The key challenges ahead for a digital economic boom

August 10, 2022 | 17:09
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Digital revenues in Vietnam are forecast to grow exponentially as the government continues to roll out new initiatives. Dwayne Ong, founder and CEO of Singaporean certification body CASUGOL, talked to VIR’s Bich Thuy about how Vietnam can address its primary challenges to ensure sustainable digital growth.

More Vietnamese businesses understand the importance of digital transformation. What are your observations on the current digital landscape?

The key challenges ahead for a digital economic boom
Dwayne Ong, founder and CEO of Singaporean certification body CASUGOL

It is heartening to see that more small- and medium-sized enterprises (SMEs) in Vietnam has started adopting digital solutions in their businesses and serve their customers. This covers digital payments, creating online presence, and using data to customise products/services to enhance customer experience. Recent research has also shown that the number of Vietnamese connected to the internet has also increased to nearly 85 per cent.

However, the majority of the digital transformation initiatives are largely congregated in major cities like Hanoi, Danang, and Ho Chi Minh City. With over 90 per cent of businesses in Vietnam made up of SMEs and micro-businesses, there are still a lot of opportunities to improve digital adoption among them. The main challenge that they face is the lack of digital literacy or lack of knowledge on core technologies that can impact their businesses. This results to firms kickstarting their digital transformation by purchasing lots of tools and solutions. Such an approach provides a quick fix to problems but is not sustainable in the long term.

The second challenge is the lack of willingness to continuously transform. Often, SMEs like to adopt a wait-and-see approach in digital adoption – for example, adopting a solution or tool only when a similar business has already deployed the technology. The lack of a long-term plan often leads to businesses losing momentum in their transformation, and eventually giving up.

The third challenge is of course the lack of digital talents. This is a global trend, and studies have shown that there is a shortage of digital talents who are skilled and competent in AI, data, and cybersecurity. This leads to hiring or training staff based on popular vendor-centric tools. The lack of talent and skills has caused them to embark on digital transformation dependent on the requirements/limitations of a tool or brand. This is extremely dangerous given the dynamic and fast-changing world that we are in today.

What are your recommendations for businesses which want to kickstart a sustainable digital transformation path?

The first step to a sustainable digital transformation is to stop rushing into solution or tool procurement because your competitor and other businesses are doing so. Take a step back and understand what your organisation truly wants to achieve in the next 3-5 years in terms of digital adoption.

Once an objective is set, it is important to use a gap analysis and be clear on what are the steps required to achieve the objective. It is necessary to start collecting relevant data and information, and put together a digital transformation framework to establish accountability and clarity in the organisation. Most importantly, it is also needed to build confidence within the organisation to support and nurture a digital culture.

Businesses will also need to prioritise the enhancement of digital literacy based on the core technologies rather than vendor-centric or branded tools, and this should be a continuous effort. Many of the successful companies we work with are still having staff attend our free workshops and seminars to update themselves based on the latest industry trends and best practices.

What can the Vietnamese government do to ensure the sustainability and growth of this digital economic boom?

The Vietnamese government is doing a tremendous job in investing in and promoting digital transformation and related initiatives. Many businesses, especially smaller ones, have benefited thanks to their continuous and consistent messaging. To ensure the sustainability of these initiatives, it is important to ensure that proactive effort is being taken to reach out to more businesses. Some activities like roadshows, seminars, workshops, and conferences will allow businesses to experiment and learn about the latest international trends, best practices, and things they can do to jumpstart a sustainable digital transformation.

Educational institutes are also continuously nurturing future digital leaders, building a pipeline of digital talent that can contribute to Vietnam’s workforce very quickly upon graduation.

Lastly, it is crucial to cultivate a healthy pipeline of students who are interested in pursuing a career in the areas of science, technology, engineering, and mathematics.

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By Bich Thuy

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