Embracing digital transformation and restructuring for adaptable growth

After grappling with the repercussions of the last three years, the global economy is poised to face formidable hurdles in 2023, including surging inflation, increased interest rates, higher capital costs, declining consumer demand, and a resulting decline in domestic sales and export revenues for Vietnamese businesses.

The latest data from the General Statistics Office indicates that in June, 60,200 enterprises temporarily suspended their operations (up 18.2 per cent from the previous year), 31,000 enterprises halted activities awaiting dissolution procedures (up 28.9 per cent), and 8,800 enterprises completed dissolution procedures (up 2.8 per cent).

Consequently, a total of 100,000 businesses closed in the first half of 2023, with an average of 16,700 businesses shutting down each month. These figures underscore the financial strain and restructuring challenges faced by domestic enterprises, resulting in cost-cutting measures and personnel changes.

Digital transformation assumes a pivotal role in enabling businesses to effectively utilise resources, enhance their adaptability, and pursue sustainable development

The seminar Digital Office Solutions - Restructuring Strategies and Digital Effectiveness that was held on July 21 in Hanoi convened 250 attendees – including leaders and C-level managers from major corporations – to discuss the issue of restructuring departments and personnel to address the economic fluctuations while mitigating potential risks during their business transformation.

Speaking at the event, Alexander Evchenko, CEO of 1C Vietnam said, “Over the past eight years, we have witnessed the immense potential of the Vietnamese market. We understand that digital transformation is the bridge between today's business and tomorrow's success.”

"As digital investments accelerate, we advocate for a strategic approach, where digital possibilities shape strategy and tech decisions align with business goals," he added.

Alexander Evchenko, CEO of 1C Vietnam, speaking at the event

Evchenko highlighted that it is common in Vietnam for CEOs to delegate digital transformation to the IT department, which impedes progress. However, the onus lies on CEOs themselves to take an active leadership role and participate in this crucial process.

"Another prevalent challenge is the inadequate integration of digital solutions within businesses. This issue arises particularly when dealing with outdated internal management systems or nascent technologies, resulting in complex and inefficient integration. A comprehensive and cohesive integration strategy is indispensable for a successful digital transformation," Evchenko noted – adding that businesses must recognise that digitalisation and transformation must progress hand in hand.

Pham Thanh Dai Linh, consulting director at FPT Digital, cited data indicating that Vietnam boasts nearly 400,000 IT engineers and more than 50,000 IT graduates annually.

However, IT personnel constitute only 1 per cent of the total workforce, which is relatively low compared to tech-oriented countries like the United States, South Korea, and India. Efforts are underway to raise this proportion to 2 per cent and concurrently enhance technical proficiency.

"The digital economy bestows a sustainable dynamism on Vietnam's economic landscape, making a significant contribution to propelling the country from a low-middle-income status by 2025 to a high-middle-income status by 2030 – and ultimately attaining high-income status by 2045," Linh emphasised.

Experts agreed that restructuring and leveraging technology can help create an agile and growth-oriented ecosystem

The experts agreed that the coming 12 months are anticipated to be arduous for enterprises. Embracing restructuring and fostering adaptive flexibility constitute pivotal measures to enhance efficiency in management practices, economise, and pool resources to bolster competitiveness.

By restructuring businesses and leveraging technology in management practices, leaders can forge a leaner, optimised management system that offers ample opportunities for adaptability, survival, and sustainable growth.

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