Digital transformation requires a paradigm shift to build a digital world.
By Peng Zhongyang, Board Member, President of Enterprise BG, Huawei
2020 was an unusual year, with COVID-19 generating enormous uncertainty for both individuals and organizations. But we've managed to make positive changes in many different industries and create new value. A new digital paradigm is taking shape.
Industries innovate while digitalization advances
Since early 2020, the COVID-19 pandemic has changed the way we work, live, and learn. Many things have moved online, with distance education, telemedicine, and livestream marketing by influencers continuing to flourish. Even here at Huawei, we've shifted to connecting with customers online and signed contracts over the cloud. Industries are displaying an incredible will to survive, explore, and develop in the digital world, with technologies like AI, IoT, and cloud computing developing rapidly to facilitate this process.
Exploring the potential value of each business scenario
To achieve industry digitalization, we should determine business scenarios based on customer strategies and business pain points. There are three key factors to digitalization: First, technology. We need to integrate multiple technologies with core businesses. Second, industry know-how. We need to fully understand different industries. Third, practice. We need to explore and create a better future through hands-on application.
Synergy across five tech domains drives customized innovation
In the new digital age, we will see synergy between five major tech domains: connectivity, cloud, computing, AI, and applications. These will enable people, things, and information to be connected at all levels. Huawei needs to connect the business scenarios of diverse industries to broaden the boundaries of traditional industries, and offer more flexible scenarios.
Huawei's synergy across these five tech domains has already created a solid foundation for digitalizing the coal mining industry. Huawei has turned coal mines into digital structures in more than 10 unique business scenarios, including five flows (power supply, ventilation, drainage, main transportation, auxiliary transportation) and two planes (tunneling and mining). By digitalizing mine infrastructure, Huawei has created digital twins that make the whole mining business digital and intelligent. Thanks to these massive data flows, workers no longer have to climb up and down mines. AI-powered machines can now dig more intelligently. Remote control is now possible on the ground, leading to great gains in efficiency and enhanced security. And more miners can now come to work in suits and ties and do their job while enjoying a cup of coffee.
Gathering industry insights and maximizing potential
Industry digitalization isn’t about disrupting industries; it’s about helping them to do better. This requires deep insights into how each industry works and an understanding of industry know-how. We seek out experts who truly understand a given industry and put them in the driver's seat. By integrating and innovating technologies and services, we can maximize the core competencies of our enterprise customers, allowing them to go from strength to strength in new dimensions.
For example, technology has changed how TV programs are produced. In the past, artists used single-person editing, manual copying, and serial production. Now, more than 150 cameras are used onsite for program production and the volume of data generated for a single episode can reach 150 TB, 15 times that of a traditional program. Producers desperately want to see change.
To address this issue, Huawei has collaborated with its partners to establish a cloud platform for the filming process, streamlining the entire video production process from shooting, editing, and streaming to storage and backhaul, moving the entire process to cloud. This has shortened production cycles by 30 percent and cut costs by 20 percent.
Customers have insights into the needs and direction of their own industries. Huawei has the technical expertise and ability to drive customers to develop more rapidly and embrace a better future.
Learn from practice and innovate for a better future
The idea behind digital transformation is easy to understand but difficult to implement. Huawei has encountered many challenges on its own digitalization journey, but has learned valuable lessons during the process. In the past, our logistics campus in China’s Dongguan had warehouse overstock issues during peak periods in June and December. Finding the right goods was very challenging, inefficient, and error-prone, so Huawei started developing automated equipment and intelligent algorithms in 2018. By synchronizing sensors on equipment, applications, and people, Huawei was able to move from manual to automated intelligent operations. As a result, delivery efficiency (volume of goods delivered per capita) has increased by 67 percent and delivery cycles were cut by over 50 percent.
Over the course of Huawei's 30-year globalization journey, we’ve identified 68 digital scenarios within our own business, including in R&D, manufacturing, global marketing, and finance.
Huawei has been deeply involved in many customers' digital journeys. We’ve helped build more than 700 smart cities around the world, including Smart Shenzhen, Digital Fuzhou, and Smart Dunhuang.
Creating and sharing value together
To build a digital future, we need to first build a digital ecosystem where we can co-create and share value. In the age of excess demand, the ecosystem model we used mainly focused on selling products, which meets rigid demands through the principle of equivalent exchange.
This is a positive-sum game, not zero-sum. And it’s one for which we’ve identified three dimensions:
The first dimension targets the future of digitalization and gains insights into the unsatisfied demand in segmented scenarios in multiple industries. The second dimension requires aggregating the different capabilities of industry partners and maximizing their strengths. The final dimension involves developing multiple approaches to collaboration and new business models that create and share value together.
Shenzhen's Airport of the Future exemplifies how we used these three dimensions to co-create value. In this project, Huawei and its partners developed diverse scenario-based solutions such as flight scheduling, stand allocation, and ground support. Huawei also aggregated its partners' software development and data governance capabilities and guided its partners throughout the entire project cycle. In 2019, we managed to reduce the number of passengers who took shuttle buses by 2.6 million, boosting the efficiency of security checks by 60 percent.
Paradigm shift for a brighter future
Humanity will enter the intelligent world era over the next twenty to thirty years. The depth and breadth of this change will be beyond anything we can imagine. Traditional development paradigms will no longer meet social demand and that’s why we urgently need to re-orchestrate all related elements and build a new paradigm, to generate new productivity.
The new digital paradigm has three features:
First, Aristotle's first principles define the nature and starting point of things. The first principle of the new digital paradigm is to center on customers' requirements, pain points, and aspirations, and to create value in each scenario.
Second, digitalization will rely increasingly on collaboration between different tech domains. The synergy between the five major tech domains we've identified will digitalize industry infrastructure and business processes to create digital twins, opening up a world of possibilities for diverse industries.
Lastly, the digital ecosystem will evolve into one that encourages co-creation and value-sharing. We will work with our partners to create synergies and share success. Gary Hamel once said, "You can't use an old map to see a new land." We are now in a world full of uncertainty, which is accompanied by unlimited opportunities. We hope to work with our customers, partners, and friends to embrace these changes, build a new paradigm for industry digitalization, and create a great future. Let's work together to scale new heights.
