40 Years On: Where Does China's Digital Transformation Confidence Stem From?

40 Years On: Where Does China's Digital Transformation Confidence Stem From?

2024-06-27 75 193

Chinese enterprises need to unite and create something new.

Thus, the 828 B2B Enterprise Festival was born.

In the past two years, as many Chinese companies have been squeezed by domestic and international circumstances, they have begun to compete for market share and orders through self-destructive and involutionary methods.

This has led to policies explicitly proposing to counter involutionary and unfair competition.

The 828 Enterprise Festival has thus demonstrated its extraordinary value.

Unity and integration are its themes.

By uniting the supply side of digital intelligence products and services, a convergent platform is built to bridge the gap with the demand side, thereby accelerating the implementation of this round of technological innovation from technology to industry to business, and striving for a longer period of advantage in reaching the technological peak.

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Digitalization, cloud, and AI can become the keys to the future in the shortest possible path and time.

01 Small and medium-sized enterprises (SMEs), one hurdle after another.

In 1982, Wenzhou, Zhejiang.

The then city party secretary, Yuan Fanglie, was in a bit of a predicament.

The commendation conference specially held for outstanding individual businesses was unfortunately met with a cold response.

The invited individual businesses either hid at home and did not show their faces or fled overnight, and some even attended with all their possessions, ready to "go in" at any time.

The background of the story was that before the commendation conference, eight individual businesses (the "Eight Kings of Wenzhou"), who were of farmer origin and had thriving businesses, were accused of "speculation and profiteering."

The big bosses were either arrested overnight or fled.

At that time, China presented two incompatible scenes: in the south, Shenzhen, the Shekou Port echoed the slogan "Time is money, efficiency is life," and the private economy grew wildly.

In the central Wenzhou, a group of people pointed at a small western-style building built by Zheng Xiangqing, one of the "Eight Kings," saying, "If this person does not engage in capitalism, can he have money to build such a building?"

The scythe of whether to be capitalist or socialist was hanging high, the Eight Kings were imprisoned, the surviving individual businesses "did not dare to move," and the Wenzhou economy fell to an ice point.

The confidence of the private economy was saved by a social movement from the bottom up.

Ding Chunlin, the then deputy editor-in-chief of Wenzhou Daily, did not publish the manuscript of "striking the Eight Kings" and wrote a thousand-word internal reference in his own name to call for justice for the Eight Kings.

Shi Jinkuan, the former factory director of Wenzhou General Electric Factory, went to Beijing three times and finally got the central approval of "focusing on help, striking inappropriately."

The city party secretary Yuan Fanglie took the lead in the local court to re-investigate, and the Eight Kings were finally re-sentenced and released.

At the beginning of 1984, the central document No.

1 officially stated: Do not confuse the economic activities allowed by the policy with the unorthodox wind, and do not confuse the general deviation of farmers from economic policies with economic crimes.

The return of the "Eight Kings" injected a strong stimulant into the private economy of Wenzhou.

Later, in 1992, the general designer's southern tour speech completely solved the contradiction of whether to be capitalist or socialist.

Chinese private enterprises began a vigorous forty years of "big work and quick progress."

The hesitant inland cities and the proactive special economic zones finally merged into the same river.

Policies and major technological innovations have the same great power, allowing some people to hesitate and others to dare to take risks.

Today, the Chinese market has once again shown a trend of division.

GPT has brought the spring breeze of AI revolution to China, and internet technology companies such as Huawei, Alibaba, and Tencent have taken the lead in responding.

Cloud computing and large models have become a battleground.

Everyone is full of enthusiasm and believes that the next engine to change the world must be AI.

However, small and medium-sized enterprises living in the capillaries of China have fallen into a new predicament - money is getting harder and harder to earn.

The problems in front of them are all very realistic: the cost of labor, raw materials, transportation, etc., is expensive, and the profit is as thin as a blade.

What should be done?

To grab orders, peers reduce prices and involution, should I follow the reduction?

The pressure of funds is great, is the money invested in expanding production?

Or spent on research and development?

The supply chain goes to Vietnam, Mexico, Hungary, and other places to go to sea, should I follow the trend to build a factory?

Artificial intelligence is on fire, how to land as soon as possible, and let "AI+" improve efficiency and create revenue?

