---
title: "Digital Transformation: It Looks Like Technology and Tools, but It's Really About People"
description: "A digital project leader at a company planned to drive channel digitalization through bC integration but found it challenging due to cross-departmental collaboration. The author argues that difficulties in digital transformation ultimately stem from organizational issues, and introduces the \"Five Forces\" of digital transformation: organizational force, scenario force, system force, fault tolerance, and operational force."
author: "任文青Andy"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-06-13"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/digital-transformation-it-looks-like-technology-and-tools-but-it-s-reall-b48ed9bd/"
markdown: "https://xinjignxiao.com/en/articles/digital-transformation-it-looks-like-technology-and-tools-but-it-s-reall-b48ed9bd.md"
original_source: "https://mp.weixin.qq.com/s/O5OPjYlxV9uQ13hv9LKLWg"
translation: "https://xinjignxiao.com/zh/articles/%E6%95%B0%E5%AD%97%E5%8C%96%E8%BD%AC%E5%9E%8B-%E8%A1%A8%E9%9D%A2%E6%98%AF%E6%8A%80%E6%9C%AF-%E5%B7%A5%E5%85%B7-%E5%AE%9E%E9%99%85%E6%98%AF-%E4%BA%BA-b48ed9bd.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/digital-transformation-it-looks-like-technology-and-tools-but-it-s-reall-b48ed9bd/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Digital Transformation: It Looks Like Technology and Tools, but It's Really About People

> A digital project leader at a company planned to drive channel digitalization through bC integration but found it challenging due to cross-departmental collaboration. The author argues that difficulties in digital transformation ultimately stem from organizational issues, and introduces the "Five Forces" of digital transformation: organizational force, scenario force, system force, fault tolerance, and operational force.

Recently, a digital project leader at a company told me they were planning to start with bC integration to drive channel digitalization. However, after understanding it, they found a lot of cross-departmental collaboration involved, and they felt it was too difficult.
I understood immediately before they finished speaking.
I have a viewpoint: **The difficulties encountered in enterprise digitalization may ultimately be organizational problems.**
Why?
Digitalization requires the support of technology and tools, and it must be combined with business scenarios. It will inevitably change some of the original processes of the enterprise, touch the interests of different departments, and involve complex relationships between online and offline, regions, etc. These all relate to the "organizational force" of an enterprise. If a small issue is not coordinated well, it is difficult to advance.
"Organizational force" is the first of the "Five Forces" of digital transformation that I have summarized. As an industry service platform, New Distribution has been focusing on the reporting and research of channel digitalization, with opportunities to contact many enterprises and investigate many cases. Therefore, **I propose the "Five Forces" of digital transformation: besides "organizational force," there are also "scenario force," "system force," "fault tolerance," and "operational force."**
The "Five Forces" are just a summary for discussion and exchange. You may wonder: What do they mean? Are they important? Well, they are important! Today, I plan to explain them from the beginning in one article.
Where to start? Let's start with the concept of digitalization itself.
#### **What is digitalization?**
What exactly is digitalization?
Combining big data, cloud computing, and artificial intelligence, explaining concepts with concepts will leave listeners confused.
To talk about digitalization, we have to mention another term—informatization.
Have you ever wondered why we used to talk about informatization, but suddenly everyone is talking about digitalization? Isn't digitalization the same as informatization? What is the difference?
The difference can be explained in two sentences: **From "reference" to "decision," from "idea" to "action."**
What does that mean?
I once gave an example.
The difference between informatization and digitalization is like looking at a map versus using navigation. A map only presents information, letting us "know" the direction and route. What if we encounter traffic congestion on the road? What if we take the wrong path? It cannot make "decisions" for us.
But navigation can directly take us to the destination.
Why?
Because it integrates multi-dimensional, real-time, concurrent data, such as preset road information, your location, vehicle speed, road congestion, etc., and then directly guides your actions—of course, supported by intelligent algorithms.
**Informatization only lets you know; digitalization enables you to do—the core is that it integrates multi-dimensional, real-time, concurrent online data.**
Post-hoc recording is an informatization management system.
Digitalization is very hot now. But I find that often when people talk about it, they are not talking about the same thing. When you find that everyone is talking about the same concept but the content is vastly different, what does that indicate?
It indicates that it is still in the early stages of development.
Digitalization covers a wide range of fields, different industries, and different internal links within enterprises. How exactly to do it? Enterprises are exploring and trying, but some are still researching, some have just started, and some have gone further.
New Distribution focuses on the research of channel digitalization.
What is channel digitalization?
It is about connecting the chain from manufacturer (F) to distributor (B) to store (b) to consumer (C), integrating online data generated by actions and processes at each link (F2B2b2C), and guiding enterprises to make better marketing, production, and other decisions.
