Under the influence of the broader environment, the goals of digital transformation—namely "increasing revenue, improving efficiency, and reducing costs"—are gaining more attention. In this context, product managers, as the "trendsetters," must adopt a higher-level perspective to oversee the big picture and cultivate top-tier product thinking.

This era is one of flourishing digital transformation, marked by the rapid development of intelligence represented by large models and AI algorithms. Whether for tech giants with an inherent internet DNA like ByteDance, Huawei, and Alibaba, for traditional mid-to-large-sized companies in more physical industries, or for areas dominated by government institutions and public services, "digital transformation" has become a frequently mentioned buzzword.

In this digital transformation race, tech giants like ByteDance are naturally ahead, having already demonstrated successful practices in managing and empowering their businesses and organizations. However, these companies don’t stop there. The methodologies and tools distilled from their best practices, once commercialized, become products that can be sold as solutions, generating economic value. This gives these pioneers the advantage of playing the role of producers (suppliers), continuously reaping financial rewards and recovering early investment costs.

On the other hand, traditional enterprises or government departments can choose a complete "digital transformation" solution based on their circumstances and demands (and even have suppliers implement it directly if the budget allows), or they can opt for a custom blueprint. They may choose to either develop their own solutions or procure commercial products and services.

In short, the approach can vary based on need.

In this wave of "digital transformation," you and I, as product managers, are at the center of the storm. Whether you're involved with the C-end, B-end, G-end, or, like me, on the data side, trust me, you'll find your place and role in this grand scheme.

As a product manager at the forefront of this movement, beyond doing your core work well and managing your immediate responsibilities, if you wish to refine your skills, you need to rise above the vortex, gain a higher vantage point, and develop top-tier product thinking.

I. The Purpose of Digital Transformation

If we consider digital transformation a grand strategy, then before making any moves, we need to first understand: What is the purpose of digital transformation? What goals are we hoping to achieve—qualitative or quantitative?

Simply put, the purpose of digital transformation is this: In an increasingly competitive market, companies aim to gain differentiated competitive advantages or a first-mover advantage by reducing uncertainties and optimizing resource allocation.

This may seem a bit abstract, so let me simplify it: It's about perfecting process management to the utmost extent, capitalizing on strengths, avoiding weaknesses, and thus discovering and acquiring a differentiated competitive edge to make money—and ideally, spend less while earning more.

Once the purpose is clarified, the goals become evident. But are these goals quantitative or qualitative?

I believe they should be both, with quantitative goals being the primary focus. Ultimately, the goals can generally be divided into three categories:

Increasing Revenue

• Quantitative: For example, a large retail chain, empowered by digital transformation, may optimize its product assortment, adjust customer shopping routes, and increase its daily revenue by XX amount or see a year-over-year growth of over 30%.

• Qualitative: After fully inventorying and managing core data assets, the company could meet data element market trading standards, potentially creating future revenue from data asset monetization.

Improving Efficiency

• Quantitative: Through business process optimization within marketing systems and cross-system integration, an entire order lifecycle could see a reduction of XX steps, with an average time-saving of XX, improving efficiency by YY%.

• Qualitative: The launch of the XX data dashboard will significantly enhance the communication efficiency and experience of the XX and YY departments.

Reducing Costs

• Quantitative: The transparency of XX business processes and near-real-time warehouse data updates are expected to save XX in warehouse management and logistics costs.

II. Common Pitfalls in Digital Transformation

Next, let's look at some of the common pitfalls in digital transformation.

1. Vendor Mindset

The "vendor mindset" can be likened to the saying, "When you have a hammer, everything looks like a nail." In other words, a focus solely on what one has or can provide will lead to being limited to one's own capabilities, only solving problems within familiar areas. This mindset confines you to narrow, detail-oriented execution without considering the broader strategy.

To cultivate top-tier product thinking, you must break free from this mentality. Think more from a buyer’s perspective: What are the current issues and pain points? Which are high-priority? Are these issues interconnected or dependent on others? After a comprehensive assessment, systematically identify "what I need" and then find or create the necessary tools to meet those needs.

This underscores a core principle: Before figuring out how to do something, focus on what to do and why.

2. Self-Indulgence

Self-indulgence is another common pitfall, often seen in project models where similar industry cases are replicated without understanding the specific business context, leading to solutions that don’t align with actual business needs.

To avoid this, ensure management support from the outset, align project goals with business objectives, and work closely with business departments to share both success and risk.

III. The Three Pillars of Digital Transformation

1. Organization

The first and most critical factor in the success of digital transformation is "organization," not products or other elements. Success starts with organizing people around a shared goal and vision.

2. Products

The second core pillar is products, which must directly support business goals. Product value is measured not by internal metrics but by the extent to which it contributes to business outcomes.

3. Capabilities

Building capabilities is different from creating products. Capabilities provide ongoing value and are the foundation for future innovations.

Conclusion

Digital transformation is a vast subject with many facets. This article provides a product manager’s perspective, identifying key points to consider and encouraging further thought and exploration.