Improving digital infrastructure can be first key step to business transformation

August 03, 2023 | 16:00
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In the face of prevailing economic challenges, digital transformation emerges as a critical driver for businesses. Alexander Evchenko, CEO of 1C Vietnam, talked to VIR’s Linh Le about the common challenges encountered by Vietnamese businesses during their digital transformation journey and the effective strategies to surmount them.

What is your evaluation of the progress of digital transformation among small- and medium-sized enterprises (SMEs) in Vietnam relative to other countries in the region?

Alexander Evchenko, CEO of 1C Vietnam
Alexander Evchenko, CEO of 1C Vietnam

Vietnam has been making significant strides in its digital transformation efforts. The government and various stakeholders have been actively promoting digitalisation to enhance the competitiveness and efficiency of SMEs. Initiatives such as providing support for technology adoption, improving digital infrastructure, and fostering a conducive business environment for digital startups is already underway.

Analysis of digital transformation application trends to overcome difficulties shows that the recent pandemic helped businesses realise and promote digital transformation through the application of digital technology. SMEs have applied digital technology to issues such as purchasing, sales, internal management, logistics, production, and marketing. However, they still face many challenges in this long process.

What are the primary challenges that Vietnamese businesses encounter in digital transformation?

One key issue in my experience is the tendency for CEOs in Vietnam to delegate the digital responsibility solely to their IT departments. This approach can hinder progress, as active leadership and participation from top management are crucial for an effective execution. Consequently, it is imperative that CEOs themselves take a proactive role in driving digital transformation efforts.

Another common challenge relates to the integration of digital solutions. Some businesses struggle to achieve seamless integration between various digital tools and platforms. This challenge is particularly prominent for companies with outdated internal management systems or those adopting technology that is still in its early stages. In such cases, achieving comprehensive and efficient integration becomes complex, posing potential hurdles.

A third critical consideration is the need for simultaneous digitalisation of internal business practices. Before adopting technology to automate processes, it is essential for companies to ensure that their internal workflows and practices are optimised. Neglecting this aspect can lead to suboptimal results, as automating inefficient processes merely perpetuates inefficiencies, causing a chain reaction of issues.

One of the factors which impede the motivation of SMEs to initiate digital transformation endeavours is high cost. What is your take on this?

Optimising operations is crucial before implementing automation or digital transformation, as automating chaos can lead to chaos. Digital transformation is optimising business operations and technology side by side, and aligning them with global trends.

For efficient operations and customer understanding, SMEs can first experiment with common technologies or small-scaled specialised tools to gain deeper evaluations and customer insights, before applying more complex technologies on a larger scale. This way will help businesses digitise processes more efficiently and cost-effectively.

What are the key priorities for SMEs to ensure a successful digital transformation process?

Digital transformation is a significant undertaking, particularly for SMEs due to the associated complexity and costs. Prior to embarking on the journey, companies should focus on optimising their existing operations. Attempting to automate inefficient processes will only amplify these inefficiencies. Streamlining and optimising internal workflows should precede any automation initiatives.

Digital transformation is a holistic endeavour that encompasses both business optimisation and the strategic integration of technology. SMEs can benefit from an incremental approach by initially experimenting with popular technologies or specialised tools on a smaller scale, which allows them to gain valuable insights and customer feedback before expanding to more complex technologies on a larger scale.

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By Linh Le

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