Supporting enterprises in digital transformation

Digital innovation activities, that will take place in the next 5-10 years, have been compressed in the past two years.

The inevitability of the digital transformation trend has been recognised by businesses and they have increased investment in digital technology applications, to help them adapt to and accelerate development, in the unprecedented difficult period.

However, there are still many enterprises, especially small and medium-sized enterprises, that are quite confused about the digital transformation process. Therefore, it is necessary to have orientations and support, to help them stand ready for successful digital transformation.

“Lost” in digital transformation

With the desire to transform into a digital enterprise, Vu Thi Ngoc Anh, General Director of Hong Duc Education Equipment JSC, applied digital transformation to her company’s production and business activities.

Ngoc Anh said that 5-7 years ago when starting to apply digital transformation to her business, many employees could not keep up with the new technology, so they objected to her changes because they thought that it was complicated and they were afraid to start all over again.

At that time, the company also used too much software regarding accounting, sales management, supplies, and inventory, in business activities, but these applications were not linked with each other and lacked synchronisation in data access. This caused the company’s employees to be “lost” in “a forest of software”, leading to many errors.

However, with great determination, the company recruited qualified technical staff to assist other employees in gradually adapting to new tools and support software.

So far, the company’s digital transformation has reached more than 85% and only one software is used to integrate all management activities. All information data is synchronised while order processing becomes more rapid and accurate, thereby helping the company leaders to make more timely and correct decisions, in production and business.

It cannot be denied that digital transformation in businesses has brought about many benefits, such as improvements to transparency and efficiency in corporate governance, costs saving and the working capacity of employees, as well as improvements to competitiveness and customer experience, with revenue increases.

However, most Vietnamese enterprises, especially small and medium enterprises, are still afraid of digital transformation, mainly due to financial problems and the technological knowledge of the business heads, while others’ digital transformation is not substantial and still confuses data digitisation with digital transformation.

According to a recent survey by the Vietnam Confederation of Trade and Industry (VCCI), 23.8% of surveyed businesses know about digital transformation but lack the financial and human resources to implement while 90% of surveyed businesses are showing that their digital transformation has yet to be successful.

A survey by the Vietnam Software and Information Technology Services Association (Vinasa) also shows that up to 92% of surveyed businesses do not know how to digitally transform, 72% do not know how to start the digital transformation and 69% do not know which partner to choose to deploy digital transformation. Most of these businesses are small and medium-sized, so the greatest difficulty for them is capital and they only consider digital transformation as the “playground” of the big ones.

According to the annual report on enterprise digital transformation 2022, announced by the Enterprise Development Agency (Ministry of Planning and Investment), digital transformation in enterprises has achieved remarkable results over the past time. Enterprises’ awareness of digital transformation has been raised and many businesses have been interested in applying digital transformation in production and business activities.

The level of businesses’ readiness for digital transformation is relatively good, with a score of 3/5. Besides these positive results, digital transformation is still a huge challenge for the Vietnamese business community, especially small and medium enterprises.

The survey results of 1,000 businesses across the country, in many fields and industries, also show that nearly 50% of businesses have applied technology and digital solutions, but they are temporarily suspending and not using them anymore, because these solutions have not been appropriate, or no longer suitable in the current context of businesses.

More than 35% of enterprises have digitised data and working processes, but mainly converting data, documents and papers from hard copies into soft copies, to store on the system. Only 2.2% of enterprises have mastered the technology, 6.2% have completed digital transformation goals and only 7.6% have gradually built plans for digital transformation. In addition, many businesses do not know where to begin the digital transformation and how to achieve the expected results.

Removing difficulties and barriers

VCCI Vice Chairman Bui Trung Nghia said, that digital transformation is a mandatory requirement and an inevitable and objective trend for the business community to stand firm and develop, especially after several years of being affected by the COVID-19 pandemic.

However, besides the implementation of digital transformation, there must be a common standard for related parties to complete and establish an overall view, approach or method.

The systematisation of digital transformation programmes requires systematic coordination at all levels, from central to local levels and from public to private sectors. Vietnam already has a good environment including Party and State guidelines and policies and action programmes of ministries and sectors, to support digital transformation.

Therefore, businesses must boldly apply technology to increase labour productivity, improve governance, and have a strategic vision, with specific steps to complete digital transformation goals.

According to experts, digital transformation is a long and difficult process and there are many businesses which are still lagging. Therefore, in addition to the readiness of businesses, it requires more support from the State and relevant agencies, to promote digital transformation solutions, in-depth training, and roadmap consulting, on the implementation of digital transformation for businesses.

With all the unremitting efforts from the business community and the timely support from the State, Vietnam is expected to reach the goal, that the digital economy will account for 20% of GDP by 2025 and 30% of GDP by 2030. At the same time, Vietnam aims to help businesses, especially small and medium-sized enterprises, seek a more flexible and efficient business model, to both reduce costs and optimise resources, overcome difficulties and grow in such a volatile market.