At last week’s workshop on bottlenecks in digital transformation implementation in Hanoi, experts pointed out the typical shortcomings that cause some businesses to collapse.

Groups acknowledge power of digital age, Photo: Shutterstock

Explaining the reason why up to 90 per cent of digital transformation projects failed, Pham Anh Tuan, lecturer at FPT School of Business and Technology (FSB), said that in addition to mistakes, most projects set a high target, and the challenges come from value and scale.

“Of course, early on, every enterprise has to experience a pilot period, and then make some breakthroughs to accelerate digitalisation. However, between breakthrough and success, they may fall into a chasm,” Tuan said.

Some studies indicate that digital transformation can generate value and impact organisations if reaching a certain scale. Otherwise, they will remain at the level of pilot project and will not overcome the testing period, he added.

Elsewhere, at last week’s launch of the publication of Yellow Pages of Digital Transformation Providers, Nguyen Tan Minh, deputy CEO of business toolkit company GMO-Z.com RUNSYSTEM, said that the recent coronavirus pandemic and Industrial 4.0 have created numerous opportunities and boosted enterprises to digitalise and enhance performance and productivity.

“For successful digital transformation, businesses need a clear and effective strategy and roadmap to navigate. This should make sure that new technologies are deployed continuously and effectively, suitable for each stage of business development,” Minh said. “A comprehensive digital transformation roadmap should include preparation stages and stepping stones to gradually transition from ‘doing digital’ to ‘being digital’.”

Tuan from FSB pointed out five steps in the process of digital transformation, from creating platforms and automating business processes up to creating a long-lasting and sustainable culture of continuous digital reinvention.

“If a company stops during the first three steps, they are only ‘doing digital’. Only when carrying out levels 4-5 can a business truly ‘be’ digital,” he explained.

The perception and thinking of many businesses about digital transformation are incorrect, according to Nguyen Kim Hung, acting director of the Vietnam Institute of Digital Economy and Business Management. He said that many small- and medium-sized enterprises stop using technical solutions after a time due to finding them ineffective.

“Digital transformation is an inevitable need. The developments in the following years will be more positive than in previous years. However, small companies will struggle with digitalisation and this must be resolved,” said Hung. “Some stages are much more complicated. The application of digital technologies to management and operations can be cumbersome and complicated, increasing investment and operation costs. This is the biggest barrier for them in the process of digital transformation.”

Tran Tuan Anh, southern manager of Digital Transformation Consulting for Base.vn, agreed that digital transformation is a long journey and most Vietnamese businesses are still in the early stages.

“It is still a challenge for businesses to persevere in digital transformation, overcome digitalisation, and benefit from new technologies. The role and view of company leaders are significant because implementation needs detailed strategies, plans, and drastic directions to reach the intended goals,” said Anh.

Based on experience in consulting digital transformation for businesses, Minh from RUNSYSTEM stated that, in addition to digital transformation activities, the application of any new methods to corporate governance includes some risks related to the specifics of each business.

“Some businesses have not carefully studied the implementation plans, and initial software requirement evaluations are not carried out carefully enough. In addition, some new software solutions may not meet the business requirements, or they change too quickly. This can happen when the businesses are growing up or expanding,” Minh explained.

Also, there can be a lack of consensus in organisation, consistency, and resolute leadership. “Some departments of an enterprise may not yet accept or want to use another digital technology and software, leading to implementation issues,” Minh added.

The Yellow Pages on Digital Transformation Providers publication, launched by the Ministry of Planning and Investment, offers more than 50 digital transformation solutions. Four professional groups of solutions are highlighted: general solutions across industries; solutions in production; solutions in infrastructure and information management; and solutions for healthcare, oil and gas, transportation, and logistics.