#### **Why should channels be digitalized?**
Once, when communicating with a digitalization leader of a brand, he asked: What is the value of digitalization? Is it necessary to do digitalization?
I understand that he asked this not because he didn't know the value of digitalization, but because there are too many people talking about the benefits now, such as directly connecting with consumers, transparent costs, better marketing decisions, etc. But they are all talking about value; how many have actually achieved it?
**When it comes to digitalization, it's all strategy, but when it comes to implementation, there are many obstacles, and even the promoters become skeptical.**
Many enterprises are in this situation.
My viewpoint is that **brands must be resolute in promoting channel digitalization because it may determine whether the enterprise will win or be eliminated in the future.**
Looking at it from the perspective of industry evolution, you will see it clearly.
From wholesale, to market focus sinking, to deep distribution, this is the evolution line of China's market-oriented channels. What does deep distribution mean? In the past, brands stood upstream and only relied on agents to seize county-level markets, but now you have to directly seize terminals.
**In the pre-digital era, this had reached its peak. Didn't brands want to connect with consumers? Of course they did, but they couldn't!**
At the same time, we need to look at another line. Over the past 20 years, what has been the biggest variable in Chinese business?
The rise of the internet!
From the earliest Taobao C2C, to Taobao Mall and JD's B2C, to later social e-commerce, O2O, short video live e-commerce, mini-program e-commerce, community group buying, etc. **These are all new retail forms based on the internet. For brands, they are new channels that have evolved.**
New channels brought traffic dividends, and a large number of new consumer brands emerged. Not only that, when various e-commerce appeared, brands were shocked because they directly connected with consumers.
Against this backdrop, FMCG brands invested resources online and had high hopes for online, but **due to the unplanned nature of FMCG products and the requirement for immediate availability, online sales accounted for a relatively small proportion.**
70% of FMCG industry sales still come from offline.
Online traffic has peaked, and online and offline are gradually integrating. After all the fuss, they found that offline is still the majority, so brands' attention returned to offline channels.
This is one background.
Another background is that **the internet has had a significant impact on retail, but not much on offline channels. The biggest impact was the emergence of FMCG B2B platforms around 2015, when the industry believed that B2B platforms would replace traditional distributors.**
What actually happened?
They didn't!
Distributors are still doing well.
The offline channel, from brand to distributor to terminal store, is still the largest business base. Traditional channels remain stable, but with the development of the market environment, **especially the education of the entire industry by new retail forms based on various new tools, brands are not only re-investing attention in offline but also upgrading it digitally.**
This is channel digitalization.
Note that channel digitalization is different from digital channels.
Platform e-commerce B2C, O2O, community group buying, mini-programs, private domain, short video live e-commerce, etc., are all new retail forms. For brands, they are actually digital channels.
Channel digitalization is the digitalization of the traditional channel chain.
**It not only connects the brand, distributor, and terminal chain but also reaches consumers (bC integration) to achieve a closed loop. These so-called new retail forms can be used to assist, enrich, and improve channel digitalization.**
**Therefore, channel digitalization—the core is to achieve bC integration of digital distribution and sales promotion—can be said to be the evolution and iteration of deep distribution.**
From wholesale, to market focus sinking, to deep distribution, to the current channel digitalization, each channel evolution will have winners and losers.
**Is channel digitalization necessary? From the industry trend, yes. Those who do it well will win, and those who lag behind will be eliminated. It's only a matter of time. This is the power of trends.**
#### **The "Five Forces" of Digital Transformation**
Saying channel digitalization is a trend feels like there is a highway there, seemingly not far away, but when we actually head in that direction, we find ourselves pushing a cart forward step by step, and the more we walk, the more unreachable it seems!
Can we move faster?
Industry communication and discussion are very important.
By studying cases, including lessons learned, effective methods, and pitfalls, we see that there are some commonalities in the capabilities of brands' channel digitalization. So, we made some summaries, which are the "organizational force," "scenario force," "system force," "fault tolerance," and "operational force" mentioned at the beginning of the article.
Let's go through them one by one.
**First, organizational force.**
Why was the digitalization leader at the beginning of this article troubled?
Modern enterprises are managed in silos, each responsible for its own area, each with its own assessment.
Digitalization requires cross-departmental and cross-regional collaboration, involving sales, marketing, IT, e-commerce, and other departments. Who leads? How are departments divided and coordinated? How to resolve non-cooperation and interest disputes?
Only the boss has the resources and ability to coordinate these matters.
But who says digitalization is not valued by the boss? In fact, this kind of attention can be divided into several situations.
The first: The boss says he values it and wants digitalization, but in reality, there is no resource investment.
The second: The boss does value it and even establishes a dedicated digitalization department. But the digitalization department is detached from business, doing planning and research, but unable to land.
Digitalization must be a top-leader project, but these two situations do not count.
