TWSE Market Insights

＜中文版＞

One-fourth into the 21st century, mobile phones have developed from Nokia to smartphones within the short span of 25 years, while the booming development of the online world has given rise to the emergence of AI, tokenization, and digital projects. As early as 2016, Gartner, a research institution, predicted that 75% of enterprises worldwide would become digital enterprises by 2020. Facing the global wave, Apple, Google, Amazon, Microsoft, and other leading enterprises have already invested heavily in digitalization. The successful implementation of digitalization requires certain conditions within enterprises.

Microsoft, an IT service provider, has also been constantly transforming to move toward digitalization. In the first three decades since its establishment, Microsoft focused on terminal IT services, and it was not until the guidance of the former CEO Steve Ballmer in 2010 that Microsoft turned to cloudification; meanwhile, the development of the infrastructure of cloud computing made cloudification more advantageous. After taking office in 2014, Satya Nadella, the new CEO, said, “Achieving our mission requires us to evolve our culture. It all starts with a growth mindset – a passion to learn and bring our best every day to make a bigger difference in the world.” The new corporate culture has also deeply impacted Microsoft on its way to digitalization.

When employees were working from home during the pandemic, Microsoft created a space that supported a mixed office model through close cooperation between the Digital Department and the HR Department. This ensured work efficiency, regardless of where employees were or how they connected to the Internet, as well as protected the security and reliability of working environments, realizing a new mixed office model.

In the past few years, AI has completely changed the way Microsoft sees IT and its operating processes. By comprehensively improving its efficiency and promoting innovations, Microsoft has exhibited its determination to reshape different aspects of IT. From supporting applications, workflows, and services that enhance employee experience to network, infrastructure, and equipment that improve employee productivity, Microsoft’s investments with AI as the core will lay a solid foundation for upcoming innovations.

［1］Digitally transforming Microsoft: Our IT journey (https://www.microsoft.com/insidetrack/blog/digitally-transforming-microsoft-our-it-journey/)

• Policy Dissemination, Understanding Needs, and Building Consensus

The first priority of digitalization is policy dissemination. Companies are obliged to allow all employees to fully acknowledge corporate prospects. During the process of digitalization, understanding needs is of crucial importance. A continuous understanding of needs can build consensus from a point to a line, and eventually into a plane.

Digitalization is unique to enterprises, as what’s suitable for Company A may not fit Company B, while what’s not suitable for Company B is not necessarily unsuitable for Company C. No company can fully duplicate another company’s digitalization process.

• Experience Inheritance, Learning from the Younger Generation

The digitalization of companies mainly aims to improve the existing business flow. Employees responsible for different businesses in a company are often equipped with extensive business execution experience, and such experience shall be passed down to the younger generation. Facing the frontline of digitalization, the younger generation is also the main future user of digital tools. They know more about how the applications of certain digital tools can improve the processes; therefore, their requirements are more important. They live alongside digitalization and are more capable of adapting to the changes brought by digitalization.

• Implement from the Inside Out, and from the Top Down

Digitalization shall be from the inside out and from the top down. Facing the external wave of digitalization, companies shall first confirm whether software and hardware facilities possess digitalization capabilities, whether employees are equipped with digital thinking, and whether business processes can be adjusted in response to digitalization. If such preparations are not made ahead of time, the introduction of top-notch digital tools worldwide may turn out to be a hurdle to business execution, or a fleeting moment that ends before starting. Nonetheless, without the support of management, digitalization is unlikely to succeed. 

• Set KPIs, Establish an Exit Mechanism

The success of a digital transformation project can be evaluated by setting KPIs. You can directly compare project expenditures against the labor hours saved within a certain period for a single digital transformation project. For example, the reduction of persons/hours can represent the improvement in efficiency for IT. Before the implementation of a project, estimate the persons/hours required for the operation; after the implementation, calculate the persons/hours saved to compare against the project expenditures. For the overall company, compare the level of digitalization within a certain period, including the ratio of digital service expenditures to the overall IT expenditures, the usage rate of PCs, notebooks, tablets, and smartphones, and the ratio of local deployment, software, and service expenditures.

If the KPI cannot be achieved, the exit mechanism becomes relatively important. The exit mechanism should be established in advance when planning for the digital transformation project; both returning to the initial work execution method and having other alternatives can be considered.

In general, digitalization is closely related to corporate culture. Energetic companies that are more willing to accept new things are more likely to succeed, while traditional companies that earn through non-digital methods have higher chances of encountering setbacks that cause failure during the process of digitalization.

For companies, digitalization is not only limited to the introduction of new digital tools or new technologies but also the shaping of new thinking, new culture, and new systems from the inside out, so as to move toward the common goals.