The Focus, Difficulties, and Pathways of Digital Transformation for Small and Medium sized Enterprises

In recent years, with the rapid development and wide application of digital technology, the enabling role of the digital economy in China's various industries has become increasingly prominent. The deep integration of the digital economy and the real economy has entered the fast lane, further enhancing the resilience and vitality of China's economy, and releasing strong momentum to promote Chinese path to modernization. The Party and the government attach great importance to the integrated development of the digital economy and the real economy. General Secretary Xi Jinping pointed out that we need to promote the integrated development of the digital economy and the real economy, grasp the direction of digitization, networking, and intelligence, promote the digitization of industries such as manufacturing, service, and agriculture, and use new Internet technologies to comprehensively and fully transform traditional industries.In recent years, with the rapid development and wide application of digital technology, the enabling role of the digital economy in China's various industries has become increasingly prominent. The deep integration of the digital economy and the real economy has entered the fast lane, further enhancing the resilience and vitality of China's economy, and releasing strong momentum to promote Chinese path to modernization. The Party and the government attach great importance to the integrated development of the digital economy and the real economy. General Secretary Xi Jinping pointed out that we need to promote the integrated development of the digital economy and the real economy, grasp the direction of digitization, networking, and intelligence, promote the digitization of industries such as manufacturing, service, and agriculture, and use new Internet technologies to comprehensively and fully transform traditional industries.

In 2021, the "14th Five Year Plan for the Development of Digital Economy" proposed to "deepen the implementation of the digital economy development strategy, continuously improve digital infrastructure, accelerate the cultivation of new business forms and models, and achieve positive results in promoting digital industrialization and industrial digitization. The report of the 20th National Congress of the Communist Party of China clearly pointed out the need to accelerate the development of the digital economy, promote the deep integration of the digital economy and the real economy, and create a digital industry cluster with international competitiveness.

With the deep integration of digital technologies such as the Internet, big data and artificial intelligence with the real economy, the penetration rate of digital economy in the three industries has increased year by year, and the development of industrial digitalization has accelerated in depth. In 2022, the digital economy of agriculture, industry, and service industries in China will account for 10.5%, 24.0%, and 44.7% of the industry's added value, respectively. The scale of industrial digitization will reach 41 trillion yuan, accounting for 33.9% of GDP.

The new generation of digital technology not only promotes China's economic development at the macro level, but also drives the digital transformation of enterprises at the micro level, creating unprecedented opportunities for innovative development of enterprises. In the wave of digital economy, special attention should be paid to the digital transformation of small and medium-sized enterprises. Small and medium-sized enterprises are an important component of China's national economy, playing an irreplaceable role in economic growth, technological innovation, tax payment, and employment absorption.

As of the end of 2021, the number of enterprises in China reached 48.42 million, of which over 99% were small and medium-sized enterprises. At the end of 2018, China's small and medium-sized enterprises employed 233 million people, accounting for 79.4% of all enterprise employees, and owned assets of 40.26 trillion yuan, accounting for 77.1% of all enterprise assets. For small and medium-sized enterprises, digital technology provides assistance in coping with external shocks and enhancing competitiveness.

On the one hand, the construction of intelligent software, hardware or platforms can help solve the pain points and difficulties faced by small and medium-sized enterprises, and improve their production and management efficiency; On the other hand, digital technology helps small and medium-sized enterprises to achieve networked collaboration in the upstream and downstream of the industrial chain, enhancing their resilience and competitiveness in development. With the advancement of cutting-edge digital technology entering the inclusive stage, the technological dividend is sinking and benefiting small and medium-sized enterprises, and digital transformation has become an inevitable trend for the development of small and medium-sized enterprises.

In fact, the Party and the government attach great importance to the digital transformation of small and medium-sized enterprises. Table 1 lists a series of policies aimed at promoting the digital transformation of small and medium-sized enterprises in China. The policies introduced by the Party and the government aim to solve the financing difficulties and technological lag faced by small and medium-sized enterprises in the process of transformation from multiple dimensions, and encourage them to carry out digital transformation through policy guidance. Although the government has introduced a series of supportive policies, there are still many stubborn pain points and difficulties in the digital transformation of small and medium-sized enterprises in China. Compared to large enterprises, small and medium-sized enterprises generally have smaller scales, weaker discourse power in the industrial chain, greater financing constraints, and weaker risk resistance capabilities.

