Businesses struggle to find suitable digital transformation model

Digital transformation is inevitable for today’s businesses; however, it takes a long time for businesses to find and apply a suitable digital transformation model and quantify financial resources.

Businesses struggle to find suitable digital transformation model ảnh 1 Mr. Kiet Nguyen (center) of gannha.com company guides young people to research hardware to apply to the offline to online digital conversion ecosystem at the SHTP-IC incubator (Photo: SGGP)

Mr. Le Thanh Tam from My One Company - a company specializing in the garment industry, said that two years ago, the company hired a consulting company to build a digital transformation model for businesses, but the model failed because the consulting company has no expertise in the field of manufacturing in general and textiles in particular, so the software is built but cannot be applied.

As a result, the company has still had to use the traditional, labor-intensive production model, so it faces many difficulties in the context of fierce price competition.

In reality, many businesses are in the same situation as Mr. Le Thanh Tam's business; worse, even enterprises filed a lawsuit against their consulting companies. For instance, lawyer Pham Ngoc Hung, Vice Chairman of the Ho Chi Minh City Business Association, revealed that Pham Hung's law office is currently receiving lawsuits from clients related to digital transformation contracts. According to the lawyer, his client has paid nearly VND9 billion to hire a consulting unit to deploy digital transformation solutions.

However, after deploying and adjusting many times, the software still cannot be put into use. The consulting unit does not have goodwill to compensate, so the company initiates a lawsuit in accordance with the law.

Many business leaders said that they are confused by an advertisement from consulting agencies about digital transformation for production activities. Several are reputable digital transformation consulting units, but because enterprises do not have stable human resources, the implementation is delayed, leading to failure. In addition, many consulting units do not have specialized knowledge in specific production areas, so they cannot build appropriate digital management software for businesses.

Director of P.A.T Consulting Phi Anh Tuan said that it is undeniable that many digital transformation consulting units have been mushrooming; as a result, businesses need to prepare carefully and quantitatively specific requirements and set goals with consulting units. He affirmed without good preparation, businesses will definitely receive failure in digital transformation; thereby, he advised enterprise leaders would rather be slow at one beat at the moment but can go fast in the next ones.

Many experts say that businesses need to understand four things when embarking on the digital transformation of management or production activities. First, digital transformation must be based on existing financial resources and stable income to maintain operation after application; secondly, businesses should associate digital transformation activities with business models and target values with priority on digital transformation from the department that is generating the largest and most stable financial income.

In addition, businesses should understand that there is no fixed process but continuous adjustment and update for today's development trends. Enterprises must think long-term in digital transformation, which must be calculated in 3-5 years, from which to prepare resources for digital transformation. Most importantly, digital transformation must come from the determination of the head of the enterprise, Mr. Lam Nguyen Hai Long, General Director of Quang Trung Software Park Development Company, Chairman of Ho Chi Minh City Computer Association affirmed.

Mr. Dinh Hong Ky, Permanent Vice Chairman and Secretary of the Ho Chi Minh City Construction Association, said that if businesses speed up the digital transformation process but the digital transformation infrastructure for public services is slow, businesses will still be backward.

Ho Chi Minh City is applying 800 service portals for people to access the online form, but only 20 services connect to the Government Portal. For example, the payment service for land procedures, it takes 28 days in the southern largest city while it only takes 30-60 minutes in some localities.

Another factor that many businesses also share is that the capital support from the authorities, the banking system for this activity is not transparent. Enterprises still have not been able to access the digital transformation loan package; worse, they even can’t access the 2-percent interest rate support package, so they face many difficulties while when more than 90 percent of enterprises in the country are medium and small ones.