These concerns point to the same problem: when the global economy is weak, how can small and medium-sized enterprises reduce costs and increase efficiency?

Take history as a mirror.

Forty years ago, individual efforts and support from the top level opened up the gap between Shenzhen and Wenzhou, inland cities took the initiative to look up to special economic zones, excellent individual businesses and private entrepreneurs, together seized the dividends of the times.

So forty years later, build a "bridge" between small and medium-sized enterprises and technology companies, install the digital intelligence engine that changes the world on the micro-individuals that promote economic development, and small and medium-sized enterprises can share the confidence of the future with technology companies.

02 The contradiction between transformation and survival.

However, building a "bridge" is not an easy task.

If forty years ago, rescuing the confidence of entrepreneurs mainly solved the problem of "whether to do it," then today, to make small and medium-sized enterprises look to AI and digital intelligence, we must first solve a bunch of problems such as "whether to do it," "whether it is good to do it," and "how to do it."

China's digital intelligence transformation is not late, and there are many small and medium-sized enterprises that really practice it, but so far the digital penetration rate is only 19.5%, far behind the average of 33% in developed countries.

There are too many pits, so small and medium-sized enterprises dare not easily transform.

In Panyu, Guangzhou, there is a small and medium-sized enterprise that exports mobile phone cases for Apple.

I once chatted with the founder, and he said: "Before, I made money by running a factory, and when I saw others engaging in automated production, I would think, if my factory also engaged in automated production, how cool it would be."

Three to five years ago, he signed up for a study tour group and visited a large enterprise's production workshop and its MES system in Shandong.

In the end, he became the only person in the study tour team who paid for it.

After returning, he installed the MES system in his factory.

In order to "support" it, he also hired technical personnel to write code and develop internal enterprise applications.

As a result, he found that this huge system is not only unsuitable for his small factory, but even the payback period has been postponed again and again.

In the end, he still dismantled this tool, and the workshop returned to the original state of manual production.

His experience actually reflects the predicament of the digital intelligence transformation of small and medium-sized enterprises.

First, the cognition of digital intelligence transformation is not clear, and it is not known which tool and which set of plans are suitable for oneself.

Many small and medium-sized enterprises naturally believe that digital intelligence transformation is equivalent to "machine replacement of people," automated production lines, and heavy MES systems.

However, for most small and medium-sized enterprises, a simple work order system or OA application can move the offline docking work online and achieve cost reduction and efficiency improvement.

However, it is obvious that the market has not popularized the concept of digital intelligence transformation for small and medium-sized enterprises.

Second, the cost of traditional transformation methods is high and the price is great.

Many small and medium-sized enterprises that dare to transform and want to transform can generally learn from the paths of large enterprises.

It is necessary to customize a complete set of digital intelligence systems and also hire personnel to write code.

The cost of this transformation route is difficult for small and medium-sized enterprises to bear.

Under normal circumstances, the average life span of Chinese small and medium-sized enterprises is only three to five years, and there are many examples of enterprises going bankrupt before the cost is digested.

Third, it is easy to install a digital intelligence system, but it is not easy to adapt to digital intelligence work.

For many small and medium-sized enterprises, spending a lot of money to customize a set of digital intelligence systems is only the first step of transformation.

How to make enterprise employees adapt to the work after accessing the digital intelligence system is the key.

Moreover, the educational level and digital intelligence cognition of many ordinary employees of small and medium-sized enterprises are relatively low, and how to train personnel in a short time is also a problem faced by the digital intelligence transformation of small and medium-sized enterprises.

These predicaments also reflect a problem: for a long time, the initiative of technology companies in the practice of digital intelligence transformation of small and medium-sized enterprises is lacking.

Today's market environment is very different from forty years ago, and it is no longer the case that solving ideological problems can give people a solid confidence.

Today's digital intelligence transformation of small and medium-sized enterprises requires the determination of the enterprise itself and the active downward compatibility of technology companies.

In Yueqing, Wenzhou, Yinei Electric is a company specializing in the design, production, and sales of automotive and home appliance plug-ins.

The company's products are directly or indirectly equipped for car companies such as FAW, Dongfeng Motor, Tesla, Chery, Geely, and home appliance companies such as Haier, and are exported to overseas markets such as Japan, South Korea, Southeast Asia, and Europe.