Table 1: Relevant Policies of the Party and Government to Support the Digital Transformation of Small and Medium sized Enterprises

In addition, small and medium-sized enterprises often lack a clear understanding of digital transformation, and their assessment of the costs and long-term benefits of digital transformation is not accurate enough, making it difficult to overcome obstacles to digital transformation. In view of this, the author will focus on empowering digital transformation and upgrading of small and medium-sized enterprises, and conduct in-depth analysis on the current situation, focus, difficulties, and paths of digital transformation of small and medium-sized enterprises, providing decision-making references for accelerating the digital transformation of small and medium-sized enterprises in China and promoting the deep integration of digital economy and real economy.

Enterprise digital transformation is the comprehensive integration of enterprise management and digital technology. Through the digitization of various elements and links of enterprise activities, it promotes the transformation of business processes and production methods, optimizes the allocation of factor resources, and helps enterprises achieve comprehensive improvement in operational efficiency. Small and medium-sized enterprises play a prominent role in China's economic development, and promoting their digital transformation is conducive to cultivating new economic drivers and promoting stable economic and social development.

In order to comprehensively understand the current situation of digital transformation of small and medium-sized enterprises in China, the author analyzed the current situation of digital transformation of small and medium-sized enterprises in China using the data from the 2020 "Evaluation of Business Environment for Ten Thousand Private Enterprises" survey. In 2020, the All China Federation of Industry and Commerce organized a survey of 21781 small and medium-sized enterprises, conducting detailed research on the current situation, problems faced, and evaluation of relevant policies in the digital transformation of enterprises, which is authoritative and representative.

（一）Overall, the digital transformation of small and medium-sized enterprises in China is still in its infancy

According to data, in 2020, less than one-third (32.9%) of small and medium-sized enterprises implemented digital transformation strategies, 40.0% of small and medium-sized enterprises currently have no digital transformation plans, and 18.6% of enterprises only plan to initiate digital transformation (see Figure 1); According to survey data in 2021, 44.8% of small and medium-sized enterprises have implemented digital transformation strategies, an increase of 11.9 percentage points from 2020, but still not exceeding half.

Based on the above data, the author believes that China's small and medium-sized enterprises have made positive progress in digital transformation. More and more enterprises have a sense of transformation and are beginning to invest in and explore digital transformation. However, overall, the digital transformation of China's small and medium-sized enterprises is still in its infancy.

Figure 1 Overall Status of Digital Transformation of Small and Medium sized Enterprises

（2） The proportion of digital transformation of small and medium-sized enterprises in the information industry and industry ranks among the top

From the perspective of different industries, the process and trend of digital transformation of enterprises vary due to differences in development foundations, technological requirements, etc., and the imbalance in the degree of digital transformation between industries is more obvious. Specifically, the digital transformation level of information transmission, software and information technology services, and industry ranks among the top, with the proportion of digital transformation of small and medium-sized enterprises in these industries all exceeding 40%. The proportion of digital transformation of small and medium-sized enterprises in agriculture, forestry, animal husbandry, and fisheries is in the middle, while the proportion of digital transformation of small and medium-sized enterprises in the accommodation industry, public utilities, and real estate industry is at a relatively low level.

（3） First tier cities such as the Yangtze River Delta and Pearl River Delta are leading regions for digital transformation of small and medium-sized enterprises

1. Digital transformation of small and medium-sized enterprises in different regions

Looking at different regions, the digital transformation of small and medium-sized enterprises in China shows a gradually weakening trend from east to west. The eastern region has the highest proportion of small and medium-sized enterprises that have undergone digital transformation, followed by the central region, the northeast region again, and the western region the lowest, with proportions of 37.2%, 33.7%, 29.6%, and 28.3%, respectively. The significant gap between the eastern and western regions is the result of multiple factors working together.

For the western region, the lagging construction of digital infrastructure and the imperfect system for cultivating digital skills are important factors hindering its digital development. For example, data shows that the number of rural broadband access households in the western region accounts for 25.9% of the total number of rural broadband access households in China, while the number of broadband access households in the eastern region accounts for 45.9% of the total number of broadband access households in China. In addition, information barriers, insufficient talent reserves, and outdated technology have put the western region at a disadvantage in enjoying the digital dividend.

