Why are Vietnamese firms "afraid" of digital transformation?
- 118
- Digital
- 22:55 26/09/2022
DNHN - In recent years, digital transformation has become a natural necessity for many firms, particularly digital transformation in business operations to match shifting customer consumption behaviour. However, most firms are having difficulty determining the best digital transformation strategy.
According to the Business Registration Department's study, the country would have around 870,000 firms in operation by the end of 2021; more than 26,000 cooperatives with a total of 6.8 million members, 2.5 million workers, and more than 5.1 million business households. Many firms are only getting started with digital transformation solutions for internal management and operations. Accounting software is used by more than 60% of firms, while electronic invoice software is used by over 200,000 enterprises.
However, tiny size, limited technical capability, and cheap labour costs... are all severe issues that businesses face. Vietnamese enterprises are focusing on digital transformation as a fundamental approach for reforming and shaping operations in the new era. However, most firms are having difficulty determining the best digital transformation strategy.
Limited firm capacity: Most manufacturing and business facilities lack experience in technological application and exploitation. As a result, making the transfer will take some time. Furthermore, even when conscious of the function and significance, successful digital transformation remains a significant issue. Enterprise restrictions originate from uncertainty about technology investment returns, a lack of internal capacity to employ technology, a lack of funding, and legal issues.
According to a World Bank poll, more than 75% of Vietnam's small and medium-sized firms and 63% of big enterprises are now doubtful about the return on technology investment and if it is appropriate for the Vietnamese economy. Less than 60% of SMEs reported a lack of knowledge about present technologies as well as technological abilities. These businesses also stated that their access to overseas capital remains constrained.
Market constraints and digital transformation solutions: Currently, Vietnam has not created institutions or organizations that operate as an impartial channel to objectively examine the benefits and drawbacks of public solutions, allowing enterprises to make informed decisions. At the same time, this is useful, transparent, and analytical information for manufacturing and business establishments in the digital transformation process to see aspects (availability, the effectiveness of digital business solutions, digital technology analysis, risks, investment funds...) to have self-improvement solutions.
Limited financial resources for digital transformation: Digital transformation initiatives may be expensive, and organizations, particularly small and medium-sized enterprises, have limited financial resources. According to a 2020 poll conducted by the Vietnam Confederation of Trade and Industry (VCCI), up to 55.6% of firms participating in the survey believe that the cost of technology implementation is the most significant constraint. The expense of altering the process, training staff to adapt to the new process, and investing in information technology systems, such as needing to deploy certain information technology systems, will increase investment and system running costs.
Furthermore, the State's policy and legal framework on e-government, transactions, and administrative operations on digital platforms are still being finalized. The public sector's support is still concentrated on research and development rather than technology upgrading and commercialization.
With today's inventive spirit of enterprises, thorough digitization is an unavoidable demand, especially with the Government's new digital transformation program. As a result, organizations must emotionally and financially prepare to lay a solid basis for the digital transformation process. Leaders and managers must develop their digital transformation knowledge to support and make the necessary investments for firms.
Ngoc Phi
Related news
- Vietnam’s steel imports are estimated to exceed US$4 billion by the end of the first quarter of 2024
- Acting President Vo Thi Anh Xuan meets a delegation of the Vietnam Young Entrepreneurs Association
- State-owned enterprises to play a leading role in the economy
- Ensuring power supply - a key factor for FDI enterprises to invest in Vietnam
- South Korea to approve projects supporting Vietnam’s agricultural development
- Thanh Hoa Business Association: Seminar and Business Networking in Trieu Son District
- Binh Thanh Business Association organised March’s “Business Start-up and Management” Coffee Talk
- Vietnamese businesses dominate market share in Japan
- Important seafood industry groups exported to Australia
- Prime Minister encourages Australian companies to make investments in fresh growth drivers in Vietnam
- Foreign E-commerce businesses pay over 2,000 billion VND in tax in the first two months of the year
- Hoa Binh Provincial People's Committee: Gathering in the spring of the Lunar New Year 2024 with enterprises, investors, and cooperatives
- Over 400 businesses to participate in Vietnam ETE & Enertec Expo 2024
- Long An’s Allure - a “Magnet” with Constantly Improving Infrastructure and a Transparent Investment Environment
- Unilever Vietnam and nearly Three Decades of Accompanying Vietnam’s Sustainable Development
- Chu Lai International Airport to become international air logistics service centre
- THACO to Recruit over 12,000 New Employees as It Expands into Agriculture
- Dong Thap Welcomes Delegations from Three Provinces of the Kingdom of Cambodia for a Visit and Tet Celebration
- What Obstacles Will the Vietnamese Textile Industry Face in 2024?
- ADB Ready to Support Vietnam in Accessing Loans and Promoting Sustainable Development
Đọc thêm Digital
BIDV Open API leads the Open Banking trend
Since its launch on November 29, 2023, almost 4 months ago, nearly 60 partners have experienced the BIDV Open API system (with over 17,000 tests in the sandbox environment) and registered to integrate with BIDV after the experience.
Cashless payments reign supreme in Vietnam
Vietnamese people are carrying less cash in their wallets as QR code payments explode alongside the growth of e-wallets. According to a Visa survey, 62% of respondents use QR code payments.
Shark Binh’s Venture Fund Seeks E-Commerce Startups
The move is an effort to boost the market amid what has been called a “startup winter” in 2023.
Hoa Binh: Digital transformation benefits people and enterprises effectively
Hoa Binh province has stepped up the application and development of IT in the operations of agencies and organisations, effectively serving the needs of people and businesses, and contributing to the promotion of socio-economic development.
Foreign E-commerce businesses pay over 2,000 billion VND in tax in the first two months of the year
In the first two months of this year, the total tax paid by foreign suppliers was 2,030 billion VND. This includes contributions from leading global technology companies such as Meta (Facebook), Microsoft, Google, Apple, TikTok, etc.
Lao Cai steps up the provision and use of online public services
According to the plan, in 2024, Lao Cai province will implement a series of solutions to promote the use of online public services.
Ao Dai Market Records Nearly VND42 Billion in Total Revenue from E-commerce Platforms
According to Metric data, the top 10 ao dai brands with the highest revenue accounted for 10.98% of the total revenue in the market, while the remaining brands accounted for 89.02%.
The Ministry of Industry and Trade Forecasts Revenue of Vietnam’s Top 5 E-commerce Platforms
The Ministry of Industry and Trade’s forecast indicates an optimistic 2024 as online consumption becomes a common habit. This will continue to drive revenue on online retail platforms, posing new challenges and opportunities for businesses operating.
Social Media is A Common Source of Travel Information For Vietnamese Travellers
Vietnamese tourists lead the region in using Facebook (95%) and TikTok (83%) as platforms for travel inspiration.
Can Tho is Accompanied and Developed by VNPT Can Tho Into a Modern and Civilised Metropolis
State-owned economic group VNPT, which specialises in information technology and telecommunications, has assisted and accompanied Can Tho City in the implementation of "Building Can Tho City to Develop into an Urban Area", with a focus on 2030.