It is clearly an invisible champion, but for a long time, Yinei Electric was still in a state of "barbaric growth" in operation - manual order arrangement, material inventory check, resulting in low efficiency, various semi-finished products, outsourcing parts, and parts purchase parts need to be decomposed again according to the finished product assembly plan, various departments do not coordinate plans, materials are not complete, and plan execution is difficult.

The accuracy of real-time inventory is not high, accounting is not timely and complete, the on-time delivery of materials is not high, the general material is moved when the material is moved, which is easy to cause subsequent order demand omissions, and the order is short of material and cannot be delivered.

The warehouse management is chaotic, and the first-in-first-out of raw materials is not controlled.

It is found that the essence of the problem faced by Yinei Electric is the same as that of most small and medium-sized enterprises: as the enterprise continues to grow and develop, the existing human resources can no longer solve all potential production problems.

And the way of "recruiting more people to solve problems" is definitely not cost-reducing at present, and it may not increase efficiency, so it is necessary to find another way, and digital intelligence is the best solution.

While Yinei Electric is struggling with digital intelligence transformation, Huawei Cloud is also looking for specific scenes for the implementation of digital intelligence solutions.

A timely rain came, and Huawei Cloud officially entered all links of Yinei Electric production.

With the support of Huawei Cloud, Yinei Electric has established an intelligent production and sales coordination system and warehouse management, using digital intelligence to break through departmental barriers, eliminate data ambiguity, and achieve an increase of 15% in production plan accuracy, an increase of 30% in data accuracy, a reduction of 2 days in cost calculation cycle, and a reduction of 1 million in operating costs.

Point-to-point empowerment is naturally immediate.

However, how to solve the huge, fragmented, and differentiated needs of Chinese enterprises, so that enterprises with insufficient confidence want to transform and dare to transform?This question shares a similar approach to another situational problem: In a context of consumer downgrade and a sluggish economic environment, how can we enhance consumers' willingness to spend?

The answer is the same: "Create a festival."

03828 is not just for "promotion."

In the internet era, to stimulate consumer demand, various e-commerce festivals like Double 11 and 618 have emerged.

Consumers who "buy, buy, buy" not only support e-commerce platforms but also the businesses behind them.

Following this logic, to stimulate the willingness of enterprises to transform digitally, when small and medium-sized enterprises (SMEs) need to "reduce costs and increase efficiency," a "To B Taobao E-commerce Festival" for businesses is called for.

On August 27th, the third edition of the 828 B2B Enterprise Festival, jointly initiated by Huawei and tens of thousands of ecological partners, along with numerous industry organizations, officially opened during the Data Expo.

During the conference, Huawei and its ecological partners launched nearly 600 products and solutions around the needs of enterprises for rapid cloud adoption, digital transformation, AI upgrades, and industry applications, covering the entire stage and scenario of enterprise digitalization, providing better support for enterprise digitalization.

As the only festival in Chinese history specifically created for businesses, the value of the 828 Enterprise Festival extends to both SMEs and technology companies.

For Huawei and its ecological partners, the 828 Enterprise Festival is akin to building a thriving market to support the implementation of digital products, finding a practical application landing point for AI and cloud computing.

This will help technology companies achieve an effective closed loop of "technology research and development - technology implementation - technological innovation."

After all, AI and digital technology can only generate greater economic and social value when they move from the lab to the enterprise.

For businesses, the 828 Enterprise Festival, relying on Huawei's industry influence, offers the most direct value by building a one-stop shopping platform, creating a large market for digital products and services for SMEs.

At the same time, the support from Huawei and tens of thousands of partners allows SMEs to receive targeted product services at the 828 Enterprise Festival, reducing the barriers to digital transformation.

On the other hand, the opening ceremony of Huawei's 828 B2B Enterprise Festival has become the official CP of the Data Expo, and the annual Data Expo is an important platform for the gathering of global high-end resources, providing a window for large, medium, and small enterprises to understand new opportunities and negotiate new cooperation.

More importantly, the 828 Enterprise Festival is essentially a mental education for the digital transformation of SMEs.

Huawei's support and targeted teaching will increase the confidence of SMEs in transformation, which can be described as timely rain.

In fact, since its launch in 2022, this year is already the third edition of the 828 B2B Enterprise Festival co-hosted by Huawei and its ecological partners.