图2  不同行业中小企业数字化转型比例图

2. Digital transformation of small and medium-sized enterprises in the five major urban agglomerations

According to data, the proportion of digital transformation of small and medium-sized enterprises in the Yangtze River Delta, Pearl River Delta, and Beijing Tianjin Hebei urban agglomerations is higher than the national average. Among them, the proportion of digital transformation of small and medium-sized enterprises in the Yangtze River Delta urban agglomeration is the highest, followed by the Pearl River Delta, and the Beijing Tianjin Hebei is the lowest, accounting for 43.0%, 40.1%, and 37.4% respectively. The proportion of digital transformation of small and medium-sized enterprises in the Chengdu Chongqing and Yangtze River Midstream urban agglomerations is lower than the national average, accounting for 34.6% and 31.0% respectively.

The digital transformation of SMEs in the Yangtze River Delta, the Pearl River Delta and Beijing Tianjin Hebei urban agglomerations is outstanding, mainly because the three urban agglomerations have mature and efficient markets, developed and complete infrastructure construction, sufficient digital talent reserves, and the local manufacturing trade and Internet industries are developed, which have advantages in digital transformation. Therefore, the digital level of SMEs is high.

3. Digital transformation of small and medium-sized enterprises in first tier cities

The author further explores the digital transformation of small and medium-sized enterprises in 16 first tier cities, including Beijing, Shanghai, and Guangzhou. According to data, the proportion of digital transformation for small and medium-sized enterprises in seven first tier cities has exceeded 40%, including Hangzhou, Shenzhen, Guangzhou, Ningbo, Shanghai, Beijing, and Suzhou. Among them, the proportion of digital transformation of small and medium-sized enterprises in Hangzhou, Shenzhen, and Guangzhou ranks among the top, with 47.2%, 46.0%, and 44.0% respectively. The proportion of digital transformation for small and medium-sized enterprises in Hefei, Changsha, and Tianjin is relatively low, at 29.7%, 28.6%, and 25.7%, respectively.

Overall, the first tier cities in the eastern coastal areas have obvious advantages in the digital economy foundation, great potential for digital transformation, and have become leading regions for the digital development of small and medium-sized enterprises. With the gradual optimization of the digital economy development environment, the increasingly perfect digital talent training system, and the continuous strengthening of digital technology support, the digital transformation process of small and medium-sized enterprises in first tier cities has entered the "fast lane".

From the above data, it can be seen that although the digital transformation of small and medium-sized enterprises in China has achieved certain results, they are limited by various factors such as cognition, funding, technology, and talent. The digital transformation of small and medium-sized enterprises faces dual challenges from both internal and external sources, and there are still varying degrees of problems such as "unable to transform, unwilling to transform, unable to transform, and afraid to transform".

Figure 3 Proportion of digital transformation of small and medium-sized enterprises in different regions

（1） Insufficient digital knowledge reserves of management and employees

The digital transformation of enterprises is a systematic project that requires the full investment of management, and its success depends to some extent on the digital knowledge reserves of management personnel. According to survey data, 58% of transformational enterprises believe that business managers play an irreplaceable role in driving digital transformation. However, in the process of deepening digital transformation in small and medium-sized enterprises, there are often problems such as insufficient digital knowledge reserves of senior managers and employees, which have a negative impact on the smooth progress of digital transformation.

Firstly, the management of small and medium-sized enterprises lacks sufficient digital knowledge reserves, which makes it difficult for them to make decisions on the selection and application of digital products and services, resulting in blind following of trends. With the iteration and innovation of emerging digital technologies such as "Cloud IoT Big Smart Chain", digital tools and solutions continue to emerge. Some small and medium-sized enterprises follow the trend and purchase emerging digital tools, ignoring their practical application value to the enterprise, resulting in a loss of enterprise profits.

Secondly, although some small and medium-sized enterprises have integrated digital technology into their business operations, their management lacks sufficient understanding of digital decision-making, resulting in issues such as limited application of digital tools, information barriers between departments, data silos, and weak digital driving capabilities for business decision-making.

Thirdly, the success of enterprise digital transformation is closely related to the digital knowledge level of employees. The digital transformation of enterprises involves all aspects of operations, including the transformation of all elements and links of enterprise activities. From determining the digital strategy to implementing the strategy, any link may involve the restructuring and reconstruction of the relationship between "people" and "people", and between "people" and "machines". It requires all employees to have corresponding digital knowledge in order to better cope with the challenges of digital transformation.

