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Vietnam’s race for digital transformation

Until recent digital advancements, business functioning has been difficult, said the Sales Director of a large retail organisation in Vietnam. With two hundred agents and tens of thousands of retail outlets across 63 provinces and cities in Vietnam. To manage this scale of business, the company opted for software that helps both manage and support activities.

Similarly, a biotechnology company shared that after two years of applying management technology, the company has had a significant change. Their marketing staff realised that the tech-enabled system has helped them better control their daily work and boost sales. The customer conversion rate has increased by 20%, while the problem resolution decreasing to between 1-2 hours only. The number of points of sale has been doubling every day.

Thanks to digital transformation, many businesses have overcome difficulties caused by Covid-19. This has benefited those who need the technology as well as those who provide solutions.

A new entrant in the market industry generated US$4 million in revenue in 2020 by taking advantage of the epidemic to provide digital transformation solutions to major partners in Japan.

Another major player successfully developed a distribution management solution, fully meeting the needs of monitoring, automation and sales activities. Their solution digitises the entire business process in the distribution system, helping businesses have a more intuitive and accurate view of the market, customers and their competitors.

Chairman of the Vietnam Software and Information Technology Services Association (VINASA) Truong Gia Binh, said that digital transformation is a global trend, a vital issue for countries, organisations and enterprises. The world is witnessing a strong revolution in labour productivity and user experiences with many new business models that have been formed.

No doubt, the digital transformation trend is thriving but is not easy to realise because understanding the digital economy is a big challenge. Many domestic companies have heard about digital transformation and do not know how to implement this process.

A survey by the Ministry of Industry and Trade on the readiness to apply 4.0 technology in production and business activities in 2018 showed that 61% of enterprises “stood out” in the trend, 21% had initial preparations and 16 out of 17 fields under surveys had a low level of readiness in the digital transformation process.

According to a survey of 400 Vietnamese enterprises in 2020 by the Vietnam Chamber of Commerce and Industry (VCCI) and an international trade organisation, the four main barriers in digital transformation include Lack of information about digital technology (30.4%); lack of internal manpower to apply digital technology (32.3%), fear of leaking personal and corporate data (33.9%); lack of digital technology infrastructure (38.9%), and high cost of digital technology application (55.6%).

Many businesses still think that they do not need digital transformation and all issues can be handled on paper or spreadsheets. However, they need to consider the future development direction and future scale. Without determining digital transformation early, they will be in trouble later said a digital solutions provider.

According to the White Book on Vietnamese Businesses 2020, small and medium-sized enterprises account for 98% of the total number of corporates in the country. They have many advantages in digital transformation thanks to their flexibility and fast change. They need to understand how large enterprises operate, their business models and transformation processes, and apply them flexibly and creatively.

Digital transformation can be a smooth process as there is a lot of good technology, good infrastructure, good human resources and expertise available. Of course, these Vietnamese businesses will face teething issues when first starting, but they experience long-term gains and this will result in stronger motivation. Therefore, these businesses need the support of tech companies that specialize in digital transformation.

With the theme “Accompanying businesses in the digital era”, Vietnam Expo expects to bring resonance to the National Digital Transformation Program, creating a forum to connect the business community and enable their approach to digital transformation solutions to increase competitiveness in production and business.

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