Digital Transformation in the AI Era: Focus on Core Business Value

The Essence of Digital Transformation in the Age of AI

In this era of rapidly advancing AI, we are constantly bombarded with news about ChatGPT, DALL-E, and other powerful large language models. As someone deeply involved in enterprise digital transformation, I've found myself questioning: amidst this AI frenzy, have we lost sight of the core purpose of digital transformation?

The AI Hype vs. Business Fundamentals

Recent conferences I attended in Shanghai and Beijing showcased the incredible speed at which AI is evolving. From natural language processing to image generation, it seems AI can do it all. Many businesses are eager to leverage these technologies for a "quick win," hoping to leapfrog competitors through AI adoption.

However, this approach risks overlooking the fundamental purpose of digital transformation: creating value for customers.

For any business, its core is its operations – what it does best. In retail, for example, that means selling goods efficiently. Focusing on maximizing sales efficiency should be paramount, not chasing every AI trend.

As management guru Peter Drucker famously said, "The purpose of a business is to create a customer." Satisfying customer needs is the mission of every business. True digital transformation uses technology to empower core business operations, not replace them. In this age of AI, we need to ask: How can we leverage new technologies to enhance our core business capabilities rather than blindly chasing technological trends?

New Retail: A Case Study in Digital Transformation

Let's take the new retail sector as an example. The key objective for any retailer is to improve sales efficiency. This translates into streamlining internal operations, making new products available faster, and facilitating quicker transactions. To achieve this, several crucial steps are needed:

• Standardization and digitalization of product information:
• Real-time inventory management
• Intelligent analysis of sales data
• Digital collaboration across the supply chain

At the heart of all this lies product data management. I was involved in a project with Hema Fresh, where comprehensive product data management, achieved through separating goods from inventory, enabled seamless online and offline integration, significantly boosting operational efficiency and customer experience.

A successful new retail enterprise needs at least nine key modules for effective product digital management:

• Product Data Structure Design: Defining a logical structure to store product information, including basic details (name, description, price, inventory), categorization, brand, attributes, and specifications.
• Product Classification Management: Designing a hierarchical product classification system with attributes and specifications templates for each category. This should allow for dynamic addition, removal, and modification of categories.
• Product Pricing Management: Defining pricing strategies like fixed prices, promotions, and membership discounts. Implementing features like price adjustments, coupons, and tiered discounts.
• Product Search & Recommendation: Building an efficient search engine that supports keyword searches, filtering, and sorting. Leveraging user behavior and purchase history to recommend relevant products.

Looking Ahead: A Practical Approach

In this rapidly evolving landscape of AI technologies, I believe digital transformation is not just necessary but more crucial than ever before. However, success lies in integrating technology seamlessly with core business operations, achieving a synergistic effect. As Amazon founder Jeff Bezos famously said, "Every day is Day 1." We must maintain that mindset – staying curious about new technologies while always focusing on delivering value to our customers.

Remember: in the vast ocean of digitalization, navigating your course is more important than chasing every wave. By prioritizing digital transformation initiatives that enhance core business capabilities, businesses can weather the AI storm and achieve sustainable growth.