（2） The transformation path is unclear and lacks long-term strategic planning

The lack of clear transformation planning is an important factor hindering the digital transformation of small and medium-sized enterprises. According to data, about 60% of enterprises plan to increase digital investment and carry out digital transformation, but more than 80% of enterprises have not yet clarified how to efficiently penetrate digital technology into their business, expand revenue sources, and improve production efficiency. In fact, developing a clear transformation strategy plan is a crucial step that small and medium-sized enterprises need to take in their digital transformation. Enterprises need to consider what practical problems can be solved through digital transformation, where to start implementing digital transformation work, and what are the implementation steps of digital transformation.

However, for small and medium-sized enterprises, the demand for digital transformation is vague and complex, and there are relatively few successful cases of digital transformation that can be referenced, replicated, and promoted in reality. In this practical dilemma, some small and medium-sized enterprises find it difficult to identify the positioning of digital transformation, nor can they clarify the direction and implementation path of transformation, resulting in a stagnation of the pace of transformation, that is, the problem of "not being able to transform" for small and medium-sized enterprises. In addition, small and medium-sized enterprises may also encounter the problem of "not daring to transfer".

Specifically, in the early stages of enterprise digital transformation, the investment cost is usually high, but there are still high risks and uncertainties in the implementation process. If small and medium-sized enterprises do not have a thorough understanding of the importance and necessity of digital transformation, or lack relevant experience and knowledge to plan and execute transformation strategies, it will lead to hesitation and hesitation in digital transformation.

So how should companies develop a path and strategic plan for digital transformation? You can leave a message in the background for consultation or take a look at my past articles: Understanding the Successful Path of Digital Transformation in Manufacturing Industry with One Picture.

Figure 4 Proportion of digital transformation of small and medium-sized enterprises in major urban agglomerations

（3） Lack of key elements to support digital transformation

The digital transformation of enterprises cannot be separated from the support of emerging digital technologies, high-end digital talents, and sufficient financial reserves. However, small and medium-sized enterprises often lack the aforementioned key elements. From the perspective of funding factors, the difficulty and high cost of financing remain important issues that hinder the development and transformation of small and medium-sized enterprises. Lack of necessary funds for the procurement, operation, and maintenance of digital equipment and technology has resulted in small and medium-sized enterprises being unable to advance their digital transformation strategies as they struggle to cook without rice.

From the perspective of talent factors, small and medium-sized enterprises are usually at a disadvantage in the competition for digital technology talents and find it difficult to attract the technical talents needed for transformation. In addition, small and medium-sized enterprises have a small scale and it is difficult to establish a mature and efficient digital talent training system within the enterprise. Even if a company has established a talent training system that focuses more on cultivating basic professional programming skills, neglecting the comprehensive abilities of talents in technological innovation, management and operation, strategic planning, etc. will seriously lag behind the demand for the supply of composite talents needed for transformation.

From the perspective of technological elements, the independent research and development capabilities of small and medium-sized enterprises are weak, and the supporting role of digital technology in enterprise transformation is not easy to play. From the perspective of data elements, the accumulation of data assets in small and medium-sized enterprises is weak, making it difficult to fully realize the potential value of data. At present, most small and medium-sized enterprises are still in the perception stage of data application and lack a data-driven transformation and upgrading path. A data set covering the entire lifecycle and process has not yet been constructed, which can easily form a "data island".

（1） Using external forces to solve strategic planning problems

Small and medium-sized enterprises should develop clear digital transformation strategic plans based on their own characteristics and development needs, and promote the process of digital transformation from the outside to the mainland through both internal and external efforts. Compared to small and medium-sized enterprises, large enterprises have strong reserves of funds, technology, and talent, and have a clearer digital transformation path. They usually use tools such as MES, ERP, CRM to digitize their internal business processes and management processes, and then further layout and build intelligent workshops and digital factories to achieve digital transformation and upgrading. The digital transformation path of small and medium-sized enterprises is often unclear, with insufficient endogenous demand, and insufficient manpower, funding, and technological capabilities to support their independent completion of digital transformation. This means that the digital transformation of small and medium-sized enterprises needs to rely more on external forces and attach great importance to the driving role of the external industry ecology in their transformation.

The digital transformation of small and medium-sized enterprises can give priority to leveraging the networked collaboration of enterprises within industrial clusters, strengthening cooperation with leading enterprises, and promoting digital transformation through upstream and downstream matching, clustering and incubation, open application scenarios, and technology diffusion. Based on the above understanding, the government has introduced a series of supporting policies.

