Digital transformation for traditional companies: where to start

"Digital transformation" has been said so often that it has lost much of its meaning. Yet many companies still do not know where to start. Among the traditional manufacturers, trading companies, and professional service firms we work with most often, fewer than 20% have pushed digital transformation through systematically. Most are still at an early stage: a website, DingTalk, and one ERP system.

Transformation is not a system installation. It is a process change.

The most common mistake is equating "buying software" with "completing digital transformation." The result:

• Systems are bought but not used. Employees find them inconvenient and keep working in Excel.
• Data goes in but does not come out. Finance still assembles reports by hand.
• New and old systems conflict. CRM customers do not match ERP records.

The essence of digitalization is using data to drive decisions, not using software to replace paper. If a process is digitized but decisions are made the same way, the transformation has failed.

Three advantages traditional companies already have

Many owners assume they are "not technical" and cannot compete with internet companies. In fact, traditional companies hold three resources that internet companies envy:

1. A stable customer base. Internet companies spend heavily to buy traffic. You already have hundreds or thousands of long-standing customers.
2. Accumulated industry know-how. Thirty years of experience is data plus intuition. AI cannot learn it quickly.
3. Physical assets. Factories, warehouses, and stores are the most concrete settings for digitalization.

Where to start: three high-ROI entry points

With a limited transformation budget, start with these three.

1. A customer data platform

Consolidate customer information scattered across salespeople's personal WeChat accounts, spreadsheets, and inboxes into one system. In our experience, this step alone can raise the utilization of sales leads by 2–3×. Customers lost when a salesperson leaves become findable again.

2. An internal knowledge base

Turn senior engineers' experience, past project problems and solutions, and customer feedback into structured documents. In the projects we have seen, new employees can shorten their ramp-up from six months to two months. This is an invisible cost saving.

3. Marketing automation

Start with the simplest email campaigns and WeCom group broadcasts, then build a closed loop of customer segmentation and automated content delivery. In our experience, the return on this work is usually 5–10×.

What to avoid

The failures we have seen over the past three years cluster around a few causes:

• Leadership is not involved. Transformation is a leadership project, not an IT department project.
• Chasing a big, all-in-one system. Companies that try to install an ERP and solve everything at once almost always fail.
• Ignoring data governance. Bad data into the system still produces bad decisions.
• No training or enablement. If employees do not learn the new tool, even an expensive system becomes decoration.

A phased path

For a traditional company with annual revenue of RMB 10–100 million, we suggest this rhythm:

1. Year 1: customer data and internal knowledge capture; budget 0.5–1% of annual revenue.
2. Year 2: process automation and digital marketing; budget 1–1.5% of annual revenue.
3. Year 3: intelligent decisions based on the accumulated data; budget 1–2% of annual revenue.

The hardest part of digital transformation is never technology. It is people. Anything technology can do or buy is not a moat. The real moat is whether the company genuinely wants to change how it works. Once that question is settled, the rest is execution.

Sources and caveats

The original Chinese article did not include a source list. Its figures come from the editorial team's project experience and a client-reported case, not an independent survey or audit. The Jiangsu Guokai figures are one client's reported results over 12 months and are not a guarantee that another company will achieve the same. Budget percentages are planning rules of thumb, not quotes. Results depend on market, team, data quality, and execution.

1. Lingyi Information editorial team, project observations from the three years before publication (2022–2025). No public URL.
2. Jiangsu Guokai, client-reported 12-month results, as cited in the original Chinese article. No public URL; not independently audited.
3. Lingyi Information, "数字化转型浪潮下，传统企业如何抓住机遇," 30 August 2025. czlytech.com/news/digital-transformation-traditional.html.