Ministry points out challenges in applying digital technology

Workers using equipment inside a plant of ITM Semiconductor Việt Nam Co. in the VSIP Industrial Park in Bắc Ninh. VNA/VNS Photo Thái Hùng

The COVID-19 pandemic has boosted enterprises to change models, shifting business activities to digital platforms to find more markets, cut costs and improve operational efficiency.

Digital transformation has taken place in recent years as a natural need to meet changes in consumer behaviour and management demand.

Many businesses have applied software solutions in sales management, online marketing, distribution channel management, business administration, and creating new products and services.

However enterprises still struggle during the process for many reasons, even if they are well prepared.

A recent survey of 1,300 enterprises conducted by the Enterprises Development Agency showed that the biggest challenge was the large investment capital needed for carrying out the process.

Accordingly, up to 60.1 per cent of respondents said that the biggest barrier they faced when applying digital technology was application costs. This is partly due to the impact of the COVID-19 pandemic, causing falling revenues and lack of capital, which affect funds for investment, implementation and solutions for digital transformation.

Another big challenge was difficulties in changing business habits and practices, affecting 52.3 per cent of participants.

The transformation leads to changes in habits and ways of working, but not all employees are willing to adapt to the new norms. Some businesses said that they had applied software, but employees do not use it, or only partially used it, making enterprises fail to achieve digital transformation goals.

The report also pointed out that the lack of internal human resources to apply digital technology was another difficulty, affecting 52.3 per cent of enterprises.

In the past year, awareness of businesses on digital transformation has improved a lot, as many businesses have the intention and need for it.

However, “when businesses start carrying out the transformation plan, they lack staff with experience, knowledge and skills to implement digital transformation projects for their businesses,” the report said.

The fourth biggest challenge for businesses in the process of transforming is a lack of digital infrastructure, while short of information on digital technology and difficulty in integrating digital technology solutions are other obstacles.

On the other hand, not many enterprises were concerned over securities issues like personal and business data leakage.

The difficulties are somewhat different between micro-enterprises, small-sized enterprises, medium-sized enterprises, and large-scale enterprises, the report noted.

At the moment, Việt Nam has about 870,000 enterprises in operation, with more than 97 per cent of enterprises being small- and medium-sized.

In general, the biggest challenge of micro- and small-sized enterprises with limited financial potential is capital for investment and technology application.

Meanwhile medium- and large-sized enterprises that have better financial conditions are struggling in changing business habits and practices.

This is partly because medium- and large- enterprises have more complex apparatus and procedures than micro- and small-sized enterprises, so it is more difficult to adapt to changes.

The report also showed that 39.5 per cent of the enterprises approach digital transformation knowledge to apply and improve their production and management activities, while more than 22 per cent said that they just wanted to study and research the process. — VNS