Digital Transformation in VN: the SME and SOE experience

Digital Transformation in Vietnam: the SME and SOE Experience

About

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This working paper is based on findings from surveys, interviews and focus groups conducted between 2019-20 with middle- to senior-level managers at state-owned enterprises (SOEs) and small- to medium-sized enterprises (SMEs) operating in Vietnam (n=180). 

Main findings

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The digital transformation of SOEs appeared to be more focused on internal processes to optimise efficiency, while SMEs were more externally focused on engaging customers to maximise cashflow. 

SOEs and SMEs from the secondary sector (e.g. manufacturing, construction) did not appear to be as ready for digital transformation as the primary and tertiary sectors. 

Secondary sector responses indicated:

1 An inconsistent and/or poorly oriented digital transformation strategy within the enterprise. 
2 The lowest level of interaction around digital transformation within the enterprise. 
3 A somewhat negative perception of data-oriented technology investment by the enterprise. 
4 A strongly negative perception of the digital competencies of staff across the enterprise.

Reactions from industry experts

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Dr. Nguyen Huu Le, Chairman, TMA Solutions

Dr Le believes that Vietnam's software industry is well-positioned to support enterprises on their digital transformation journey:  
 
"The Vietnamese economy is moving higher up the value chain and technology can help the country progress even further by increasing productivity and quality, creating more value and becoming more competitive in both domestic and global markets. After more than 20 years of fast growth, Vietnamese software providers are more ready than ever to provide end-to-end solutions for companies in Vietnam and around the world."

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Mr. Rick Yvanovich, Founder & CEO, TRG International

Mr Yvanovich thinks that business leaders should ensure that all levels of the enterprise are involved in digital transformation strategy:  

"I believe what people most misunderstand about digital transformation is that it is purely technology-centric. For example, launching a new mobile app, connecting your website to Apple Pay, moving data to the cloud are all typical digital initiatives. But digital transformation is a lot more than just a collection of disparate IT projects. Instead, these projects should be directed by an organisation-wide effort, with buy-in from all business functions." 

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Ms. Doan Kieu My, Initiator & Founder, YellowBlocks 

Ms Kieu My urges business leaders to shift from antiquated management towards dynamic structures:  

"...I am astonished that the findings of this qualitative research indicate that many companies in Vietnam have yet to understand the nature and purpose of digital transformation. Digital transformation is not just about disruption or technology; it embraces the cultural, organizational and operational business potentials unleashed by a customercentric focus."

  

This working paper was co-authored by the RMIT Centre of Digital Excellence (CODE) and the RMIT School of Business & Management.

For more information or enquiries, contact code@rmit.edu.vn.