HKUST Business School Magazine

In today’s fast-paced world, companies in every industry must embrace digital transformation in order to improve their competitiveness and be equipped to meet future challenges. It has become a key driving force not only for an industry, but also for a region and even an entire nation. As the leading provider of information and communications (ICT) infrastructure and smart terminals, Chinese company Huawei has been leading the charge in this respect by helping other businesses adopt cutting- edge technologies and providing insights that lead to new efficiencies. In doing this, Xu identified three major challenges that companies may encounter: streamlining the IT infrastructure, migrating data, and standardizing data management. “This is a substantial undertaking and can take years,” he said. “So, organizations must be committed and lay a solid foundation to ensure success.” In his view, the correct handling and storage of data should always be at the core of any such process. “Data processing is the linchpin of digital transformation,” Xu said, noting that every company has legacy systems and procedures but must be ready to jettison this baggage. Doing so will often involve dismantling traditional, decentralized IT structures, which can perhaps be likened to old industrial chimneys, and migrating data to a unified, cloud-based architecture. This shift will not only make it easier to access information, but also foster better collaboration across the organization. “Traditional IT architectures are all decentralized ‘chimneys’,” Xu said. “We need to break them up and move to cloud-based architecture, so that employees in different places have more information. Effective collaboration should not be limited by location or distance.” Typically, another major challenge is to ensure that standards are uniform throughout when reorganizing the data. This can be a mammoth task which turns up unexpected difficulties, so meticulous planning and execution are required. “This can take two or more years,” Xu said. “Therefore, companies must be committed to change.” An approach he recommends is to look at ICT platforms as the production tool, data as the processing object, the software as the carrier, and good service as the ultimate goal. By resolving data processing problems, data can be turned into opportunities, then services, and finally income. According to Xu Wenwei, former President of the Institute of Strategic Research at Huawei, digital transformation is a clear imperative. Therefore, they should explore and understand the critical nature of what is happening and take that fully into account as they plan their future trajectory. “The use of digital technology is now essential to support any company’s development and achieve a competitive advantage,” Xu said. To this end, the first step towards successful transformation is to achieve strategic alignment within the organization, emphasizing buy-in at all levels. “All employees from senior management to grassroots levels must understand that digital transformation is essential for improving efficiency and meeting customer needs if you want to stay ahead in the market,” Xu said. Once a strategy and understanding are in place, the organization may then face the daunting task of overhauling their IT architecture and data management system. That is no easy task, but must be done to ensure there is an up-to-date and integrated platform to support evolving business operations and future plans. Biz@HKUST 9