For example, in June 2023, the Ministry of Finance and the Ministry of Industry and Information Technology of the People's Republic of China issued a notice on the pilot work of digital transformation of small and medium-sized enterprises in cities, proposing to support small and medium-sized enterprises to strengthen cooperation with chain owners and leading enterprises, utilize the platform capabilities and data foundation of chain owners and leading enterprises, and achieve multi-faceted collaboration in order, design, production, supply chain, and other aspects.

While relying on external support, small and medium-sized enterprises should enhance their internal strength in transformation, and plan their transformation path based on their own characteristics, development direction, and market demand. In the initial exploration period of transformation, they can focus on system onlineization and business digitization. In the long run, their development needs to shift from data connectivity and integration to deep application of data, deeply explore the value of data, apply data to assist enterprise strategic decision-making and business optimization, and achieve intelligent production.

Figure 5 Proportion chart of digital transformation of small and medium-sized enterprises in some first tier cities

（2） Multi party support to solve funding difficulties

Although the inherent challenges faced by small and medium-sized enterprises, such as difficult and expensive financing, have been alleviated with policy assistance, insufficient funding remains an important obstacle to their digital transformation. To effectively accelerate the process of digital transformation of small and medium-sized enterprises, government departments can strengthen financial support, leverage leading enterprises and social capital to increase investment, and "add momentum" to the digital transformation of small and medium-sized enterprises.

One is to strengthen policy support. Strengthen the coordination of special fiscal funds, and organically link the digital transformation policies for small and medium-sized enterprises with the support policies for "specialized, refined, unique, and new" enterprises and the special policies for the development of small and medium-sized enterprises; Provide policy tools such as special loans and loan interest subsidies, and increase financial support for the digital transformation of small and medium-sized enterprises.

The second is to develop supply chain finance, guiding large enterprises to drive the digital transformation of the industrial chain and small and medium-sized enterprises upstream and downstream of the supply chain; Promote financial institutions to rely on industry chain and supply chain "chain owners" enterprises to carry out financial businesses such as accounts receivable pledge loans, inventory financing, and advance payment financing, in order to alleviate the financing difficulties faced by small and medium-sized enterprises.

The third is to encourage and guide financial institution funds and social capital to flow into the digital transformation field of small and medium-sized enterprises. Utilize venture capital and angel investment to activate idle funds in society, guide financial institutions and social capital to support the digital transformation of small and medium-sized enterprises.

（3） Facing reality to solve technical problems

Small and medium-sized enterprises should choose appropriate digital technology tools based on their own development situation and industry attributes to solve the technological challenges they face during the transformation process. At present, small and medium-sized enterprises are facing problems such as funding shortages, talent shortages, and technological barriers. Their digital transformation should not be greedy for the big picture, but should focus on solving the practical problems and key challenges they are facing at this stage, paying attention to weak links in the management process, and paying attention to SaaS (Software as a Service) products with relatively low procurement costs and usage barriers that are suitable for enterprise business scenarios.

Statistical data shows that small and medium-sized enterprises have a high acceptance of SaaS, with 58.1% of enterprises believing that business growth SaaS can bring 10% or more additional revenue to the enterprise. This indicates that SaaS has a high maturity in application among small and medium-sized enterprises and can effectively assist in their digital transformation.

（4） Multiple ways to solve talent problems

With the advent of the digital economy era, various industries are accelerating their digital transformation, and the demand for digital talents in enterprises is rapidly increasing. However, the supply of digital talents is in short supply, and there is a shortage of compound digital talents who understand both technology and business. Small and medium-sized enterprises are at a disadvantage in talent competition.

Based on this, small and medium-sized enterprises can deepen cooperation between schools and enterprises through the establishment of training bases and other means, build a talent training system, and explore high-quality and high potential composite talents in advance. Traditional small and medium-sized enterprises are limited by resources and scale, and it is often difficult to establish a comprehensive talent training system within the enterprise.

Therefore, small and medium-sized enterprises can use external institutions to cultivate composite digital talents who understand both technology and business. In addition, from the perspective of talent management, small and medium-sized enterprises may face phenomena such as the loss of excellent digital talents trained internally and the "mismatch" of talents introduced with high salaries. For this reason, small and medium-sized enterprises should establish a more flexible and humane digital personnel management mechanism, "not seeking everything, but seeking to use it", and better play the role of talents.

Caijiang Intelligence is well aware of the importance of building a talent team for the development of enterprises and society. It has been continuously striving to deepen the synergy between industry and education and improve the effectiveness of practical education, actively providing platforms and services for employment practice and skill training for social talents.

