What is digital transformation for businesses?
(Baonghean.vn) - Digital transformation brings about major changes, disrupting entire industries, while simultaneously creating disruptive innovation that helps some businesses achieve record growth and development. Many large, long-established corporations are struggling, while newer, smaller, and more agile businesses are thriving thanks to the adoption of new business models.
What is destructive creativity?
The cycle of innovation constantly generates new inventions and crushes the old in its path. The birth of the automobile industry led to the demise of a world once dominated by horse-drawn carriages. The advent of the personal computer signaled the end of bulky, cumbersome computers. The digital camera relegated film cameras, which had reigned supreme for much of the 20th century, to the museum of great inventions. The invention of new music technology, centered around the telephone and iPod, sent Sony's Walkman and CD technology into oblivion. These are destructive innovations.
Is ERP implementation already considered digital transformation?
ERP is the computerization of business processes aimed at making business operations smoother and more efficient.
Digital transformation focuses on holistic innovation, enhanced adaptability, and a greater emphasis on collecting, processing, and integrating data and knowledge useful for all levels of decision-making, based on data. Digital transformation can be envisioned as similar to the central nervous system, enabling businesses to become smarter, more innovative, and adapt quickly and effectively to change.
Digital transformation can be considered a higher level of development. Large businesses, especially in developed countries, have long implemented ERP systems, and now their digital transformation focuses more on data integration and business analytics. Most Vietnamese businesses do not yet have ERP systems, therefore the digital transformation process also includes automating processes using ERP.
It's important to note that digital transformation involves changing business models and processes, so ERP implementation shouldn't be done mechanically. Many ERP solutions that were very sophisticated and expensive in the past may not be suitable for the digital future. With the advantage of being a latecomer, Vietnamese businesses can move directly to smarter ERP solutions that integrate better with or are specifically designed to support digital transformation.
What direction should small and medium-sized enterprises (SMEs) take in their digital transformation? Digital transformation of SMEs.
Digital transformation brings new business opportunities. Every citizen can become an enterprise, selling products and services on digital platforms and e-commerce sites.
From August 2020 to June 30, 2021, the Ministry of Information and Communications implemented a pilot digital transformation program in Yen Hoa commune, Yen Mo district, Ninh Binh province. One of the key focuses was developing the rural digital economy and supporting farmers in bringing their local specialty, braised cartilaginous eel, to e-commerce platforms. Business performance has improved significantly.
Before digital transformation, the products were monotonous, lacking packaging and attractive designs. Since implementing digital transformation, within 10 months (from September 2020 to June 30, 2021), the number of products sold reached 4,204, a 4.5-fold increase; estimated income for cooperative workers increased from 1.5 million VND/person/month to 4.5 million VND/person/month, a three-fold increase compared to before. The products now feature attractive packaging, not only meeting consumer needs but also becoming popular gifts, offering a new experience for people nationwide. Similarly, small and medium-sized enterprises (SMEs) can leverage digital platforms to implement digital transformation and change their business models towards greater efficiency.
