A Study On The Impact Of Digital Transformation On The Financial Performance Of Environmental Companies

Since our country proposed the "National Big Data Strategy",policies related to digital economic development have continuously deepened and implemented.The country has successively issued a series of policies such as the "Notice on Promoting the Accelerated Development of Industrial Internet","Action Plan for Promoting the Development of New Economy by Moving to the Cloud and Using Data to Empower Intelligence",and the "14th Five-Year Plan for the Development of the Big Data Industry".The position of the digital economy in the national economy has become increasingly important.Especially under the impact of the COVID-19 pandemic,digital transformation has become an inevitable trend for various industries to respond to the impact of the pandemic and to develop rapidly.In this context,the environmental protection industry is also gradually transforming towards the direction of intelligence,digitization,and intelligence,in order to gain a leading development advantage.WELLE Environmental Group has followed the trend of economic development and started to build a team to explore "smart environmental protection methods" for operational projects to reduce costs and increase efficiency since 2016.In 2019,it began its journey of digital transformation.This article takes WELLE Environmental Group as the research object,based on the theoretical framework of value chain theory,process reengineering theory,and technological innovation theory,to clarify the necessity and path of digital transformation,the influencing factors and evaluation methods of financial performance.From the three aspects of cost reduction,efficiency enhancement,and technological innovation,the impact mechanism of WELLE Environmental Group’s digital transformation on financial performance is analyzed,and the industry background and transformation motives of its digital transformation are explored.It is found that it has transformed from management digitization,operation digitization,and design digitization.At the same time,referring to the financial performance evaluation index system formulated by relevant national departments and scholars,this article constructs a financial performance evaluation index system,and analyzes WELLE Environmental Group’s financial indicators before and after the transformation from four aspects:profitability,operating capability,solvency,and development capability,and compares them with the industry average to explore the impact of digital transformation on financial performance.This article finds that the digital transformation of WELLE Environmental Group has improved its financial performance by reducing costs,increasing efficiency,and promoting technological innovation.After undergoing digital transformation,its overall financial performance is at a good level in the industry,but has been impacted by the COVID-19 pandemic.At the same time,the analysis reveals issues in WELLE Environmental Group’s financial performance,including significant cost increases and poor liquidity of accounts receivable.Based on this,sustainable development recommendations are proposed,including relying on digital transformation to control project budgets and optimize business processes to reduce costs;improving paymentrelated mechanisms and establishing a sound customer credit file to strengthen payment collection;and promoting technological innovation through improving systems,funding,talent assurance mechanisms,and optimizing innovation cooperation mechanisms,thereby deepening digital transformation.This article aims to further enrich research on the impact of digital transformation on financial performance and provide reference for other enterprises in the environmental protection industry to carry out digital transformation.