To date, the 828 Enterprise Festival has passed through more than 100 cities and held thousands of online and offline activities.

During this period, Huawei has been committed to building a digital technology base with solid R&D capabilities, making the black land thick, and in conjunction with ecological partners, through the 828 Enterprise Festival, has created a vanguard for the digitalization process of Chinese enterprises.

For example, the original external software data interface problem of Hua Guang Automotive Interiors was tightly held by software manufacturers, with an API interface starting at 100,000.

The cost of changing the customer's own software was too high, and they could only endure the software manufacturer's overly aggressive pricing.

However, after Huawei Cloud entered Hua Guang Automotive Interiors, it built a set of equipment management systems.

In solving the problem of being held hostage by software vendors, Huawei Cloud first allowed Hua Guang to fully move to the cloud, ensuring the security of user data and the stable operation of Hua Guang's business systems; then it built a digital factory, connecting all software interfaces to prevent data from being held hostage by software vendors, and finally helped Hua Guang save 300,000 yuan in data interface costs.

Another example is that Huawei Cloud helped Dong Rui Machinery to create the first cold heading machine production line cloud application in the country.

Before Huawei Cloud entered, the PLCs used by cold heading machines were mostly monopolized by foreign manufacturers, and domestic equipment manufacturers found it difficult to coordinate equipment manufacturing through independent research and development of industrial control systems.

If this "bottleneck" problem is not solved, domestic cold heading machines will always be constrained by foreign manufacturers in PLCs.

As a domestic industry leader, Dong Rui Machinery took the lead in sending a cooperation signal to Huawei Cloud.

After understanding the needs of the enterprise, Huawei Cloud, in conjunction with partners, deeply cultivated the multi-station cold heading machine production line, creating a cold heading standard part MES + lightweight industrial control system for downstream manufacturers of Dong Rui.

It also embedded cloud edge computing modules in the production equipment to capture data from foreign PLCs, bypassing foreign technical blockades and achieving a countermeasure function for mechanical equipment.

In the end, Huawei Cloud and Dong Rui created the first "domestic MES central control system" in the domestic cold heading machine industry, breaking the monopoly of international giants and forming a solution that can be promoted to the entire industry.

Dong Rui's "domestic replacement" in PLCs also illustrates that as the global technological revolution enters deep waters, we have reached a very critical point.

SMEs, which account for more than 60% of the economic total and more than 80% of employment, their digital transformation determines the level of construction of digital China; it determines whether Chinese manufacturing can break through a series of bottleneck problems with a more agile posture; it determines whether the Chinese economy continues to have unexpected potential.

Since its inception, the 828 B2B Enterprise Festival has been strongly supported by governments at all levels, with the Ministry of Industry and Information Technology, Zhejiang, Jiangsu, Anhui, and other places issuing documents to start, and national industry organizations actively participating, with leaders of provincial and municipal governments attending the meeting and providing guidance.

This session of 828, as a major event during the Data Expo, has also been highly valued by the Guizhou government.

Leaders of Guizhou Province and the National Data Bureau attended the 828 B2B Enterprise Festival, and in addition, Guizhou Province and Huawei jointly initiated the Guizhou 8+4 industrial ecological signing.

04 Conclusion 15 years ago, Taobao's first Double 11 set sail, and since then, every year on this day, it has been a day for major enterprises and merchants to refresh historical achievements.

Enterprises and platforms that have tasted the sweetness have created various promotional events such as beauty festivals and snack festivals.

However, no one has ever created a To B e-commerce festival aimed at the digital transformation of enterprises.

But Huawei has done it.

Zhang Xiuzheng, President of Huawei Cloud China, expressed the significance of 828 in this way: "What we do today will echo in the future.

Every seed we plant today can grow into a towering tree, a dense ecological forest."

With the 828 Enterprise Festival as the core, Huawei Cloud and its ecological partners have not only opened up the supply and demand gap of digitalization, but more importantly, the digital transformation of Chinese enterprises, with the participation of technology companies, has more confidence.

Today, when Chinese enterprises are facing the direction of digital transformation and urgently need to boost confidence, the initiative of the tens of thousands of technology companies behind 828 to solve problems and do difficult things undoubtedly complements the third-party strength beyond individual enterprises and top-level design.

All these efforts facing the future will eventually turn the "rapids" faced by enterprises into "living water."

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