Thriving Together for a Digital Future
Digitalization has become a new blue ocean for industries and is shifting digital productivity from quantative to qualitative.
Civilization has evolved with incredible momentum. We have gone from slash-and-burn farming to intensive agriculture, from the industrial revolution to a society built on information, and now one built on intelligence. Throughout this long process of development, people have been a nonstop source of new, enduring ideas, paving the way for a rich and vibrant civilization. Along the way, with every step of technological innovation, we have witnessed leaps in productivity. At its essence, the development of our society is a result of these leaps.
In this new age of digital transformation, the ability to change is key to long-term growth. Digital transformation is one of the most widely accepted, most definite trends today. It is common ground for countries, enterprises, and organizations, presenting both opportunities and challenges for industries and the world at large. Backed by increasingly mature digital infrastructure, digital technology is redefining productivity, driving a shift from quantity to quality, and gradually becoming the key engine for socioeconomic development. The time is ripe to thrive with digital.
Most enterprises these days are actively looking into digital transformation, both to keep pace with the digital economy and make the most of new opportunities. Of course, going digital does not happen overnight. The process is fraught with all manner of twists and turns, but there's always light at the end of the tunnel.
Huawei's digital transformation process has gone from starting up, then scaling up, and now we are leading the industry. The journey has been a hard one, but also joyful. Over nearly 10 years of digital transformation, we have significantly improved our capabilities in domains like R&D, manufacturing, sales, delivery, and finance. Throughout this process, we have had to redefine productivity and production relations, restructure our business, and incorporate a wide array of changes into our management systems. This has helped us to cultivate the organizational capabilities we need to support our ongoing development, while gaining some experience and new ideas along the way.
At its essence, digital transformation is driven by strategy, not technology. Any successful digital transformation should, first and foremost, serve to fulfill an organization's strategic vision and predefined business goals. During the digitalization process, companies have to incorporate new tools and technologies as needed to serve their strategic goals and business design, and then drive shifts in their business models, culture, organization, and workforce.
In 2017, Huawei put forward its new vision – bringing digital to every person, home and organization for a fully connected, intelligent world. In the same year, we also laid out our goals for digital transformation. Internally, all business domains would be digitized and turned into services, and we would break down information siloes across domains to boost operational efficiency and stay ahead of the industry. Externally, our goal was to make doing business with customers simpler, more efficient, and more secure to improve customer satisfaction.
Digital transformation needs to be championed by top management. It is a complicated, systematic, and in-depth process. If the transformation is not aligned with the organization's overall vision and culture, then digital solutions alone will not create any value.
Data governance is a huge challenge for enterprises these days. To start with, massive amounts of data cannot be readily collected. And furthermore, the sheer number of vertical business systems in an organization has given rise to considerable data islands. Only through systematic data governance can data flow smoothly across an organization. And then, by digitizing operations and building digital platforms, can that data be cleaned, visualized, and aggregated to lay the foundation for digital transformation.
First, data needs to be traceable and standardized. Take coal mining, for example. Huawei's Coal Mine Team and CHN Energy worked with partners to develop MineHarmony, a next-generation, industrial Internet operating system specifically designed for mining equipment. This operating system provides a shared language for different types of mining equipment to connect, work together, and incorporate intelligence. At the end of 2022, this system has been deployed in over 3,300 sets of equipment across more than 10 coal mines, helping them fully digitize their management and operations.
Second, data has to be integrated and paired. The digitization of objects, rules, and processes translates operational activities into usable data. Huawei's payment accounting process is a good example. After going digital, our IT system can automatically detect and integrate all documents, and data across multiple dimensions can be automatically paired within minutes. This has led to massive improvements in payment processing efficiency.
Finally, data has to be aggregated and shared. With data lakes and warehouses, we have laid the data-layer foundations for taking our company digital. Almost all of Huawei's financial and business data is now managed in data lakes, so our Business and Finance teams share the same sets of data in real time, based on which they can design and develop derivative applications.
To drive productivity with data, organizations need to put intelligence to use, making data on-demand, easier to understand, and actionable. This is the ultimate destination for transforming corporate management. Machines and equipment should be able to perform analysis and make judgements based on the data, information, and knowledge available to them. This enables automated decision-making and execution for smaller issues. For major issues, systems can escalate to people in charge, informing the analysis and decision-making process.
Over the past five years, Huawei has been implementing a strategy to make our finance knowledge more structured, explicit, and integrated. Step by step, we have crafted a precise knowledge graph that helps Finance digitally store, manage, and pass on expertise. Today, by referencing the knowledge graph, finance teams in the field can find all the answers they need, anytime and anywhere.
