Digital Transformation in 2023: Opportunities and Challenges for Vietnamese Enterprises

The period from now to 2025 will be a period of accelerating digital transformation with actions implemented in each specific sector, field and locality. Although there will still be many difficulties and challenges, enterprises need to make good use of these opportunities and choose the right digital transformation path to improve their competitiveness for rapid and sustainable development.

Digital transformation for the benefit of people and businesses

Digital transformation is not only a trend but also a requirement for businesses. On June 3, 2020, the Prime Minister signed Decision 749/QD-TTg approving "The National Digital Transformation Program to 2025, with a vision to 2030" with the goal of developing a digital government, digital economy, digital society, as well as forming Vietnamese digital technology enterprises with global capabilities.

As of early May 2022, in Vietnam, all 63 provinces/cities established a Digital Transformation Steering Committee, 55 out of 63 localities issued resolutions on digital transformation and 59 localities issued digital transformation programs/projects or plans for a period of five years. The Government issued Decision 505/QD-TTg, designating October 10 as the National Digital Transformation Day, showing the importance of this issue to promote digital transformation and to benefit people and enterprises.

Mr. Nguyen Phu Tien, Deputy Director of the National Digital Transformation Department at the Ministry of Information and Communications, said: Up to now, the national digital transformation program has achieved important results on all three pillars including digital government, digital economy and digital society.

Accordingly, information technology infrastructure and digital platforms continue to be developed from central to local levels to better meet the needs of digital transformation. The national population database is promoted to deploy, connect and share data to serve the provision of online public services and utilities for the people.

In addition, digital transformation has been very vibrant among enterprises with aggressive applications of digital transformation in their operation to be able to maintain maximum production and business activities. The digital economy model has been prioritized. In particular, Vietnamese digital tech enterprises have affirmed their pioneering role in research, development and innovation, mastering technology, making important contributions to the development of the digital economy. Vietnam already has many big tech enterprises such as Viettel, VNPT, FPT, CMC BKAV, and MISA. In addition, many businesses are also continuing to research and develop tech products and platforms to serve the national digital transformation.

Mr. Tien added that digital transformation was on right track, drastically bringing technology into all aspects of socio-economic life to help promote national digital transformation, increase the proportion of the digital economy in GDP. According to the National Strategy on Development of the Digital Economy and Digital Society issued by the Prime Minister, the digital economy target will account for 20% of GDP by 2025 and 30% of GDP by 2030.

However, besides the achieved results, there are still many businesses facing difficulties in choosing the right digital transformation path. Many production and business establishments have no experience in technology application and exploitation. Vietnam has not yet established agencies and organizations that act as an independent channel to objectively evaluate the advantages and disadvantages of technology solutions, thereby helping businesses have enough information to make suitable choices as well as find comprehensive solutions.

In addition, limited financial resources for digital transformation are also difficulties for businesses. According to a survey by the Vietnam Chamber of Commerce and Industry (VCCI) in 2020, up to 55.6% of enterprises participating in the survey believed that the cost of technology application had been the biggest limitation.

In particular, the Government's support is limited for digital businesses or businesses that are looking to invest in digital tools. Support from the public sector is still focusing on research and development activities instead of technology upgrading and technology commercialization.

A comprehensive ecosystem needed

According to experts, 2023 is forecast to be a year of difficulties, challenges, inflation pressure, supply chain and consumer confidence decline, so the trend of digital transformation will strengthen. In particular, the application of technology to create a new business model will be associated with the concept of a digital ecosystem. An ecosystem of internal solutions, applications and systems, partners, and related technologies will benefit businesses in the digital transformation journey. Understanding and properly evaluating this potential have been the driving force for many businesses toward building a stronger and more sustainable ecosystem.

In addition, the trend of digital transformation will also be shifted from technological competition to competition in ecosystem services, the fourth industrial revolution. It is expanding digital infrastructure, using automation models for production, and applying new technologies to make business more efficient.

Businesses also tend to require high data security to ensure that all data is stored only within the company's internal network.

Embracing these trends will be an opportunity for businesses to take shortcuts, and take the lead in implementing comprehensive and highly effective digital transformation. Currently, there are many technology solutions on the market, but not all technology solutions are suitable for all. Businesses need to consult and learn to make the best choice for their size and field.

Mr. Truong Gia Binh, Chairman of the Founding Council of VINASA and Chairman of FPT Corporation, said: Digital tech businesses were making efforts to develop high-quality digital transformation platforms and solutions, invest in research and accelerate new technology applications such as AI and Blockchain and were joining forces to build a digital ecosystem and to help digital transformation for agencies, organizations and enterprises.

According to Mr. Le Nguyen Truong Giang, Director of the Digital Transformation Strategy Institute, currently, Vietnamese businesses talk a lot about digital transformation, but how each business with a different size and capacity can implement it is another issue that should be carefully considered and discussed.

In the digital economy era, it is not important whether the scale is large or small, but the critical thing is "to go fast or to go slow". Enterprises need to look at themselves, use their resources to reshape themselves, choose an approach in terms of finance, human resource management, marketing, from a hierarchical model to a platform model, and carefully think about how to optimize their resources and tools.

By Thu Ha, Vietnam Business Forum