The third: The boss personally takes charge. Personally taking charge does not mean the boss does the specific work, but rather that he himself learns and researches, invests and coordinates resources, makes effective organizational division, and promotes collaborative operations.
This is a top-leader project.
Difficulties in digitalization may ultimately be organizational problems.
**Second, scenario force.**
What is scenario force?
Two meanings.
First, digitalization must be combined with specific business scenarios.
Some enterprises, to cooperate with the so-called digital transformation strategy, purchase system tools, but in reality, they cannot be used. This situation exists.
**Digitalization is not a set of tools; it is the digitalization of specific business scenarios.**
Second, based on category characteristics and scenarios, sort out business logic and match digital operation methods.
Different categories and products have their own consumption scenarios. We studied the digitalization of different brands and found that they have consistency in underlying logic, but also huge differences in specific operations.
Take baijiu and beverages as examples.
Baijiu consumption is more planned, C and b have a strong relationship. bC integration is more about transferring the store's private domain to the brand, and the brand obtains marketing data. Activating private domain users involves both brand promotion activities and store community and offline activities.
Beverages are more about immediate consumption, C and b have a weak relationship. bC integration is more about the brand bringing traffic to the store, and the store helps the brand accumulate private domain. The store mainly obtains marketing rewards, and user activation mainly relies on the brand's operations.
Digitalization should start from specific scenarios.
**Third, system force.**
What is system force?
Also two meanings.
First, many enterprises have systems for different modules, but they are isolated and not connected. That's the first.
Second, **digitalization should start from solving specific problems, but it should be matched with systematic solutions.**
For example, a friend said they were promoting a mini-program mall to terminals, but it was difficult because many brands are doing this now. I asked if they had any measures to incentivize store owners. He said yes, registration gives red envelopes.
If you were the owner, would you register for a few yuan red envelope? I don't sell much of your product in a month. Even if I register, I might never use it again.
The successful experience is: terminal registration has red envelopes, bC integration can bring traffic to terminals, consumers get rewards for redemption, display rewards, and the more scans, the more points. All through this mini-program.
**Many problems in digitalization require multi-dimensional, systematic design behind them. You see a specific action of others, but you don't see the systematic design behind it.**
Any problem is in a large, complex trading system; system optimization can preserve the fruits of single points.
**Fourth, fault tolerance.**
What is fault tolerance?
Last month, Dongpeng held a first anniversary listing release. In the first half of this year, despite the epidemic, Dongpeng still grew rapidly against the trend. The chairman of Dongpeng specifically mentioned the role of digitalization in Dongpeng's development. In fact, when Dongpeng first started QR code marketing, because some people exploited loopholes to "shear wool," they lost over ten million yuan in a year. But what did the boss say? This is tuition we paid; we need to review and summarize. If it were another company, they might have held people accountable and replaced them long ago.
**Without patience, without giving the team room to try and grow, digitalization cannot grow.**
Digitalization is all about trying and exploring. Who is trying and exploring? The team! Since it's trying and exploring, it's inevitable to take detours and step on pitfalls. At this time, whether the boss has strategic patience will lead to different results.
**Fifth, operational force.**
Channel digitalization is related to three customers: distributors, terminals, and consumers. How to do customer operations well? Especially C-end customers, this tests operational force.
Integrating tools like live streaming and enterprise WeChat, how to design activities? How to retain? How to effectively activate the accumulated private domain? User operations involve collaboration among sales, marketing, digitalization departments, etc.
Two points need to be explained about these "Five Forces."
**First, "organizational force" is the core.**
A real case.
An enterprise established a digitalization project involving e-commerce, offline sales, and marketing departments. Initially, its positioning and distribution mechanism were not clearly defined. There were no problems at first, but later when real benefits were generated, departments began to dispute. Although revenue was considerable, it accounted for a small proportion of the overall business. The boss was in a dilemma and finally gave up the project.
Digitalization, on the surface, is technology and tools, but in essence, it is business, processes, and organization. The core behind it is "people."
**Second, it is a summary, not a sufficient condition.**
What does that mean?
How to do digital transformation well? This is a very complex problem, and we cannot give a sufficient condition like "if you do this, you will definitely complete digital transformation." However, we believe that "organizational force," "scenario force," "system force," "fault tolerance," and "operational force" can serve as references.
#### **In conclusion:**
The development of digitalization requires communication and discussion within the industry.
Because everyone can learn from each other's experiences. You did this, I didn't think of it. Can I also learn from your method? Can your thinking inspire me?
From July 12 to July 14, 2022, New Distribution will hold the (7th) China FMCG Channel Innovation Conference in Chengdu. We will focus on topics such as channel digitalization, BC integration, and distributor business development, providing an opportunity for the industry to fully communicate, learn from each other, and exchange ideas.
Welcome to come and discuss.
**Are you "watching" me?**


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671