ensure internal and external compliance, promote business development and support the company’s efficient operations. To put it simply, the goal is to generate more revenue and profits while improving capabilities and efficiency. Certainly, this goal applies to the digital transformation of all enterprises.

What role do IT and other technology play in this transformation? What is the relationship between technology and business? Huawei, as a company, believes that technologies must support the business goals and drive of the company, and enable business transformation. In the long run, business is the key driving force of transformation.

Transformation strategy: IT architecture requires 3 major changes

To support business transformation in effective and versatile ways, IT architecture requires three changes.

  1. From traditional siloed and closed to a cloud-based and service-oriented open architecture: The primary reason for upgrading the traditional closed IT architecture to an open one is for rapid response to business needs.
  2. From focusing on internal process operations to focusing on ROADS user experience: seeks to answer the question: What problems do I really need to address for the business groups I serve?
  3. From a system that serves internal management to a real-time service system that is connected to users: As Huawei CEO Ren Zhengfei puts it, all transformations and IT constructions must be aligned with business needs to make business operations easier, faster, and more efficient.

Huawei’s business transformation practices: Following a ROADS experience-driven philosophy to improve efficiency, productivity and customer satisfaction

Prior to their latest transformation plan, Huawei explored many IT upgrades for departments that included R&D, manufacturing, sales, delivery, and logistics. These explorations produced great results, as the following examples show.

Migrating R&D to the cloud makes global R&D collaboration a reality

R&D is Huawei’s largest sector, it accounts for about half of the company’s 180,000 employees. Huawei’s IT department has decoupled the processes, tools, data, and compilation environments, which they use for product development to provide services such as a test cloud, compilation cloud, and developer community. These services comprise of the entire R&D process and significantly reduce the time needed to move software and hardware from R&D to production.

Digital sales effectively support sales teams’ operations

Getting a clear view of frontline activities used to be a challenge for Huawei’s sales managers. Also, if any problem arose, the causes were usually not clear. Recently, with the help of digital sales, Huawei has unified online and offline management to thoroughly support sales teams’ operations. For example, sales managers at all levels can use mobile phones to view the real-time activities of more than 200 subsidiaries in more than 170 countries and regions. These efforts have steadily but successfully improved the operational capabilities and efficiency of sales teams.

The one-stop service-delivery platform improves service delivery efficiency

Huawei’s delivery service involves a lot of activities. So, it used to require delivery personnel to open over 20 IT systems. Currently, Huawei has a service delivery platform that integrates all the necessary activities into a single portal. It covers resource management, outsourcing management, site acceptance, goods reception, technical support, and personnel management. This business-oriented portal significantly improves the efficiency of delivery. Also, Huawei built a delivery command center in Xi’an, China, where managers can see the progress of global delivery projects and implementation status of each site on a large-screen display. With these operations support, the company achieves efficient field-delivery services with online, real-time, visualized management.

The global-manufacturing operations and command center supports real-time decision-making

Huawei’s global-manufacturing operations and command center have integrated global suppliers’ status information and market requirements in a service-oriented manner. The company built a real-time decision-making system around each business scenario so that they can achieve quality forecasting. For example, if they find quality issues while testing a product, the quality warnings can be fed into the manufacturing process in a timely way. Through Big Data analytics, material lots can be managed and controlled efficiently.

The visualized logistics platform improves global logistics management efficiency

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