In May 2023, Caijiang Intelligence and Aerospace Technology Holdings Group established the AIRIOT IoT platform training base, carrying out ecological cooperation on the AIRIOT IoT platform, actively collaborating with universities, manufacturing enterprise customers, and industry partners to cultivate composite talents who master IT technology, IoT technology, and production and manufacturing skills. In August, the Caijiang Intelligent and Industry Education Integration Characteristic Incubator, Cancan Youth Innovation and Entrepreneurship Space, signed a strategic cooperation agreement to jointly build an "Intelligent Manufacturing" college student employment and entrepreneurship service platform. In September of the same year, Li Qiang, the founder of Caijiang Intelligent, was invited to attend the conference and hired as a mentor at the Zhixing Academy of the School of Economics and Management at Shanxi University. He is committed to making contributions to the economic development and industrial talent cultivation of the central and western regions, and actively undertakes the important social responsibility of injecting momentum into the development of the national manufacturing industry.

（1） There are significant differences in the digital transformation path between small and medium-sized enterprises and large enterprises

Enterprise digital transformation is a complex system engineering that involves business process improvement, product direction planning, organizational structure adjustment, and operational model upgrading. Enterprises need to develop digital transformation plans and paths that are highly compatible with their own characteristics and development needs.

Due to significant differences in business models, organizational structures, and business logic between small and medium-sized enterprises and large enterprises, their digital transformation paths are vastly different.

From a practical perspective, large enterprises usually have a good foundation in information technology. Therefore, when promoting digital transformation, they should focus more on "digital upgrading", that is, upgrading and transforming traditional information systems such as ERP, CRM, OA, etc., and upgrading mature information software into more efficient digital tools, such as applying big data platforms, cloud computing, etc., to achieve digital transformation of enterprises at low cost and high speed, better meeting the needs of large enterprises for data connectivity, intelligent operation, and decision optimization.

Figure 6: Path Map of Digital Transformation for Small and Medium sized Enterprises

Unlike large enterprises, for small and medium-sized enterprises that mainly focus on offline business and have weak information and digital capabilities, digital transformation presents obvious phased promotion characteristics of equipment and business digitization, data assetization, and management decision digitization. Specifically, the first stage of digital transformation for small and medium-sized enterprises is the digitization of equipment and business, which is the foundation for subsequent transformation.

At present, the traditional business models of some small and medium-sized enterprises are in a state of system fragmentation and data separation. Achieving standardization of business processes and data connectivity is the first step in digital transformation.

At this stage, the key is how to choose SaaS products that are suitable for enterprise business scenarios. SaaS products have the characteristics of low budget cost, low risk, and low internal resource requirements, making them an important entry point for digital transformation of small and medium-sized enterprises. They help improve the coordination of organizational structure, personnel management, financial management, and other aspects of small and medium-sized enterprises.

Caijiang Intelligent provides industrial SaaS solutions for key business processes of manufacturing enterprises, covering industrial SaaS applications such as manufacturing collaboration, supplier collaboration, equipment management, quality management, warehouse management, data collection, and industrial big data analysis.

Caijiang SaaS applications can not only solve the pain points of traditional software in terms of security, scalability, and ease of use, but compared with traditional industrial software, cloud based SaaS industrial software has more convenient interaction, on-demand functionality, dynamic expansion, short deployment cycle, fast delivery, and low cost, enabling enterprises to apply transformative technologies faster and easier than ever before.

The second stage is the data assetization stage. With the evolution of digital transformation in small and medium-sized enterprises, data has gradually become a key strategic asset for enterprises. However, under traditional IT architecture, it is easy to form "data islands" and it is difficult to fully utilize data-driven digital transformation for enterprises.

At this stage, enterprises will further integrate underlying data, strengthen data integration, and conduct in-depth data mining. After the originally fragmented underlying data connectivity, the digital center serves as a comprehensive scheduling and sharing platform for enterprise IT resources, comprehensively collecting and centrally managing data from different systems, and forming enterprise data assets after refining and analyzing them.

The third stage is the digitalization stage of management decision-making. At this stage, enterprise needs to shift from data connectivity and integration to data applications, further considering long-term development strategies such as deep mining of data value, industrial chain collaboration, and intelligent production, in order to reduce costs and improve efficiency.

