The Evolution of the Digital World: From Data to Intelligence

Digital World |

In the era of rapid development of the digital economy, digital transformation has become an indispensable option for every organization in today's society. Organizations of all sizes are increasingly reliant on digital technology for survival and development, and for winning in the competitive digital economy.


So what exactly is "digital transformation"?
I believe that "digital transformation" is a product of the development of "digitalization" to a certain stage. It is a development model for building data infrastructure, driving business operations, and supporting intelligent decision-making.
"Digitalization" began with the application of information and communication technologies in business and has roughly gone through three stages: the informatization stage, the digitalization stage, and the intelligentization stage.
  1. The First Stage: Informatization
Informatization began in the 1990s. During this stage, enterprises underwent two important changes: the first was internal digitalization, such as electronic finance, ERP, and the establishment of corporate websites; the second was the digitalization of external business transactions, such as email, EDI (Electronic Data Interchange), and online transactions.
The most important aspect is the conversion of information and documents from analog to digital formats. Information processed digitally can be transmitted, processed, and stored over networks, greatly facilitating external communication and improving internal management efficiency.
E-commerce, e-government, and e-communities became hallmarks of this stage, leading social development.
This stage primarily addressed the legal validity of electronic records resulting from the digitalization of business operations and external communications. The promulgation of the Electronic Signature Law in 2004 is one such hallmark.
  1. The Second Stage: Digitalization
With the widespread adoption of the internet, it is no longer the exclusive domain of a few companies. This stage saw the emergence of two concepts—"Internet+" and "+Internet"—reflecting the internet's penetration into traditional industries and their proactive embrace of the internet.
In this stage, industrial operations and corporate organization are based on digital operations. The application of digital technology in existing business processes has impacted corporate organizational structures, business ecosystems, and even the entire social division of labor and industrial chain, promoting the restructuring of social resources and industrial integration. The emergence of new businesses is a major characteristic of this stage.
  1. The Third Stage: Intelligentization
We are currently experiencing intelligentization. The widespread development and application of digital technologies, the emergence and societal application of the Internet of Things (IoT), and the ubiquitous IoT becoming the sensing network of real society, along with the integration of real and network societies, and the fusion of social life with production, business operations, and social governance, all contribute to the gradual interconnection of everything in human society.
The operation, behavior, and events of real-world entities (including people, objects, and organizations) are recorded, forming comprehensive data for understanding these entities. Machine learning, AI algorithms, and intelligent systems can directly provide answers to various problems faced by humanity with little or no intervention—this is what is known as insight, prediction, and knowledge discovery. These intelligent tools can even replace humans in making intelligent actions; this is the new landscape that "big data + artificial intelligence" brings to human societal development.
The application of data intelligence technology essentially brings about a transformation in cognitive methods, sometimes referred to as a transformation in knowledge production methods. In the past, people relied on humans to collect, analyze, and produce knowledge; now, in addition to human knowledge production, intelligent tools produce data, learn, and analyze it to directly provide humanity with knowledge and solutions. Therefore, in this stage, the entire application of digitalization has undergone iteration or transformation.

Data-Driven Digital Transformation
Previously, digitalization was business-driven—installing systems to solve specific problems led to an ever-increasing number of systems. However, today we find these systems cannot be directly integrated. Therefore, a shift to data-driven business is needed to reconstruct the entire digital infrastructure, which is what we're discussing today as digital transformation.
Simply put, digital transformation is a product of digital development reaching a certain stage, and the application of digital technology remains its foundation.
The key significance of digital transformation lies in its focus on supporting intelligent analytics through the architecture of digital infrastructure and the application of various digital technologies, rather than the fragmented installation of different systems. Most importantly, it involves connecting data across different systems and business departments within the organization, building infrastructure with unified technical and data standards to ensure data uniqueness, consistency, authenticity, integrity, and reusability, and then equipping it with appropriate algorithms or machine learning tools to support organizational decision-making.
Well-run organizations can even export data externally—this is known as data circulation. This not only supports the company's own decision-making but also that of other companies; through data circulation, data monetization can also be achieved.
Once a digital foundation based on data-driven intelligent decision-making is established, then we can say that digital transformation has been essentially achieved.
Digital transformation is a development opportunity for every organization and for society as a whole. Shanghai took the lead in proposing a comprehensive digital transformation strategy, building a three-in-one urban digital foundation encompassing economy, life, and governance. This reflects the deployment of digital transformation at the societal level, which will promote and empower every organization, ultimately enabling the entire society to achieve data-driven development.

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