Perhaps no other crisis in modern history has had as great an impact on daily human existence as the current COVID-19 pandemic. As a silver lining, however, it has forced businesses throughout the world to accelerate their digital evolution to thrive in the post-pandemic environment.
A Deloitte Private global survey of private enterprises titled “Crisis as a catalyst: Accelerating Transformation” published in May reveals that executives in every region used the crisis as a catalyst to accelerate change in virtually all aspects of working and living. As many as 69 per cent of respondents accelerated their digital transformation during the crisis through greater technology investment and deployment.
Bui Minh Tuan, Deloitte Private leader at Deloitte Vietnam, said that the executives are most confident about their ability to boost productivity, which is also one of their top growth strategies for the coming year. Digital transformation is the second-highest growth priority for executives overall, but the number one priority for highly resilient respondents.
In Vietnam, the study shows that while businesses are aware of the importance of digital transformation, technological challenges and constrained budgets often stay executives’ hands to accelerate the process.
However, a clear digital strategy can go a long way toward improving business resiliency, a point that has been proven by the success of several early-adopter local companies in dealing with COVID-19.
Traphaco, for instance, had begun implementing a digital transformation strategy for its supply chain before the pandemic.
Dao Thuy Ha, deputy general director of Traphaco shared that the pharmaceutical has developed a smart factory to lead the Pharma 4.0 trend in Vietnam.
“The factory uses top-of-the-line technology to improve the accuracy in processing and manufacturing herbal medicines. This will help reduce the risks of cross-infection and improve productivity,” she said.
At the same time, Traphaco also manages planting and caring at its growing areas via a remote management software. She explained that the technology helps to ensure the quality and stable supply of input materials to prevent supply chain disruptions. The company also uses digital technology to communicate with customers, optimise costs, and increase sales.
“Traphaco’s digitalisation plan paid off during the pandemic as we achieved good growth while others were floundering. In 2020, Traphaco’s revenue and after-tax profit increased 12 and 27 per cent, respectively. In the first half of 2021, revenue grew 22 per cent and after-tax profit 38 per cent on-year,” she said ata webinar themed “Digital transformation for breakthrough: Technology solutions or Strategic mindset of enterprises?”
Meanwhile, Nestlé Vietnam has also underscored the importance of digital transformation in their growth during the pandemic. Nestlé has so far invested $730 million in Vietnam with significant expansion projects in the pipeline to expand its local manufacturing footprint.
Urs Kloeti, factory manager of Nestlé Bong Sen in Hung Yen province shared that, “Our vision is to become a leading sustainable Ggocal company focusing on innovation, digital transformation, and sustainable development. These key platforms have enabled the company to respond and continue to thrive despite the adverse impact of the COVID-19 pandemic.”
In terms of digital transformation, Nestlé approaches opportunities with the principle “Bottom-line value backward rather than technology forward”. It is necessary to prioritise data digitisation to understand the opportunities before investing into advanced tools. The most important thing in a digital transformation strategy is to equip and develop the necessary skills for employees to access and master the technology.
“Digital transformation has by all means created positive impacts on the entire supply chain, improved product quality, and consumer experience quality, supported sustainable farming and production, and generated a safer, more productive and more connecting working environment for employees,” he added.
The Nestlé Bong Sen factory, for example, is utilising robotics and automation to reduce human fault and enhance productivity. Meanwhile, VR technology has been applied in its distance working and training as part of efforts to build a digital workforce. As a result, digitalisation helps the factory to slash non-value added activities and paper work by 60 per cent.
Nguyen Trung Kien, director of Strategy at VNPT-IT cited a VCCI survey showing that over 80 per cent of business leaders think that digital transformation is becoming more urgent and important. Around 65 per cent plan to increase investment on digital transformation, and priority solutions for businesses are now work-from-home on a large scale, cybersecurity, e-commerce, and marketing, as well as process automation.
He pointed out three factors determining the success of digital transformation are human resources, institution, and technology. Habit changing is the biggest difficulty in digital transformation while awareness is the second biggest challenge. Businesses also face risks in the digital space such as cybersecurity, data governance, privacy, reduced quality, and reduced number of jobs, among others.