The digital transformation in this stage can be realized through access to the industrial Internet platform and the construction platform of industry leading enterprises. Industry leaders provide equipment sharing, personnel collaboration, and other services to small and medium-sized enterprises by building platforms. Small and medium-sized enterprises can achieve lower costs and shorter cycles of digital transformation through technological empowerment, supply chain empowerment, and platform empowerment.

Caijiang Industrial Internet Platform has accumulated solutions and application cases in many industries and fields such as new materials, electronics, machining, textile, rare earth permanent magnet, food processing, chip design and manufacturing, injection molding, etc. It provides dozens of standard industrial applications, advanced management models, data analysis models for the application market, and summarizes hundreds of typical application scenarios in the industry. At the same time, software and hardware providers and solution providers that actively link the industrial Internet industry are committed to building an industrial Internet ecosystem, accelerating the empowerment of manufacturing enterprises, and helping upgrade traditional industries.

（2） Specific measures for digital transformation of small and medium-sized enterprises

Firstly, establish an online management system to promote digitalization of equipment and online processes. As mentioned earlier, the digitization of equipment and the onlineization of business processes are the prerequisites and foundations for small and medium-sized enterprises to carry out digital transformation. With the development and application of emerging digital technologies such as big data, the Internet of Things, cloud computing, and artificial intelligence, enterprises have put forward higher management requirements for intelligent equipment operation and predictive maintenance. Traditional equipment often has problems such as inability to connect with production data and delayed optimization. Enterprises need to carry out digital transformation in terms of data connection, data visualization, equipment data analysis, and equipment adaptation for underlying equipment according to their own business development needs. At the same time, small and medium-sized enterprises can also build online management systems to achieve data connectivity and sharing among departments through standardization of data and processes between systems, breaking down "data silos".

The Caijiang Industrial IoT Platform CJ-AIOT, as a low code IoT tool platform, can achieve functions such as access implementation, centralized management, remote operation and maintenance, data storage, indicator display and analysis, visual display, monitoring and early warning, and remote control of massive IoT devices. The platform has accumulated rich application experience in multiple segmented industries and provides customized services to meet different needs.

In addition, small and medium-sized enterprises can use the CJC-EAM equipment management system to achieve cloud based interconnection and monitoring of equipment assets. Users can perform factory equipment asset management, equipment maintenance, equipment inspection management, remote fault diagnosis, predictive maintenance, and other operations on mobile devices at any time; Improve equipment OEE, reduce downtime due to malfunctions, and enhance equipment utilization.

Secondly, utilizing data elements to drive business digitization. Business digitization is one of the key links in digital transformation. In the second half of the Internet development, it has become an inevitable choice for enterprises to lead production and business through digital operations. With the development of digital technology, data has become a key production factor, and the cost of obtaining data is getting lower and lower. The types and quantities of data are rapidly expanding. How to deeply integrate and explore the value of data, improve business management level, is crucial for the development of enterprises. Enterprises can use a data center to share, connect, and manage internal data, unify data standards and caliber, better drive business decisions, and improve operational efficiency.

However, compared to large enterprises, small and medium-sized enterprises still face problems such as high costs in utilizing data elements. On the one hand, the government's openness and sharing of public data are insufficient, and small and medium-sized enterprises still face certain difficulties in obtaining external data; On the other hand, building a data center is time-consuming, costly, and difficult for small and medium-sized enterprises to afford.

In response to the above issues, the government should further improve relevant policies, clarify the methods and scope of obtaining and using public data, ensure the legal collection and utilization of public data, and support small and medium-sized enterprises in using data-driven digital transformation from the perspectives of funding and technology.

Thirdly, apply low-risk, low-cost, and highly scalable SaaS products to achieve data integration and utilization. With the development of digital technology, general-purpose technologies represented by the "Cloud IoT Smart Chain" have undergone iteration and innovation, resulting in numerous standardized products. This has led to a rapid reduction in the cost of acquiring digital technology and a more affordable price. The digital technology dividends that were originally only enjoyed by large enterprises are gradually sinking and benefiting a large group of small and medium-sized enterprises.

At this stage, small and medium-sized enterprises should choose the most cost-effective SaaS products based on their core development needs and stage business focus, connect the originally fragmented underlying data, and promote the transformation and upgrading of small and medium-sized enterprises in digital production, digital management, digital marketing, and other aspects.