Scheduling automation for production lines is another good example of intelligence put to use. At Huawei, we have digitalized key manufacturing elements such as workshops, production flows, equipment, and procedures, and have created mathematical and data models for different scheduling scenarios. This has enabled us to phase out manual scheduling through automation. With scheduling now automated, we have been able to greatly increase production flexibility and efficiency.
Working for your own benefit is necessary to survive, but working for the benefit of others is key to ensuring long-term growth. Both enterprises that are going digital and enterprises that are helping others go digital will have huge addressable markets and economic benefits. Now and in the distant future, as the power of digitalization is unleashed, boundaries between enterprises will fade. Dots will connect into lines, then into networks, and together they will bring about a new era of industrial interconnectivity.
Huawei is committed to working with customers to explore the way forward for digital transformation. We are working to build digital infrastructure that has the simplest possible architecture and the highest possible quality, that delivers the best possible experience at the lowest possible costs. The goal is to help customers progress along four stages of digital transformation: digitizing operations, building digital platforms, enabling platform-based intelligence, and achieving intelligent operations.
Huawei is driving coordinated development of data transport, computing, and storage capabilities. In terms of connectivity, we are advancing the development of leading 5.5G infrastructure, aiming to build networks that can support over 100 billion connections and deliver a 10-gigabit user experience. In computing, we are focusing on the diverse computational needs of different business scenarios, pushing the capabilities of both general-purpose and AI computing power. At the same time, we are investing nonstop in Huawei Cloud, making it the cloud foundation and enabler of industrial digitalization, to help enterprises migrate and use cloud technology more effectively. We are also working to grow the ecosystem by developing innovative foundational software and going open source with many of our systems. This brings more partners and developers into the fold, helping to cultivate a dynamic and prosperous industry ecosystem.
In addition to building out solid digital infrastructure, Huawei has also formed a number of integrated teams that focus on specific sectors, such as coal mining, public services, electric power, finance, and transportation (airports, rails, roads, waterways, and ports). These teams work with ecosystem partners to integrate digital technology into industrial scenarios. Together, we develop innovative digital products and solutions that meet the specific needs of these scenarios, and help industries truly make the most of digital technology to drive new forms of productivity.
To seize new opportunities, you have to keep up with the times. Today, the fruits of digitalization efforts are apparent. 5G applications are creating incredible value in smart mines. New opportunities are flowing from the assembly lines in smart factories. And a new era of intelligence is taking shape on cranes in smart ports.
One of our manufacturing customers is a great example. Before digital transformation, their business data was spread across dozens of different business systems, with disparate standards and rules for managing that data. Huawei helped them converge their IT data with the OT data collected from more than 200 types of manufacturing equipment, making their data more transparent and visualizable. Then, by building mathematical models with data collected from production processes, we helped them lay the foundation for digital operations. The data and models have enabled them to rapidly replicate best practices.
We are also paying special attention to SMEs. To better serve their needs, we are working closely with SMEs to extend digitalization into the far-reaching corners of their businesses. We are optimizing channel systems and expanding cooperation with more integration and engineering companies to light the way forward for small- and medium-sized organizations on their digital transformation journey.
While helping enterprises boost efficiency and production capabilities across the board, digital technology is also making education more inclusive. In China, many schools in coastal cities like Shenzhen and inland cities like Yueyang and Tianshui have been setting up smart classrooms. With digital displays and high-speed networks, teachers can use a rich variety of virtual teaching tools to draw and create together with students. These smart classrooms have not only made the learning environment more interactive, they are also giving children in different regions ready access to the best educational resources available.
Behind every leap in digital technology is the willingness to embrace change, giving rise to new vitality.
Underpinning the development of every domain is a strong digital foundation, paving the way for firm and steady steps forward.
Driving the growth of every industry is collective wisdom and strength, spinning out new chapters of potential.
One tree does not make a forest, so Huawei is joining forces with industry partners to drive digital transformation forward. We are doing this in several ways.
First, Huawei is helping develop the broader digital ecosystem by opening up hardware for integration and going open source with software. This allows more partners and developers to take part in the innovation process, producing a more vibrant array of digital products and solutions.
Second, we are increasing investment in our partners. Our guiding principle is to forge partnerships that are interest-bonded, integrity-centric, and rule-based.
And finally, we provide schools with the latest in digital best practices and case studies, give students hands-on digitalization experience, and work together to grow the digital talent pool.
Innovation is an ongoing process, and digitalization is an incredible journey. There are many twists and turns, but determination goes a long way. By putting one step ahead of the next, we have found that the road ahead is not as long as it once seemed. With some resilience and tenacity, together we can seize the day and forge a brilliant tomorrow.
We very much look forward to working with all industries and communities to build a bright digital future and stride towards a more intelligent world, together.