Digital transformation helps enterprises adapt to new normal

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After the second year of the COVID-19 pandemic, despite lockdown orders, social distancing, and direct contact restriction, there was not a complete collapse of socio-economic life.

Due to COVID-19, many enterprises have shifted their activities online. Photo diendandoanhnghiep.vn

This was largely thanks to contactless and online services, fuelling digital transformation.

While traditional businesses and services see the wave of digital transformation approaching, online businesses and services continue to enjoy great success.

The pandemic has made businesses face the challenge of labour shortage as well as sales decline. After the pandemic, small and medium-sized businesses need to increase their use of digital technology in order to survive and thrive.

Facing the difficulties caused by the pandemic, Pham Nghia Food in the Mekong Delta city of Can Tho City has made timely efforts to maintain production and business activities.

However, due to a loss of employees during the pandemic, the company has to adapt to the situation and apply machinery and technology to replace staff and increase productivity. At the same time, the company also invests in modern Japanese technology to create new products.

The company has also tried to exploit multi-channel sales, especially online sales, rather than maintaining traditional channels. For older customers, the company started contacting and taking care of them through online means.

La My Tien, sales department of Pham Nghia Food, said that digital transformation and online sales had been applied and reviewed by the company in the pre-pandemic period.

However, the pandemic made the company realise the importance of digital transformation as everything must go through online platforms such as Google, YouTube and Facebook to be able to reach more customers.

The company is currently optimising its Facebook network, through which it was able to get closer to customers, added Tien.

In addition, the company also organised livestreams on Facebook to quickly reach customers and attract orders.

“Although the pandemic may cool down later, online sales will not decrease compared to the time of the pandemic,” Tien said.

“The fourth outbreak of the COVID-19 pandemic severely affected all business areas of EDX Group,” said Nguyen Dinh Hung, the group’s chairman.

“However, EDX leaders realised that the pandemic would not end quickly, therefore, businesses need to have radical solutions and adapt to change. In order to avoid work interruption, EDX moved all of its activities online, from working, meeting and training, to taking advantage of online collaborators,” he said.

“Digital transformation and e-commerce were certainly not the only way for businesses to adapt to the pandemic, but it was a necessary and indispensable condition for all businesses if they want to exist in this era.

“If enterprises want to survive, they must have solutions to change synchronously on all fronts, such as strategic restructuring, branding, corporate governance and online human resources.”

Barriers and support

A report on digital transformation of enterprises in 2021 showed that 60.1 per cent of surveyed enterprises said that the key barrier they faced when applying digital technology was the high cost of investment and technology application.

Meanwhile, 52.3 per cent found difficulties in changing business habits.

The report on digital transformation was conducted within a framework of a programme on supporting enterprise digital transformation for 2021 – 2025, which is jointly implemented by the Ministry of Planning and Investment and the USAID Linkages for Small and Medium Enterprises (LinkSME) project.

It was built based on a survey of 1,300 firms and in-depth interviews with experts.

For those just starting their transformation, they said they were looking for online marketing solutions (57 per cent), solutions for internal working (53.7 per cent), electronic transaction solutions (43 per cent), and network infrastructure and data (39.6 per cent).

Firms, who need digital transformation to accelerate growth, said their biggest demands include solutions for data analysis, intelligent reporting (63.5 per cent) and for customer relationship management and omni-channel sales (60.7 per cent).

Speaking at the event to announce the report, Le Manh Hung, head of the Enterprise Development Agency under the Ministry of Planning and Investment (MPI) , said given pandemic developments, the need for digital transformation was urgent for businesses to innovate their models; gradually shift their activities to digital platforms; seek more markets, cut costs and improve operational efficiency, and competitiveness to adapt.

Viet Nam has 870,000 enterprises, of which 97 per cent are small- and medium-sized. The MPI has also announced three aid packages which will be carried out this year to help promote digital transformation for Vietnamese enterprises.

The support is part of a programme assisting businesses in digital transformation for 2021- 2025.

This programme, approved by the MPI on January 7 last year, aims to help boost digital transformation in businesses through the application of digital technology, improving their efficiency, capacity, and competitiveness.

Of the three packages to be launched, the first is designed for small-sized firms, helping them embark on digital transformation. Each enterprise will be provided with VND20 -50 million, funded by the State budget per year.

The second will assist medium-sized businesses with a maximum of VND100 million per year. Meanwhile, the third targets exporters and will cover a maximum of 50 per cent of the costs to open and maintain their accounts on transnational e-commerce platforms.

Bui Thu Thuy, deputy director of the MPI’s Enterprise Development Agency, said businesses were still facing many barriers and difficulties in digital transformation such as high investment expenses, underdeveloped IT infrastructure, cybersecurity risks and limited human resources.

However, she noted that Vietnamese enterprises had numerous opportunities to boost digital transformation, which would help them grasp chances with changes in consumption behaviour, a shift in global supply chains, and the surge in online transactions due to the pandemic.

Source: VNS

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