From the development process of digital transformation of small and medium-sized enterprises, those in the stage of digitalization of equipment and business can apply essential SaaS products such as OA and IM (1). As the business processes and organizational structures of small and medium-sized enterprises become increasingly mature, the demand for SaaS products such as HRM and ERP for small and medium-sized enterprises in the data assetization stage is increasing. In the digital stage of management decision-making, utilizing the accumulated and accumulated data within the enterprise to effectively assist decision-making will become a key focus. Therefore, small and medium-sized enterprises should attach importance to the application of SaaS products such as intelligent BI and MOM systems.

Fourth, the industrial Internet platform is used to promote the integration, visualization and intelligent analysis of enterprise data connectivity, and improve the level of enterprise management and decision-making. Industrial Internet is an important carrier for data management, modeling and analysis, and application innovation. In 2015, the State Council issued the Guiding Opinions on Actively Promoting the Action of "Internet plus", proposing to "study the industrial Internet network architecture system and build an open national innovation test and verification platform". The industrial Internet rose to the national policy level for the first time and gradually became an important engine for enterprise digital transformation.

Small and medium-sized enterprises rely on Internet platform channels, PaaS services and SaaS applications to seek a complete set of digital upgrading solutions to meet their digital upgrading needs in different business scenarios, which is one of the best paths for digital upgrading of small and medium-sized enterprises (6). Industrial Internet can provide SMEs with massive data connections, "customized" digital solutions, business scenario oriented apps, etc., thus significantly reducing the technical threshold and capital costs of SMEs' "cloud based digital intelligence", and promoting the overall process of SMEs' digital transformation.

Fifth, rely on the platform capabilities of leading enterprises to achieve digital empowerment. Industry leaders and leading enterprises take the lead in building a digital industry platform, establishing an experience promotion and sharing mechanism for digital transformation, and forming a batch of replicable and promotable digital transformation solutions. Encourage leading enterprises to lead industrial clusters to carry out networked collaboration, create new models such as data exchange, equipment sharing, and capacity cooperation, effectively collaborate and deeply empower small and medium-sized enterprises, and make up for the lack of resources and capabilities of small and medium-sized enterprises.

After the formation of the digital industry platform led by leading enterprises, SMEs can, on the one hand, apply the Internet platform built by leading enterprises in the industry chain and supply chain to integrate into the core enterprise ecosystem, strengthen connectivity and cooperation, and achieve collaborative transformation of large, small and medium-sized enterprises; On the other hand, digital transformation solutions output by industry leaders can be applied to enjoy low-cost SaaS products or PaaS services with low internal resource requirements, accelerating the improvement of one's own digital level.

Sixth, improve supporting measures and strengthen the digital talent team. Establish a sound talent training system, improve talent training programs, and focus on cultivating composite talents who possess both digital technology capabilities and industry expertise, providing talent support for the digital transformation of small and medium-sized enterprises.

Firstly, to achieve pre selection of talents, promote deep cooperation between schools and enterprises, implement targeted talent training cooperation between schools and enterprises, and jointly build industry university research bases. Enterprises can deepen cooperation between schools and enterprises through various means such as co building training bases and campus talent selection competitions, forming a "reservoir" mechanism for digital transformation talents, consolidating the foundation of a composite digital talent team, and meeting the employment needs of small and medium-sized enterprises.

Secondly, optimize talent allocation and reasonably match job requirements with talent capabilities. Optimize the allocation of digital talents within the enterprise, fully tap into the potential of existing talents, and improve efficiency. Thoroughly analyze the pain points and difficulties of enterprise development, determine the job capability requirements based on the digital transformation strategy, and optimize the matching between job capability requirements and talent capabilities. Finally, we will focus on improving the talent service system, building a "green channel" for digital talents, and addressing the needs of digital talents, especially high-level digital talents, in terms of household registration, social security, spouse employment, and children's enrollment. We will solve their worries and fully release talent benefits.

Source: New Industry Network

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Caijiang Intelligence is an innovative technology company dedicated to empowering the manufacturing industry with next-generation information technology. Its headquarters is located in Shanghai and it has branch offices in Anhui, Inner Mongolia, and other places.

Caijiang Industrial Internet Platform has accumulated solutions and application cases in many industries and fields such as new materials, electronics, machining, textile, rare earth permanent magnet, food processing, chip design and manufacturing, injection molding, etc. It provides dozens of standard industrial applications, advanced management models, data analysis models for the application market, and summarizes hundreds of typical application scenarios in the industry. At the same time, software and hardware providers and solution providers that actively link the industrial Internet industry are committed to building an industrial Internet ecosystem, accelerating the empowerment of manufacturing enterprises, and helping upgrade traditional industries.